Indus 2018 PDF

Annual Report
2018
Indus Dyeing
& Manufacturing Company Limited
INDUS DYEING & MANUFACTURING COMPANY LIMITED
CONTENTS
Company Information 02
Vision and mission statement 04
Chairman's review 05
Directors' review 06
Key operating and financial results 12
Pattern of holding of shares 13
Statement of compliance with the Code of Corporate Governance 17
Notice of annual general meeting 18
Review report to the members on statement of compliance
with best practices of Code of Corporate Governance 22
Auditors' report 23
Statement of Financial Position 27
Statement of Profit & loss 28
Statement of other comprehensive income 29
Statement of changes in equity 30
Cash flow statement 31
Notes to the financial statement 32
Directors' review (Urdu) 149
Chairman's review (Urdu) 150
Form of proxy 151
Dividend mandate form 153
Annual Report 2018 01

Company Profile
Board of Directors
1 Mr. Mohammad Ahmed Chairman
2 Mr. Shahzad Ahmed Chief Executive
3 Mr. Riaz Ahmed
4 Mr. Naveed Ahmed
5 Mr. Kashif Riaz
6 Mr. Imran Ahmed
7 Mr. Irfan Ahmed
8 Mr. Shafqat Masood
9 Mr. Shahwaiz Ahmed
10 Sheikh Nishat Ahmed
11 Mr. Farooq Hassan Nominee N.I.T.
Audit committee
1 Sheikh Nishat Ahmed Chairman
2 Mr. Kashif Riaz Member
3 Mr. Irfan Ahmed Member
Human resource and remuneration committee

1 Sheikh Nishat Ahmed Chairman
2 Mr. Shahwaiz Ahmed Member
3 Mr. Irfan Ahmed Member
Company secretary
Mr. Ahmed Faheem Niazi
Group Chief financial officer

Mr. Zahid Mahmood
Chief financial officer

Mr. Arif Abdul Majeed
Chief Internal auditor

Mr. Yaseen Hamidia
Legal Advisor
Mr. M. Yousuf Naseem ( Advocates & Solicitors )
02 Annual Report 2018

Registered office
Office # 508, Tel. 111 - 404 - 404
5th floor, Beaumont Plaza, Fax. 009221 - 35693594
Civil Lines Quarters, Karachi.
Symbol of the company IDYM
Website
www.indus-group.com
Auditors
M/s Deloitte Yousuf Adil
Chartered Accountants
Registrar & Share Transfer Office

JWAFFS Registrar ( Pvt ) Ltd.
407-408, Al - Ameera Centre, Tel. 35662023 - 24
Shahrah-e-Iraq, Saddar, Karachi. Fax. 35221192
Factory location
1 P 1 S.I.T.E. Tel. 0223 - 880219 & 252
Hyderabad, Sindh.
2 Plot # 3 & 7, Sector - 25, Tel. 021- 35061577 - 9

Korangi Industrial Area, Karachi.
3 Muzaffergarh, Bagga Sher, Tel. 0662 - 490202 - 205

District Multan.
4 Indus Lyallpur Limited. Tel. 041 - 4689235 - 6

38th Kilometre, Shaikhupura Road,
District Faisalabad.
5 Indus Home Limited. Tel. 042 - 35385021 - 7

2.5 Kilometre, 111 - 404 - 405
Off Manga Raiwind Road,
Manga Mandi, Lahore.

INDUS DYEING & MFG. CO. LIMITED
VISION
To be leading and diversified company, offering a wide range of

quality products and services.
MISSION
We aim to provide superior products, Financial security, performance

and service quality that fully meet the needs of our customers and to
maintain the financial strength of the company.

CHAIRMAN’S REVIEW
FOR THE YEAR ENDED JUNE 30, 2018
It is my privilege and pleasure in presenting to the members of Indus Dyeing and Manufacturing Company
Limited, review on the performance of the Company for the financial year ended June 30, 2018. I would take
this opportunity to invite you for the 61st Annual General Meeting of the company.
Review of the Boards Performance
The Board, being responsible for the management of the company’s affair and determining the company’s
level of risk tolerance, formulates polices and strategies. The board is governed by relevant laws &
regulations and its obligation, rights, responsibilities and duties are as specified and prescribed therein.
Board members do have the suitable knowledge, variety of expertise and experience that is required to
successfully govern the business. Individual board members are committed to perform for the betterment of
the company.
During the year 2017-2018 the board met 05 times. The board act in consonance with pertinent laws and best
practices, complying with all regulatory requirements.
The board strictly monitored the performance of its sub-committees. Comprehensive and effective meetings
of the board resulted in conducive decisions for the Company. Whereas, integration of all policies assimilating
to company’s mission and vision was ensured by the board. In addition to it, the board also ensures
compliance with all applicable rules and best practices of the company.
To keep updated the board members and enabling them to remain harmonize for continuous progression of
the company, the board assessed its sub-committees along with the evaluation of its own performance,
facilitating the board to play an effective and efficient role in accomplishing set targets of the company.
BUSINESS OVERVIEW
In terms of profitability, performance of the company has improved, profit from operations has increased by
almost 72.09 % during the year.
Considering the tough competition and economic slowdown, efforts of the management are yielding these
better results and are admirable. Company would continue to improve efficiencies in order to emerge as
leader in this market
On Behalf of the board, I would like to thank of all stakeholders for their continued confidence in the company
and for their support, dedication and hard work
October 05, 2018 Chairman
Mian Mohammad Ahmed

Directors’ Review
For The Year Ended June 30, 2018
The Directors of Indus Dyeing and Manufacturing Company Limited are pleased to present the Annual
Report together with the audited Financial Statements for the year ended June 30th, 2018 before the Sixty
First Annual General Meeting of the Company
The consolidated financial highlights of the Company are as under:
For the Year For the Year

Ended Ended
June 30, 2018 June 30, 2017
(Rupees in 000)
Sales 30,630,286 27,573,192
Gross profit 3,013,451 2,641,910
Other operating income 654,869 124,080
Finance cost (372,135) (254,998)
Provision for taxation (226,823 ) (317,382)
Profit for the year after taxation 1,781,697 1,035,345
Un-appropriated profit brought forward 4,786,250 5,913,069
Un-appropriated profit carried forward 6,328,375 4,786,250
Earnings per share – basic and diluted (net) 98.58 Rs. 57.28
DIVIDEND
The Directors proposed160% final cash dividend i.e. Rs: 16/= per share for the year 30th June 2018.
BUSINESS OVERVIEW
Your Group earned post-tax profit of Rs 1,782 million as compared to Rs 1,035 million for the corresponding
last year. During the year under review the sales increased to Rs 30,630 million from Rs 27,573 million mainly
due to increase in yarn prices. The profit before tax for the year increased by 656 million as compared to last
year.
An earnings per share of the Company on a standalone basis isRs. 76.28 per share as compared to Rs.
37.95 per share last year. The consolidated earnings per share isRs. 98.58 per share as compared to Rs.
57.28 per share last year.
BUSINESS REVIEW
The year under review was quite challenging for the spinning industry as the cotton prices jumped
substantially due to devaluation.
Textile constitutes the largest sector in Pakistan’s Export and the country is faced with a serious current
account deficit situation for which the GOP provided rebate incentives to increase exports, which has been

achieved to some extent. But from July 2018, the rebate incentive was not extended for spinning industry
which will definitely impact our company negatively. Availability of gas and RLNG is a major concern for textile
industry which is up to some extend is being provided to the industry but their utility prices are uncompetitive
as compared to other regional countries. Despite these challenges, the intelligent business moves of the
management in the areas of cotton procurement, sales and financial management has made the operating
results profitable to a greater extent.
Indus Home Limited (Subsidiary) performed well in term of production which is higher by 3% from last year.
However, profit of current year is down by PKR 80 million from previous year. Profit is subdued due to high
cost of raw material, increase in wage rate, expensive fuel namely RLNG and coal, high cost of packing due
to inadmissibility of input tax and increased sizing cost. This year the company is able to sustain last year
production and sale quantum. Capex for the year is PKR 376.73 million which includes 353.58 spent on
Machinery. This year, machinery addition includes 12 Picanol Looms, Pentek tumbling line and Texpa
hemmer and cutting machines, weft straightner, Stitching and lock machines to modernize plant by replacing
old machinery and enhance stitching capacity to handle customers orders as per their quality and compliance
standards.
With reference to our Company’s venture in the renewable energy sector through our subsidiary “Indus Wind
Energy Limited”, considerable progress has been achieved. To start with from where we left off in our last
Annual Report, our Company was successful in concluding agreements with Machinery Suppliers, EPC
Contractors and Financial Institutions. Moreover, our Company has applied for Cost Plus Tariff with NEPRA
which is in final stages of award. With the induction of new Government at Center, the prospects for new
renewable projects have become very promising and as such hope to attain financial close within the ongoing
financial year. Furthermore, with rising fossil fuel energy prices at present, the outlook for renewable energy
has become very essential in our national as well as in global sphere. Hence, at the outset, our project
promises huge potential in benefits translated into true value to our stakeholders in days to come.
FUTURE OUTLOOK
So far, the outlook for the next year looks tough. High input costs are resulting in the closure of a large
number of textile mills engaged in the manufacturing of yarn and fabric. Both the spinning and weaving
sectors have faced the brunt of a higher cost of doing business despite being integral to the textile value
chain, the situation has made the sector unviable throughout the country.
Though the cotton availability is expected to remain comfortable or may improve further from that of previous
year, cotton prices are expected to be subdued since China is diluting their stock reserves. Measures are
being taken to save costs and rationalize operations, which are likely to yield positive results. Competition
from other exporting countries with lower cotton cost and devaluation of Indian rupee against US Dollar may
affect our future profitability. The operating margins are also under pressure due to high input costs towards
electricity and manpower.
With respect to home textile division current market is giving tough competition in term of price and
operational compliance. Forecasts about the World Economy and Country Economy not look prosperous as
the economic sanctions imposed on Turkey by the US. Similarly imposition of tariff on China products by the
US negatively impacting our economy by declining our exports to China.The management is making all out
efforts to run Plant at maximum capacity and keep operation profitable.

A lot depend now is what the new Government does regarding its policies towards export. If they make
policies that support export then the situation may improve. However currently, as things stand, the coming
year looks challenging.
CORPORATE SOCIAL RESPONSIBILITY
The management work towards empowering people by helping them develop the skills they need to succeed
in a global economy. The company equips communities with information, technology and the capacity to
achieve improved health, education and livelihood outcomes.
Key to this approach are employees of the company who generously give of their time, experience and talent
to serve communities; company encourages and facilitate them to do so.
POST BALANCE SHEET EVENTS
No material changes and commitments affecting the financial position of the company have occurred
between the end of the financial year to which this balance sheet relates and the date of the Director’s report.
RELATED PARTY TRANSACTION
The company has presented all related party transactions before the audit committee and the Board for their
review and approval. These transactions have been approved by the Audit Committee and Board in their
respective meetings. The details of all related part transactions have been provided in Note 39 of the
annexed financial statements for the year ended June 30, 2018.
CORPORATE GOVERNANCE, FINANCIAL REPORTING AND INTERANAL CONTROL SYSTEM
The Company is committed to good corporate governance and compliance with best practices. The
requirements of the Code of Corporate Governance set out by the Pakistan Stock Exchange in their Listing
Regulations have been duly complied with. A Statement to this effect is annexed with the Report.
We are pleased to report that:
• The financial statements, prepared by the management of the company present its state of affairs fairly, the
result of its operations, cash flows and changes in equity.
• Proper books of accounts of the company have been maintained.
• Appropriate accounting policies have been consistently applied in the preparation of financial statements
and any departure there from has been adequately disclosed and explained.
• The system of internal control is sound in design and has been effectively implemented and monitored.
Emphasis is being done on control procedures to ensure that the policies of the company are adhered with
and in case of any anomaly, rectification is done timely.
• The board is satisfied that the company is a going concern, Auditors have emphasized the matter of going
concern in their report however these financial statements have been prepared on going concern
assumption for reasons more fully disclosed in the financial statements.

• Key operating and financial data for the last six year is annexed.
• There are no statuary payments on account of taxes, duties, levies and charge which are outstanding as
on June 30th 2018 except for those disclosed in financial statements.
• Directors, Executives and their spouses and minor children did not carry out any transaction in shares of
the company during the year.
• The company has not arranged the training programs for its Directors during the year.
BOARD OF DIRECTORS
The Board of Directors of the company is predominantly independent which ensures transparency and good
corporate governance. Board members are competent and proficient leaders having immense experience in
various sectors of business world. The board comprises of Chairman, one independent Director, one
nominee Director, fivenon-executiveDirectors and three executive Directors (excluding the Chief Executive
Officer). The non-executiveDirectors bring to the company their vast experience of business, governance and
law, contributing valuable input and ensuring the company’s operations at a high standard of the principles of
legal and corporate compliance.
Following are the names of persons who were Directors of the company during the year 2017-2018, number
of board and committees’ meeting held during the year and status of attendance by:
Name of Directors Eligibility Attended

Mian Mohammad Ahmed (Chairman) 5 3
Mian Shahzad Ahmed (Chief Executive) 5 5
Mr. Riaz Ahmed 5 3
Mr. Naveed Ahmed 5 5
Mian Imran Ahmed 5 3
Mr. Kashif Riaz 5 4
Mr. Irfan Ahmed 5 5
Mr. Shahwaiz Ahmed 5 5
Mr. Shafqat Masood 5 5
Mr. Sheikh Nishat Ahmed 5 5
Mr. Farooq Hassan (Nominee NIT) 5 5

HUMAN RESOURCE ATTEEND REMENURATION COMMITTEE
Committee constitutes of:

1. Sheikh Nishat Ahmed (Chairman)
2. Mr.Irfan Ahmed (Member)
3. Mr. Shahwaiz Ahmed (Member)
One (1) Meeting was held during the financial year from July 2017 to June 2018. All three members were
present in the meeting.
AUDIT COMMITTEE MEETINGS
Four (4) meetings were held during the period from July 2017 to June 2018.All of the members are non-ex-
ecutive Directors including the Chairman.
Committee constitutes of and status of attendance during the year by:
Name of Members Eligibility Attended
Sheikh Nishat Ahmed (Chairman) 4 4

Mr. Irfan Ahmed (Member) 4 4
Mr. Kashif Riaz (Member) 4 4
DIRECTORS’ REMENURATION
The Directors has a formal remuneration policy for its Directors (Executive/Non-Executive) duly approved by
the Board of Directors. The policy has been designed as a component of HR strategy and both are required
to support business strategy. The Board believes that the policy is appropriate and effective in its ability to
attract and retain the best executives and Directors to run and manage the company as well as to create
congruence between Directors, executives and shareholders.
APPOINTMENT OF AUDITORS
Messer’s Deloitte Yousaf Adil, Chartered Accountant, (Deloitte) member firm of Deloitte Touché Tohmatsu
Limited, a reputable Chartered Accountants Firm completed its tenure of appointment with the company and
being eligible has offered its services for another term. The Board of Directors of Company, based on the
recommendation of the audit committee of the board, has proposed Deloitte for reappointment as auditors of
the company for the ensuring year.
AUDIT COMMITTEE
The Board of Directors constituted a fully functional Audit Committee comprising three members: one is Inde-
pendent Director and two are non-executive Director. The term of reference of the committee, inter alia,
consists of ensuring transparent internal audits, accounting and control systems, adequate reporting struc-
ture as well as determining appropriate measures to safeguard the Company’s assets.

INTERNAL AUDIT FUNCTION
The board have set up efficient and energetic internal control system with operational, financial and
compliance controls to carry on the business of the company. Internal audit findings are reviewed by the Audit
Committee, and where necessary, action is taken in the basis of recommendations contained in the internal
audit reports.
SHAREHOLDING PATTERN
The shareholding pattern as at June 30th, 2018 is annexed.
WEB PRESENCE
Annual and periodic financial statements of the company are also available on the website of the company
http://indus-group.com for information of the shareholders and others.
ACKNOWLEDGEMENT
We acknowledge the contribution of each and every employee of the Company. We would like to express our
thanks to our customers for the trust shown in our products and the bankers for continued support to the
Company.
We are also grateful to our shareholders for their confidence in our management.
Naveed Ahmed
Chief Executive Officer Director
Karachi
Dated: October 05, 2018

Key operating and financial results
2013 2014 2015 2016 2017 2018

Operating data
Turn over 17,943,482 18,849,796 20,514,847 18,269,007 19,932,316 22,263,855
Less : commission (331,466) (233,064) (229,804) (165,230) (175,252) (173,428)
Sales ( net ) 17,612,016 18,616,732 20,285,043 18,103,777 19,757,064 22,090,427
Gross profit 3,274,429 2,052,994 1,604,924 1,128,954 1,723,694 2,334,642
Profit before tax 2,323,393 1,059,747 423,937 268,893 962,934 1,561,596
Profit after tax 2,347,529 1,187,803 276,346 91,871 685,835 1,378,581
Financial data
Gross assets 11,315,251 16,124,298 15,667,103 16,782,496 17,229,879 19,691,466
Return on equity 27.89% 12.74% 2.96% 0.98% 6.91% 12.45%
Current assets 4,849,357 6,343,867 5,637,231 6,599,848 7,256,217 9,666,805
Shareholders equity 8,416,927 9,325,254 9,330,865 9,418,035 9,923,532 11,070,683
Long term debts and deferred liabilities 802,608 1,995,294 1,401,166 1,478,333 1,401,927 1,696,202
Current liabilities 2,095,716 4,803,750 4,935,072 5,886,128 5,904,420 6,924,581
Key ratios
Gross profit ratio 18.59% 11.03% 7.91% 6.24% 8.72% 10.57%
Net profit 13.33% 6.38% 1.36% 0.51% 3.47% 6.24%
Debt / equity ratio 09 : 91 18 : 82 13 : 87 14 : 86 12 : 88 13 : 87
Current ratio 2.31 1.32 1.14 1.12 1.23 1.40
Earning per share ( basic and diluted ) 129.89 65.72 15.29 5.08 37.95 76.28
Dividend ( percentage )
- Cash 100% Int 150% Int 150% Int 50% Final 180% Final -
- Stock - -
- Specie dividend 100 : 09 - - - - -
Statistics
Production ( tons ) 43,427 50,785 51,565 52,684 51,886 50,292

PATTERN OF HOLDING OF THE SHARES HELD BY THE SHAREHOLDERS

OF INDUS DYEING & MANUFACTURING CO. LIMITED
JUNE 30 2018
No. Of Shareholding Total Percentage

Shareholders From To Shares Held of Total Capital
1,148 1 100 30,880 0.17
136 101 500 32,610 0.18
23 501 1,000 13,162 0.07
21 1,001 5,000 39,170 0.22
2 5,001 15,000 23,725 0.13
7 15,001 50,000 190,430 1.05
2 50,001 100,000 162,700 0.90
4 100,001 500,000 1,362,795 7.54
3 500,001 800,000 1,854,578 10.26
2 1,200,001 1,500,000 2,749,939 15.22
3 1,500,001 2,200,000 6,261,045 34.64
1 2,880,001 5,352,700 5,352,698 29.62
1,352 18,073,732 100.00
Ca tegori es of s ha rehol di ng
No. of Shares
Sha rehol ders Percentage
Share Holders Held
Individuals 1,325 354,462 1.96

Joint Stock Companies 7 2,956 0.02
Financial Institutions 3 763,774 4.23
Insurance Companies 1 446,605 2.47
Mutual Fund 1 525,295 2.91
Directors, CEO their Spouses 15 15,980,640 88.42
& Minor Children
1,352 18,073,732 100
Individuals 1,325 354,462
Joint Stock Companies 7
N.H Capital Fund Limited 10

Kamal Factory (Pvt) Ltd 1,400
S.H. Bukhari Securities (Pvt) Ltd 525
United Securities (Pvt) Ltd 17
Mra Securities (Pvt) Ltd 700
Black Stone Equites (Pvt) Ltd 106
M/s Azeem Services (Pvt) Ltd 198
2,956

Financial Institutions 3
National Bank of Pakistan 267,657

National Investment Trust 11,227
United Bank Limited Trading Port Folio 484,890
763,774
Insurance Companies 1
State Life Insurance Corp. of Pakistan 446,605
446,605
Mutual Fund 1
CDC-Trustee National Investment (UNIT) Trust 525,295
525,295
Directors And Their Spouses 15
Mian Mohammad Ahmed 1,400,149

Mian Riaz Ahmed 1
Mr. Shahzad Ahmed 1,349,790
Mr. Naveed Ahmed 2,144,358
Mr. Kashif Riaz 5,352,698
Mr. Imran Ahmed 1,981,959
Mr. Irfan Ahmed 2,134,728
Mr. Shafqat Masood 40,585
Mr. Shahwaiz Ahmed 1,092
Mr. Sheikh Nishat Ahmed 100
Mrs. Salma Jabeen 78,820
Mrs. Lozina Shahzad 779,816
Mrs. Shazia Naveed 3,139
Mrs. Fadia Kashif 549,467
Mrs. Tahia Imran 163,938
15,980,640
18,073,732
Sha rehol ders hol di ng 10% or more voti ng i nteres t i n the compa ny a s a t June 30, 2018
Na me Hol di ng Percenta ge
Mr. Ka s hi f Ri a z 5,352,698 29.62

Mr.Imra n Ahmed 1,981,959 10.97
Mr. Na veed Ahmed 2,144,358 11.86
Mr. Irfa n Ahmed 2,134,728 11.81
purcha s e / s a l e of s ha res by Di rectors , Compa ny Secreta ry, Hea d of Interna l Audi t Depa rtment,
Chi ef Fi na nce Offi cer, Chi ef Executi ve Offi ce a nd thei r s pous es , mi nor chi l dren wa s Ni l duri ng 2017-2018

Statement of Compliance with Listed Companies (Code of Corporate Governance) Regulations, 2017
Indus Dyeing and Manufacturing Company Limited
For the year ending June 30, 2018
The Company has complied with the requirements of the Regulations in the following manner
1. The total number of director are 11 as per follows;
a) Male 11
b) Female -
2. The composition of Board is as followed;
Category Names
Independent Director Mr. Sheikh Nishat Ahmed

Executive Directors Mian Shahzad Ahmed
Mr. Naveed Ahmed
Mr. Sheikh Shafqat Masood
Non - Executive Directors Mian Mohammad Ahmed

Mr. Shahwaiz Ahmed
Mian Riaz Ahmed
Mr. Kashif Riaz
Mian Imran Ahmed
Mr . Irfan Ahmed
Mr . Farooq Hassan (Nominee
N.I.T)
3. The directors have confirmed that none of them is serving as a director on more than five listed
companies, including this company (excluding the listed subsidiaries of listed holding companies where
applicable).
4. The company has prepared a Code of conduct and has ensured that appropriate steps have been taken
to disseminate it throughout the company along with its supporting policies and procedures.
5. The board has developed a vision/mission statement, overall corporate strategy and significant policies
of the company. A complete record of particulars of significant policies along with the dates on which they
were approved or amended has been maintained.
6. All the powers of the Board have been duly exercised and decisions on relevant matters have been taken
by the board/ shareholders as empowered by the relevant provisions of the Act and these Regulations.
7. The meetings of the board were presided over by the chairman and, in his absence, by a director elected
by the board for this purpose. The board has complied with the requirements of Act and the Regulations
with respect to frequency, recording and circulating minutes of meeting of board.
8. The Board of directors have a formal policy and transparent procedures for the remuneration of the
directors in accordance with the Act and these Regulations.
9. Majority of the directors of the company are exempt from the requirement of the directors training
program in the regulations, except one director who obtained certificate under directors’ training program.
The board is in the process to obtain exemption from the Commission for all directors exempt on the
basis of qualification and experience criteria.

10. The board has approved appointment of CFO, Company Secretary and the Head of Internal Audit,
including their remuneration and terms and conditions of employment. The board is in the process of
assessing the requirement of current regulations and will make necessary changes in appointments in
ensuing years.
11. CFO and CEO duly endorsed the financial statements before approval of the board.
12. The board has formed committees comprising of the members given below:
a) Audit Committee
Chairman Mr Sheikh Nishat Ahmed
Members Mr. Kashif Riaz
Mr. Irfan Ahmed
b) HR and Remuneration Committee

Chairman Mr Sheikh Nishat Ahmed
Members Mr. Shahwaiz Ahmed
Mr. Irfan Ahmed
13. The terms of the reference of the aforesaid committees have been formed, documented and advised to
the committee for compliance.
14. The frequency of the meeting of the committee were as per following:
a) Audit Committee 5 meetings including 4 Quarterly meetings
b) HR and Remuneration Committee1 Annual year meeting held on October 2, 2017
15. The board has set up an effective internal audit function. The staff of Internal Audit Function is considered
suitably qualified and experienced for the purpose and are conversant with the policies and procedures
of the company.
16. The statutory auditors of the company have confirmed that they have been given a satisfactory rating
under the quality control review program of the ICAP and registered with Audit Oversight Board of
Pakistan, that they or any of the partners of the firm, their spouses and minor children do not hold shares
of the company and that the firm and all its partners are in compliance with the International Federation
of Accountants (IFAC) guidelines on code of ethics as adopted by the ICAP.
17. The statutory auditors or the persons associated with them have not been appointed to provide other
services except in accordance with the act, these regulations or any other regulatory requirement and the
auditors have confirmed that they have observed IFAC guidelines in this regards.
18. We confirm that all other requirements of the Regulations have been complied with except the following;
• The Company has not obtained the required acknowledgement from the Commission for determining
the suitability of chief financial officer and chief internal auditor; and
• Same person is simultaneously serving on the position of Company Secretary of two listed companies.
On behalf of the Board of Directors
Karachi: October 5, 2018 Shahzad Ahmad

Chief Executive

REVIEW REPORT TO THE MEMBERS ON THE STATEMENT OF COMPLIANCE

WITH THE CODE OF CORPORATE GOVERNANCE
We have reviewed the enclosed Statement of Compliance with the best practices contained in the
Code of Corporate Governance (the Code) prepared by the Board of Directors (the Board) of Indus
Dyeing & Manufacturing Company Limited (the Company) for the year ended June 30, 2017 to
comply with the requirements of the Code contained in the clause 5.19 of Rule Book of the Pakistan
Stock Exchange Limited where the Company is listed.
The responsibility for compliance with the Code is that of the Board of Directors of the Company.
Our responsibility is to review, to the extent where such compliance can be objectively verified,
whether the Statement of Compliance reflects the status of the Company’s compliance with the
provisions of the Code and report if it does not and to highlight any non-compliance with the
requirements of the Code. A review is limited primarily to inquiries of the Company’s personnel and
review of various documents prepared by the Company to comply with the Code.
As part of our audit of the financial statements we are required to obtain an understanding of the
accounting and internal control systems sufficient to plan the audit and develop an effective audit
approach. We are not required to consider whether the Board’s statement on internal control covers
all risks and controls or to form an opinion on the effectiveness of such internal controls, the
Company's corporate governance procedures and risks.
The Code requires the Company to place before the Audit Committee, and upon recommendation
of the Audit Committee, place before the Board for their review and approval, its related party
transactions distinguishing between transactions carried out on terms equivalent to those that
prevail in arm’s length transactions and transactions which are not executed at arm’s length price
and recording proper justification for using such alternate pricing mechanism. We are only required
and have ensured compliance of this requirement to the extent of the approval of the related party
transactions by the Board upon recommendation of the Audit Committee. We have not carried out
any procedures to determine whether the related party transactions were undertaken at arm’s
length price or not.
Based on our review, nothing has come to our attention which causes us to believe that the
Statement of Compliance does not appropriately reflect the Company’s compliance, in all material
respects, with the best practices contained in the Code as applicable to the Company for the year
ended June 30, 2017.
Engagement Partner:
Naresh Kumar
Date: October 06, 2018

Place: Karachi

NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the 61st Annual General Meeting of Indus Dyeing & Manufacturing. Co. Limited.
will be held at Indus Dyeing & Manufacturing Company Limited. Plot No. 3 & 7, Sector No. 25, Korangi
Industrial Area, Karachi on Saturday, October 27, 2018 at 11:30 A.M. to transact the following business:
ORDINARY BUSINESS:
1. To confirm minutes of the Annual General Meeting held on October 31, 2017.
2. To receive, consider, approve and adopt the audited financial statements of the Company for the
financial year ended June 30, 2018, together with the Directors’ and Auditors’ Reports thereon and
Chairman’s Review Report;
3. To appoint the Statutory Auditors for the year ending June 30, 2019 and to fix their remuneration. The
Board of Directors on the recommendation of Audit Committee has recommended the appointment of
retiring auditors, Messers Deloitte Yousuf Adil, Chartered Accountants who being eligible have offered
themselves for re-appointment;
4. To Consider and approve, as recommended by the Board of Directors, the payment of final cash
dividend for the year ended June 30, 2018 @160% i.e. Rs. 16/- per ordinary share.
SPECIAL BUSINESS:
5. To consider and approve enhancement in monthly remuneration of the Chief Executive and two
fulltime working Directors namely, Mr. Naveed Ahmed and Mian Imran Ahmed.
6. To transact any other business with the permission of the chair.
By Order of the Board
Karachi
Date; October 05, 2018 Ahmed Faheem Niazi
Company Secretary
STATEMENT UNDER SECTION 134(3) OF THE COMPANIES Act, 2017

Item 05 of the Agenda
Due to increase in the cost of living during the years, to enhance the monthly remuneration from Rs.
600,000/- per month to Rs. 1,200,000/- per month tax free for Mr. Shahzad Ahmed, Chief Executive and Mr.
Naveed Ahmed, and to fix monthly remuneration of Mr. Imran Ahmed, Director at Rs. 1,200,000/- per month.
The said remuneration is in addition to the Company maintained car; medical expenses; residential utilities,
recreational and telephone expenses etc in accordance with the company policy. Approval on the matter is
sought by passing the following resolution as an ordinary resolution pursuant to provisions of Articles of
Association of the Company:
Resolved that, a sum of Rs. 1,200,000/- per month tax free remuneration be and is hereby approved as a
remuneration of Mr. Shahzad Ahmed, Chief Executive, Mr. Naveed Ahmed, and Mian Imran Ahmed, Director
of the Company with effect from July 01, 2018 in addition to the Company maintained cars, medical
expenses, residential utilities, recreational and telephone expenses etc.
The directors have no other interest except to the extent of remunerations and other benefits approved in
accordance with the provisions of Articles of Association of the company.

Notes:
1. The Share Transfer Books of the Company will remain closed for the period from October 20, 2018 to
October 27, 2018 (both days inclusive) and the Final Cash Dividend will be paid to the Members whose
name appear in the Register of Members. Transfers received in order at the Office of Company’s Share
Registrar M/s Jwaffs Registrar Services (Pvt) Ltd, 407-408 Al-Ameera Center, Shahra-e-Iraq, Saddar
Karachi. (‘Registrar’) at the close of business on October 19, 2018 will be considered in time to attend
and vote at the Meeting.
2. Financial Statements for the year ended June 30, 2018 will be available at the website of the Company
www.indus-group.com twenty one days before the date of meeting.
Further, as per approval obtained from members in Annual General Meeting of the Company held on
October 31, 2016 to circulate Annual Audited Accounts through CD/DVD/USB in accordance with SRO
470(I)/2016 dated May 31, 2016 of Securities and Exchange Commission of Pakistan (SECP); Annual
Audited Accounts of the Company for the year ended June 30, 2018 are being dispatched to the
Members through CD/DVD. The Members may request a hard copy of Annual Audited Accounts free of
cost. Standard request form is available at the website of the Company www.indus-group.com
3. Pursuant to Section 223 of the Companies Act, 2017, the Company is allowed to send audited financial
statements and reports to its members electronically. Members are therefore requested to provide their
valid email IDs. For convenience, a Standard Request Form has also been made available on the
Company’s website www.indus-group.com
4. Members (Non-CDC) are requested to promptly notify the Company’s Registrar of any change in their
addresses and submit, if applicable to them, the Non-deduction of Zakat Form CZ-50 with the Registrar
of the Company M/s Jwaffs Registrar Services (Pvt) Ltd, 407-408 Al-Ameera Center, Shahra-e-Iraq,
Saddar Karachi.
6. A member of the Company entitled to attend and vote at this meeting, may appoint another member as
his/her proxy to attend and vote instead of him/her. Proxies, in order to be effective, must be received at
the Registered Office of the Company not less than 48 hours before the time for holding the meeting.
7. CDC Account Holders will further have to follow the under mentioned guidelines as laid down by the
Securities and Exchange Commission of Pakistan.
A. FOR ATTENDING THE MEETING:
i. In case of individuals, the accounts holders and/or sub-account holder and their registration details
are uploaded as per the CDC Regulations, shall authenticate his/her identity by showing his original
CNIC or Passport at the time of attending the Meeting.
ii. In case of corporate entity, the Board of Directors’ resolution / power of attorney with specimen
signature of the nominee shall be produced (unless it has been provided earlier) at the time of the
Meeting.
B. FOR APPOINTING PROXIES:
i. In case of individuals, the account holders and/or sub-account holder and their registration details
are uploaded as per the CDC Regulations, shall submit the proxy form as per the above
requirements.
ii. The proxy form shall be witnessed by two persons whose names, addresses and CNIC numbers
shall be mentioned on the form.

iii. Attested copies of CNIC or the passport of the beneficial owner and the proxy shall be furnished with
the proxy form.
iv. The proxy shall produce his/her original CNIC or original Passport at the time of meeting.
v. In case of corporate entity, the Board of Directors’ resolution/power of attorney with specimen
signature shall be submitted (unless it has been provided earlier) along with proxy form to the
Company.
8. Members are requested to notify Change in their addresses, if any; in case of book entry securities in
CDS to their respective participants/investor account services and in case of physical shares to the
Registrar of the Company by quoting their folio numbers and name of the Company at the above
mentioned address, if not earlier notified/submitted.
9 Deduction of Income Tax from Dividend under Section 150 of the Income Tax Ordinance, 2001
Pursuant to the provisions of the Finance Act 2018 effective July 1, 2018, the rates of deduction of income
(a) Rate of tax deduction for filer of income tax returns 15%
(b) Rate of deduction for non- filer of income tax returns 20%
The income tax is deducted from the payment of dividend according to Active Tax-Payers List (ATL)
provided on the website of FBR. All those shareholders who are filers of income tax returns are therefore
advised to ensure that their names are entered into ATL to enable the Company to withhold income tax from
payment of cash dividend @ 15% instead of 20%.
Further, according to clarification received from FBR, withholding tax will be determined separately on
'Filer/Non Filer' status of Principal Shareholder as well as Joint-holder(s) based on their shareholding
proportions in case of joint accounts held by the shareholders.
In this regard, all shareholders who hold shares jointly are requested to provide the shareholding
proportions of Principal Shareholder and Joint-holders in respect of shares held by them to our Shares
Registrar, in writing. The joint accounts information must reach to our Shares Registrar within 10 days of this
notice. In case of non-receipt of the information, it will be assumed that the shares are equally held by
Principal Shareholder and the Joint-holder(s).
Members seeking exemption from deduction of income tax or are eligible for deduction at a reduced rate are
requested to submit a valid tax certificate or necessary documentary evidence as the case may be.
10 Dividend Mandate and Payment of Cash Dividend through Electronic Mode
The provisions of Section 242 of the Companies Act, 2017 require that the dividend payable in cash shall
only be paid through electronic mode directly into the bank accounts designated by the entitled
shareholders. Therefore, for making compliance to the provisions of the law, all those physical shareholders
who have not yet submitted their IBAN bank account details to the Company are requested to provide the
same on the Dividend Mandate Form available on Company website at www.indus-group.com.
Non CDC shareholders are requested to send valid and legible copy of CNIC/Passport (in case of individual)
and NTN Certificate (in case of corporate entity) to the Registrar of the Company. Please note that CNIC
number is mandatory for issuance of dividend warrants and in the absence of this information payment of
dividend shall be withheld.

CDC shareholders who have also not provided their IBAN bank account details are also requested to
provide the same to their Participants in CDC and ensure that their IBAN bank account details are updated.
In case of unavailability of IBAN, the Company would be constrained to withhold dividend in accordance with
the Companies (Distribution of Dividends) Regulations, 2017.
11. Members may avail video conference facility for this Annual General Meeting other than Karachi, provided
the Company receives consent (standard format is given below) atleast 07 days prior to the date of the
Meeting from members holding in aggregate 10% or more shareholding residing at respective city.
The Company will intimate respective members regarding venue of the video-link facility before the date of
Meeting along with complete information necessary to enable them to access the facility.
“I/we _____________ of _________ being member(s) of Indus Dyeing & Manufacturing Company. Limited,
holder of _________ Ordinary Share(s) as per Registered Folio No./CDC Account No. ________ hereby opt
for video conference facility at __________i in respect of 61st Annual General Meeting of the Company.
_____________________
Signature of Member”
12 For any query/problem/information, Members may contact the Company at email l____________________
and/or the Share Registrar of the Company at above mentioned address and at (+92 21)
________________, email ____________________

INDEPENDENT AUDITOR’S REVIEW REPORT
TO THE MEMBERS OF INDUS DYEING & MANUFACTURING COMPANY LIMITED
Review Report on the Statement of Compliance contained in Listed Companies (Code of Corporate
Governance) Regulations, 2017
We have reviewed the enclosed Statement of Compliance with the Listed Companies (Code of Corporate
Governance) Regulations, 2017 (the Regulations) prepared by the Board of Directors of Indus Dyeing &
Manufacturing Company Limited (the Company) for the year ended June 30, 2018 in accordance with the
requirements of Regulation 40 of the Regulations.
The responsibility for compliance with the Regulations is that of the Board of Directors of the Company. Our
responsibility is to review whether the Statement of Compliance reflects the status of the Company’s
compliance with the provisions of the Regulations and report if it does not and to highlight any
non-compliance with the requirements of the Regulations. A review is limited primarily to inquiries of the
Company’s personnel and review of various documents prepared by the Company to comply with the
Regulations.
As a part of our audit of the financial statements, we are required to obtain an understanding of the
accounting and internal control systems sufficient to plan the audit and develop an effective audit approach.
We are not required to consider whether the Board of Directors’ statement on internal control covers all risks
and controls or to form an opinion on the effectiveness of such internal controls, the Company’s corporate
governance procedures and risks.
The Regulations require the Company to place before the Audit Committee, and upon recommendation
of the Audit Committee, place before the Board of Directors for their review and approval, its related party
transactions and also ensure compliance with the requirements of section 208 of the Companies Act, 2017.
We are only required and have ensured compliance of this requirement to the extent of the approval of the
related party transactions by the Board of Directors upon recommendation of the Audit Committee. We have
not carried out procedures to assess and determine the Company’s process for identification of related
parties and that whether the related party transactions were undertaken at arm’s length price or not.
Based on our review, nothing has come to our attention which causes us to believe that the Statement of
Compliance does not appropriately reflect the Company's compliance, in all material respects, with the
requirements contained in the Regulations as applicable to the Company for the year ended June 30, 2018.
Further, we highlight below instances of non-compliance with the requirements of the Regulations as
reflected in the paragraph reference where these are stated in the Statement of Compliance:
Paragraph
Sr # Description
reference
1 18 The Company has not obtained the required acknowledgement from the
Commission for determining the suitability of chief internal auditor and chief financial officer.
2 18 Same person is simultaneously serving on the position of Company

Secretary of two listed companies.
Chartered Accountants
Place: Karachi

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
Report on the Audit of the Unconsolidated Financial Statements
Opinion
We have audited the annexed unconsolidated financial statements of Indus Dyeing & Manufacturing
Company Limited (the Company), which comprise the unconsolidated statement of financial position as at
June 30, 2018, and the unconsolidated statement of profit and loss, the unconsolidated statement of
comprehensive income, the unconsolidated statement of changes in equity and the unconsolidated cash flow
statement for the year then ended, and notes to the unconsolidated financial statements, including a
summary of significant accounting policies and other explanatory information, and we state that we have
obtained all the information and explanations which, to the best of our knowledge and belief, were necessary
for the purposes of the audit.
In our opinion and to the best of our information and according to the explanations given to us, the
unconsolidated statement of financial position, the unconsolidated statement of profit and loss, the
unconsolidated statement of comprehensive income, the unconsolidated statement of changes in equityand
the unconsolidated cash flow statement together with the notes forming part thereof conform with the
accounting and reporting standards as applicable in Pakistan and give the information requiredby the
Companies Act, 2017 (XIX of 2017), in the manner so required and respectively give a true and fair view of
the state of the Company's affairs as at June 30, 2018 and of the profit and other comprehensive income, the
changes in equity and its cash flows for the year then ended.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs) as applicable in
Pakistan. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for
the Audit of the Unconsolidated Financial Statements section of our report. We are independent of the
Company in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for
Professional Accountants as adopted by the Institute of Chartered Accountants of Pakistan (the Code)and we
have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit
of the unconsolidated financial statements of the current period. These matters were addressed in the
context of our audit of the unconsolidated financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.

Following are the key audit matter:
Key audit matter How our audit addressed the key audit matter
1. Revenue Recognition
The Company is engaged in manufacturing and sale of Our audit procedures to assess the recognition of revenue,
yarn. Revenue recognition policy has been explained in amongst others, included the following:
notes 4.15, and the related amounts of revenue recognized
during the year are disclosed in note 26 to the • obtained understanding and performed testing on design
unconsolidated financial statements. and implementation and operating effectiveness of
controls designed to ensure that revenue is recognized in
The Company generates revenue from sale of goods to the appropriate accounting period and based on dispatch
domestic as well as export customers. of goods to customers in case of local customers and on
export of goods to customers outside Pakistan as
Revenue from the local (including indirect exports) and evidenced by respective bills of lading;
export sales is recognized when significant risks and
rewards of ownership have been transferred to the • assessed appropriateness of the Company’s accounting
customer. policies for revenue recognition in light of applicable
accounting and reporting standards; and
We identified revenue recognition as key audit matter since
it is one of the key performance indicators of the Company • checked on a sample basis whether the recorded local and
and because of the potential risk that revenue transactions export sales transactions were based on actual dispatch
may not have been recognized based on transfer of risk of goods or on exports, substantiated by supporting
and rewards to the customers in line with the accounting documents;
policy adopted and may not have been recognized in the
appropriate period. • Tested timeliness of revenue recognition by comparing
individual sales transactions before and after the year
end to underlying documents.
2. Valuation of stock in trade
Stock-in-trade has been valued following an accounting Our audit procedures to address the valuation of stock-in-
policy as stated in note 4.9 and the related value of stock- trade, included the following:
in-trade is disclosed in note 18 to the unconsolidated
financial statements. Stock-in-trade forms material part of • obtained an understanding of mechanism of recording
the Company’s assets comprising of around 24% of total purchases and valuation of stock-in-trade;
assets.
• tested on a sample basis purchases with underlying

The valuation of finished goods within stock-in-trade at cost supporting documents;
has different components, which includes judgment in
relation to the allocation of overheads costs, which are
incurred in bringing the finished goods to its present • verified the calculations of the actual overhead costs and
location and condition. Judgmentsare also involved in checked allocation of labor and overhead costs to the
determining the net realizable value (estimated selling finished goods;
price in the ordinary course of business less estimated cost
of completion and estimated costs necessary to make the • obtained an understanding of management’s process for
sale) of stock-in-trade items in line with accounting policy. determining the net realizable value and checked:
Due to the above factors, we have considered the valuation • future selling prices by performing a review of sales
of stock in trade as key audit matter. close to and subsequent to the year-end; and
• determination of cost necessary to make the sales.
• checked the calculations of net realizable value of

itemized list of stock-in-trade, on selected sample and
compared the net realizable value with the cost to ensure
that valuation of stock-in-trade is in line with the
accounting policy.
Information Other than the Unconsolidated Financial Statements and Auditor’s Report Thereon
Management is responsible for the other information. The other information comprises the information
included in annual report, but does not include the unconsolidated financial statements and our auditor’s
report thereon.

Our opinion on the unconsolidated financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon.
In connection with our audit of the unconsolidated financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the
unconsolidated financial statements or our knowledge obtained in the audit or otherwise appears to be
materially misstated.When we read the annual report, Ifwe conclude that there is a material misstatement of
therein, we are required to communicate the matter to those charged with governance and take necessary
actions as required under law. We have nothing to report in this regard.
Responsibilities of Management and Board of Directors for the Unconsolidated Financial Statements
Management is responsible for the preparation and fair presentation of the unconsolidated financial
statements in accordance with the accounting and reporting standards as applicable in Pakistan and the
requirements of the Companies Act, 2017 (XIX of 2017) and for such internal control as management
determines is necessary to enable the preparation of unconsolidated financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the unconsolidated financial statements, management is responsible for assessing the
Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless management either intends to liquidate the Company
or to cease operations, or has no realistic alternative but to do so.
Board of Directors are responsible for overseeing the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Unconsolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the unconsolidated financial statements as
a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with ISAs as applicable in Pakistan will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of these unconsolidated financial statements.
As part of an audit in accordance with ISAs as applicable in Pakistan, we exercise professional judgment and
maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the unconsolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the
related disclosures in the unconsolidated financial statements or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our

auditor’s report. However, future events or conditions may cause the Company to cease to continue as a
going concern.
• Evaluate the overall presentation, structure and content of the unconsolidated financial statements,
including the disclosures, and whether the unconsolidated financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
We communicate with the Board of Directors regarding, among other matters, the planned scope and timing
of the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the Board of Directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters
that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the Board of Directors, we determine those matters that were of most
significance in the audit of the unconsolidated financial statements of the current period and are therefore the
key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not
be communicated in our report because the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
Based on our audit, we further report that in our opinion:
a) proper books of account have been kept by the Company as required by the Companies Act, 2017 (XIX
of 2017);
b) the unconsolidated statement of financial position, the unconsolidated statement of profit and loss, the
unconsolidated statement of comprehensive income, the unconsolidated statement of changes in equity
and the unconsolidated cash flow statement together with the notes thereon have been drawn up in
conformity with the Companies Act, 2017 (XIX of 2017) and are in agreement with the books of account
and returns;
c) investments made, expenditure incurred and guarantees extended during the year were for the purpose
of the Company’s business; and
d) zakat deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980), was deducted by
the Company and deposited in the Central Zakat Fund established under section 7 of that Ordinance
The engagement partner on the audit resulting in this independent auditor’s report is Naresh Kumar.

Place: Karachi

Unconsolidated Statement of Financial Position

As at June 30, 2018
2018 2017 2018 2017
Note Rupees in '000 Note Rupees in '000
Equity and liabilities Assets
Share capital and reserves Non-current assets
Authorized share capital

45,000,000 ordinary shares
of Rs. 10 each 450,000 450,000 Property, plant
and equipment 13 6,310,579 6,215,360
Issued, subscribed and
paid up capital 5 180,737 180,737 Intangibles 14 19,592 24,517
Reserves 6 7,000,000 7,000,000 Long-term investments 15 3,689,680 3,729,680
Unappropriated profits 3,889,946 2,742,795 Long-term deposits 16 4,810 4,105
11,070,683 9,923,532 10,024,661 9,973,662
Non-current liabilities Current assets
Long-term financing 7 1,323,195 1,048,036 Stores, spares and

loose tools 17 265,723 256,082
Deferred liabilities 8 373,007 353,891 Stock-in-trade 18 4,716,028 4,203,973
1,696,202 1,401,927 Trade debts 19 3,533,973 1,286,181
Current liabilities Loans and advances 20 165,097 140,304
Trade and other payables 9 1,920,207 1,516,030 Trade deposits and

short-term prepayments 21 1,649 15,440
Unclaimed dividends 11,080 6,326
Other receivables 22 63,547 44,753
Interest / mark-up payable 10 44,631 41,436
Other financial assets 23 315,213 584,330
Short-term borrowings 11 4,594,774 3,911,125
Tax refundable 24 489,286 475,105
Current portion long term financing 7 353,889 429,503 Cash and bank balances 25 116,289 250,049
6,924,581 5,904,420 9,666,805 7,256,217

Contingencies and
commitments 12
19,691,466 17,229,879 19,691,466 17,229,879
The annexed notes from 1 to 47 form an integral part of these unconsolidated financial statements.
Arif Abdul Majeed Shahzad Ahmed Naveed Ahmed

Chief Financial Officer Chief Executive Officer Director

Unconsolidated Statement of Profit and Loss

For the year ended June 30, 2018
2018 2017
Note Rupees in '000
Sales - net 26 22,090,427 19,757,064
Coﬆ of goods sold 27 (19,755,785) (18,033,370)
Gross profit 2,334,642 1,723,694
Other income 28 286,630 48,817
2,621,272 1,772,511
Diﬆribution coﬆ 29 (324,886) (323,853)
Adminiﬆrative expenses 30 (249,080) (233,551)
Other operating expenses 31 (219,655) (74,732)
Finance coﬆ 32 (266,055) (177,441)
(1,059,676) (809,577)
Profit before tax 1,561,596 962,934
Taxation 33 (183,015) (277,099)
Profit for the year 1,378,581 685,835
------------ Rupees ------------

Earnings per share - basic and diluted 34 76.28 37.95
The annexed notes from 1 to 47 form an integral part of these unconsolidated financial ﬆatements.


Unconsolidated Statement of Comprehensive Income

2018 2017
Note Rupees in '000
Profit for the year 1,378,581 685,835
Items that may be reclassified subsequently to profit and loss - -
Items that will not be reclassified subsequently to

profit and loss
Remeasurement of defined benefit liability 8.1 4,329 488
Less: tax thereon (801) (88)
Total other comprehensive income for the year 3,528 400

3,528 400
Total comprehensive income for the year 1,382,109 686,235


Unconsolidated Statement Of Changes in Equity

Reserves
Capital Revenue
Issued,
subscribed Share Merger General Unappropriated
Total
and paid up premium reserve reserve profits
capital
---------------------------------------- Rupees in '000' -------------------------------------------------
Balance at June 30, 2016 180,737 10,920 11,512 5,000,000 4,214,866 9,418,035
Comprehensive income for the year ended June 30, 2017
Profit for the year - - - - 685,835 685,835

Other comprehensive income for the year net of tax - - - - 400 400
Total comprehensive income for the year - - - - 686,235 686,235
Transfer to general reserve - - - 1,977,568 (1,977,568) -
Transactions with owners recognized directly in equity
Final cash dividend for the year ended

June 30, 2016 @ Rs. 5 per share - - - - (90,369) (90,369)
Interim cash dividend for the period ended

September 30, 2016 @ Rs. 5 per share - - - - (90,369) (90,369)
Balance at June 30, 2017 180,737 10,920 11,512 6,977,568 2,742,795 9,923,532
Comprehensive income for the year ended June 30, 2018
Profit for the year - - - - 1,378,581 1,378,581

Other comprehensive income for the year net of tax - - - - 3,528 3,528
Total comprehensive income for the year - - - - 1,382,109 1,382,109
Transactions with owners recognized directly in equity
Final cash dividend for the year ended

June 30, 2017 @ Rs. 13 per share - - - - (234,958) (234,958)
Balance at June 30, 2018 180,737 10,920 11,512 6,977,568 3,889,946 11,070,683


Unconsolidated Cash Flow Statement

2018 2017
Note Rupees in '000
A. Cash flows from operating activities
Cash generated from operations 35 212,229 1,582,429

Taxes paid - net (213,364) (324,028)
Finance cost paid (262,860) (160,598)
Gratuity paid 8.1 (44,901) (52,469)
Net cash (used in) / generated from operating activities (308,896) 1,045,334
B. Cash flows from investing activities
Payment for purchase of property, plant and equipment (739,176) (409,610)

Proceeds from disposal of property, plant and equipment 13.2 31,697 22,853
Purchase of investments in other financial assets (464,088) (1,334,125)
Proceeds from redemption of investments in other
financial assets 695,979 1,028,324
Payment for investment in subsidiary companies 15.2.3 - (6,957)
Dividends received 5,521 2,955
Net cash used in investing activities (470,067) (696,560)
C. Cash flows from financing activities
Receipts from long-term finance 7.1 620,095 260,971

Repayment of long-term finance 7.1 (420,549) (280,596)
Dividends paid (230,204) (200,084)
Net cash used in financing activities (30,658) (219,709)
Net decrease in cash and cash equivalents (A+B+C) (809,621) 129,065

Cash and cash equivalents at beginning of the year (3,661,076) (3,793,364)
Effect of exchange rate changes on cash and cash equivalents (7,788) 3,223
Cash and cash equivalents at end of the year 36 (4,478,485) (3,661,076)


Notes to the Unconsolidated Financial Statements
1. LEGAL STATUS AND NATURE OF BUSINESS

Indus Dyeing & Manufacturing Company Limited (the Company) was incorporated in Pakistan on
July 23, 1957 as a public limited company under the repealed Companies Act,1913 (subsequently
replaced by the repealed Companies Ordinance, 1984 and now Companies Act, 2017). Registered
office of the Company is situated at Office No. 508, 5th floor, Beaumont Plaza, Civil Lines, Karachi.
The Company is currently listed on the Pakistan Stock Exchange Limited. The principal activity of
the Company is manufacturing and sale of yarn. The manufacturing facilities of the Company are
located in Karachi, Hyderabad and Muzaffargarh. The addresses of these facilities are as follows:
Manufacturing Unit Address
Hyderabad P-1, S.I.T.E, Hyderabad, Sindh
Karachi Plot Number 03 & 07, Sector 25, Korangi Industrial Area,
Muzaffargarh Muzaffargarh, Bagga Sher, District Multan
Karachi.
The Company has the following investees:
- Indus Lyallpur Limited - Wholly owned subsidiary
- Indus Home Limited - Wholly owned subsidiary
- Indus Home USA Inc. - Wholly owned subsidiary of Indus Home Limited
- Indus Wind Energy Limited - Wholly owned subsidiary
- Sunrays Textile Mills Limited - Associated undertaking
1.1 Significant transactions and events affecting the Company’s financial position and
performance
Following are the most significant events that had considerably impacted the financial position and
financial performance of the Company.
- The Company's investment in one of the subsidiaries was impaired during the year based on
indicators mentioned in related accounting standard (refer note 15.2.3).
- Due to devaluation of Pakistani Rupee during the year ended June 30, 2018, the Company has
recorded an exchange gain amounted to Rs. 137.7 million with respect to transactions in
foreign currency receivables denominated in US Dollar (note 28)
- During the year the Company has received duty drawback of taxes of Rs. 120.25 million, on
export sales, as per duty drawback of taxes order 2016-2017 and 2017- 2018.
- After application of the Companies Act, 2017, certain amounts reported for the previous year
are restated. For information please refer note 2.3.
2. BASIS OF PREPARATION
2.1 Statement of compliance
These financial statement have been prepared under accounting and reporting standard as
applicable in Pakistan. The accounting and reporting standards applicable in Pakistan comprise of
International Financial Reporting Standards (IFRS) issued by the International Accounting
Standards Board (IASB) as notified under the Companies Act, 2017 and provisions of and directives
issued under the Companies Act, 2017. Where provisions of and directives issued under the
Companies Act, 2017 differ from the IFRS, the provisions of and directives issued under the Companies
Act, 2017 have been followed.

2.2 Basis of measurement
These unconsolidated financial statements have been prepared under the historical cost convention
except for certain employee retirement benefits which are measured at present value and certain
financial instruments which are carried at fair value.
The Company also prepares consolidated financial statements in accordance with IAS 28 -
Investment in Associates and IFRS 10 - Consolidated Financial Statements.
2.3 New amendments that are effective for the year ended June 30, 2018
The following amendments are effective for the year ended June 30, 2018. These amendments are
either not relevant to the Company's operations or are not expected to have significant impact on
the Company's financial statements other than certain additional disclosures.
Amendments Effective date

(accounting periods
Amendments to IAS 7 'Statement of Cash Flows' -
January 01, 2017
Amendments as a result of the disclosure initiative
Amendments to IAS 12 'Income Taxes' - Recognition of
January 01, 2017
deferred tax assets for unrealised losses
Certain annual improvements have also been made to a number of IFRSs, which do not have a
significant effect on the financial reporting of the Company and therefore have not been discussed here.
The Companies Act, 2017 (the Act) has also brought certain changes with regard to preparation
and presentation of annual and interim financial statements of the Company, which interalia include
presentation of unclaimed dividend and dividend payable on the face of the statement of financial position.
Further, the disclosure requirements contained in the Fourth Schedule to the Act have been
- elimination of duplicative disclosures with the IFRS disclosure requirement; and
- incorporation of significant additional disclosures.
2.4 New accounting standards / amendments and IFRS interpretations that are not yet effective
The following standards, amendments and interpretations are only effectivefor accounting periods,
beginning on or after the date mentioned against each of them. These standards, interpretations
and the amendments are either not relevant to the Group's operations or are not expected to have
significant impact on the Group's consolidated financial statements other than certain additional disclosures.
Standards / Amendments / Interpretation Effective date
(accounting periods
Amendments to IFRS 2 'Share-based Payment' -
Clarification on the classification and measurement of January 01, 2018
share-based payment transactions
IFRS 4 'Insurance Contracts': Amendments regarding the An entity choosing to
interaction of IFRS 4 and IFRS 9. apply the overlay
approach retrospectively
to qualifying financial
assets does so when it
first applies IFRS 9. An
entity choosing to apply
the deferral approach does
so for annual periods
beginning on or after
1 January 2018.

IFRS 9 'Financial Instruments' - This standard will

supersede IAS 39 Financial Instruments: Recognition and July 01, 2018
Measurement upon its effective date.
Amendments to IFRS 9 'Financial Instruments' -

Amendments regarding prepayment features with January 01, 2019
negative compensation and modifications of financial liabilities
IFRS 15 'Revenue from contracts with customer' - This

standard will supersede IAS 18, IAS 11, IFRIC 13, 15 and July 01, 2018
18 and SIC 31 upon its effective date.
Standards / Amendments / Interpretation Effective date

(accounting periods
IFRS 16 'Leases': This standard will supersede IAS 17

January 01, 2019
'Leases' upon its effective date.
Amendments to IAS 19 'Employee Benefits' -

January 01, 2019
Amendments regarding plan amendments, curtailments or settlements.
Amendments to IAS 28 'Investments in Associates and

Joint Ventures' - Amendments regarding long-term
interests in an associate or joint venture that form part of January 01, 2019
the net investment in the associate or joint venture but to
which the equity method is not applied.
Amendments to IAS 40 'Investment Property': Clarification January 01, 2018. Earlier

on transfers of property to or from investment property application is permitted.
IFRIC 22 'Foreign Currency Transactions and Advance January 01, 2018. Earlier
Consideration': Provides guidance on transactions where application is permitted.
IFRIC 23 'Uncertainty over Income Tax Treatments':

Clarifies the accounting treatment in relation to
determination of taxable profit (tax loss), tax bases, January 01, 2019
unused tax losses, unused tax credits and tax rates,
when there is uncertainty over income tax treatments
under IAS 12 'Income Taxes'
Certain annual improvements have also been made to a number of IFRSs.
2.4.1 IFRS 9 'Financial Instruments'
IFRS 9 'Financial Instruments' was issued on July 24, 2017. This standard is adopted locally by the
Securities and Exchange Commission of Pakistan and is effective from accounting periods
beginning on or after July 01, 2018.
Key requirements of IFRS 9 are as follows;

Classification and measurement of financial assets
- All recognized financial assets that are within the scope of IFRS 9 are required to be
subsequently measured at amortised cost or fair value.
- Debt investments that are held within a business model whose objective is to collect the
contractual cash flows, that are solely payments of principal and interest on the principal
outstanding are generally measured at amortised cost at the end of subsequent accounting periods.
- Debt instruments that are held within a business model whose objective is achieved both by
collecting contractual cash flows and selling financial assets, and that have contractual terms
that give rise on specified dates to cash flows that are solely payments of principal and interest
on the principal amount outstanding are generally measured at fair value through other
comprehensive income "FVTOCI".
- All other debt investments and equity investments are measured at their fair value at the end of
subsequent accounting periods.
In addition, under IFRS 9, entities may make an irrevocable election to present subsequent
changes in the fair value of an equity investment (that is not held for trading) in other
comprehensive income, with only dividend income generally recognized in profit or loss.
Classification and measurement of financial liabilities
With regard to the measurement of financial liabilities designated as at fair value through profit or
loss, 'IFRS 9 requires as follows:
The amount of change in the fair value of a financial liability that is attributable to changes in the
credit risk of that liability is presented in other comprehensive income, unless the recognition of
such changes in other comprehensive income would create or enlarge an accounting mismatch in
profit or loss.
Changes in fair value attributable to a financial liability's credit risk are not subsequently reclassified
to profit or loss. Under IAS 39, the entire amount of the change in the fair value of the financial
liability designated as fair value through profit or loss is presented in profit or loss.
Impairment of financial assets
In relation to the impairment of financial assets, IFRS 9 requires an expected credit loss model, as
opposed to an incurred credit loss model under IAS 39. The expected credit loss model requires an
entity to account for expected credit losses and changes in those expected credit losses at each
reporting date to reflect changes in credit risk since initial recognition. In other words, it is no longer
necessary for a credit event to have occurred before credit losses are recognized.
2.4.2 Impact assessment of standards, amendments and interpretations
The above standards, amendments and interpretations are not expected to have any material
impact on the Company's financial statements in the period of initial application of except for IFRS
15 - Revenue From Contracts With Customers and IFRS 9- Financial Instruments .The Company is
currently evaluating the impact of these standards.

2.4.3 Other than the aforesaid standards, interpretations and amendments, the International Accounting
Standards Board (IASB) has also issued the following standards which have not been adopted
locally by the Securities and Exchange Commission of Pakistan:
- IFRS 1 – First Time Adoption of International Financial

- IFRS 14 – Regulatory Deferral Accounts
- IFRS 17 – Insurance Contracts
3. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS
The preparation of unconsolidated financial statements in conformity with the approvedaccounting

standards as applicable in Pakistan, requires management to make estimates, assumptions and
judgment that affect the application of policies and the reported amount of assets, liabilities,
income and expenses.
Estimates and judgments, if any, are continually evaluated and are based on historical experience
and other factors, including expectations of future events that are believed to be reasonable under
the circumstances. The areas where various assumptions and estimates are significant to the
unconsolidated financial statements or where judgment was exercised in application of accounting
policies are as follows:
- Provision for current and deferred tax (note 4.1 and 33)
- Provision for gratuity (note 4.2 and 8.1)
- Depreciation rates of property, plant and equipment (note 13.1)
- Classification and impairment of investment (note 4.7, 15 and 23)
- Net realizable value of stock-in-trade (note 4.9 and 18)
- Provision for impairment of trade debts and other receivables (note 4.10, 19 and 22)
- Useful lives of intangibles (note 4.6, and 14)
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies applied in the preparation of these unconsolidated financial
statements are set out below. These policies have been consistently applied to all the years
presented, unless otherwise stated.
4.1 Taxation
Current
Provision for current taxation is based on taxability of certain income streams of the Company
under presumptive / final tax regime at the applicable tax rates, remaining taxable income at the
current rates, of taxation under normal tax regime after taking into account tax credits and rebates
available, if any, or on turnover at the specified rate or Alternative Corporate Tax as defined in
section 113C of Income Tax Ordinance, 2001, whichever is higher.
Deferred
Deferred tax is recognized using balance sheet liability method for all major temporary differences
arising between tax bases of assets and liabilities and their carrying amounts in the unconsolidated
financial statements.

Deferred tax liabilities are generally recognized for all taxable temporary differences and deferred
tax assets are recognized to the extent that it is probable that taxable profits and taxable
temporary differences will be available against which deductible temporary differences can be
utilized. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced
to the extent that it is no longer probable that sufficient taxable profits and taxable temporary
differences will be available to allow all or part of the assets to be recovered.
Deferredtax is calculated at the tax rates that are expected to apply to the period when the liability
is settled or the asset realized. Deferred tax is charged or credited in the profit and loss account,
except when it relates to items charged or credited directly to equity, in which case the deferred
tax is also dealt with in equity. The effect of deferred taxation of the portion of the income subject to
final tax regime is also considered in accordance with the requirement of Technical Release - 27 of
Institute of Chartered Accountants of Pakistan.
4.2 Employee benefits
Defined benefit plan
The Company operates an unfunded gratuity scheme covering all its employees who have
completed minimum qualifying period. Provisions are determined based on the actuarial valuation
conducted by a qualified actuary using Projected Unit Credit Method. Under this method cost of
providingfor gratuity is charged to profit and loss account so as to spread the cost over the service
lives of the employees in accordance with the actuarial valuation. Past-service costs are
recognized immediately in profit and loss account and actuarial gains and losses are recognized
immediately in other comprehensive income.
Compensated absences
The Company provides for compensated absences of its employees on unavailed balance of leaves
in the period in which the leaves are earned.
4.3 Trade and other payables

Liabilities for trade and other amounts payable are carried at cost which is the fair value of the
consideration to be paid in future for goods and services received whether billed to the Company or
not.
4.4 Borrowings
Borrowings are recognised initially at fair value, net of transaction costs incurred and are
subsequently stated at amortised cost. Any difference between the proceeds (net of transaction
costs) and the redemption value is recognised in statement of profit or loss over the period of
borrowings using the effective interest rate method.
Borrowings are classified as current liabilities unless the Company has an unconditional right to
defer the settlement of the liability for at least twelve months after the reporting date. Exchange
gains and losses arising in respect of borrowings in foreign currency are added to the carrying amount of the borrowing.
4.5 Property, plant and equipment
4.5.1 Owned
Property, plant and equipment owned by the Company are stated at cost less accumulated
depreciation and impairment loss if any, except for freehold land which is stated at cost.
Depreciation is charged to profit and loss account using the reducing balance method whereby
cost of an asset is written-off over its estimated useful life at the rates given in note 13.1.

An item of property and equipment is derecognized upon disposal or when no future economic
benefits are expected to flow from its use or disposal. Any gain or loss arising on derecognition of
the asset is recognized in the profit and loss account in the year the asset is derecognized.
In respect of additions and disposals during the year, depreciation is charged from the month of
acquisition and upto the month preceding the disposal respectively.
Subsequent costs are included in the asset's carrying amount or recognized as a separate asset,
as appropriate, only when it is probable that future economic benefits associated with the item will
flow to the Company and the cost of the item can be measured reliably. All other repairs and
maintenance are charged to income during the year in which they are incurred.
Depreciation methods, useful lives and residual values are reviewed periodically and adjusted, if
appropriate, at each reporting date.
4.5.2Capital work-in-progress
Capital work-in-progress (CWIP) is stated at cost less accumulated impairment, if any. All
expenditures connected to the specific assets incurred during the installation and construction
period are carried under CWIP. These are transferred to specific assets as and when assets are
ready for their intended use.
4.6 Intangible assets
Intangible assets of the Company are stated at cost less accumulated amortisation and
impairment loss if any. Amortisation is charged to profit and loss account using the reducing
balance method at the rates given in note 14.1. The estimated useful life and amortisation method
are reviewed at the end of each reporting period, with the effect of any change in estimate being
accounted for on prospective basis.
4.7 Impairment
4.7.1 Financial assets
The Company assesses at each reporting date whether there is any objective evidence that a
financial asset or a group of financial assets is impaired. A financial asset or a group of financial
assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result
of one or more events that have occurred after the initial recognition of the asset (an incurred ‘loss
event’) and that loss event has an impact on the estimated future cash flows of the financial asset
or the group of financial assets that can be reliably estimated. Evidence of impairment may include
indications that the debtors or a group of debtors is experiencing significant financial difficulty,
default or delinquency in interest or principal payments, the probability that they will enter
bankruptcy or other financial reorganization and where observable data indicate that there is a
measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions
that correlate with defaults.
4.7.2 Non-financial assets
The Company assesses at each reporting date whether there is any indication that assets except
deferred tax assets and inventories may be impaired. If such indication exists, the carrying
amounts of such assets are reviewed to assess whether they are recorded in excess of their
recoverable amount. Where carrying values exceed the respective recoverableamount, assets are
written down to their recoverable amounts and the resulting impairment loss is recognized in profit
and loss account. The recoverable amount is the higher of an asset's fair value less costs to sell
and value in use.

Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to
the revised estimate of its recoverable amount, but so that the increased carrying amount does not
exceed the carrying amount that would have been determined had no impairment loss been
recognised for the asset in prior years. A reversal of an impairment loss is recognised immediately
in profit and loss account.
4.8 Stores, spares and loose tools
These are valued at cost determined on moving average cost method less allowance for obsolete
and slow moving items. Items in transit are valued at invoice values plus other charges incurred
thereon.
4.9 Stock-in-trade
These are valued at lower of cost and net realizable value. Cost is determined by applying the
following basis:
Basis of valuation
Raw material Weighted average cost
Work-in-progress Weighted average cost of material and share of

applicable overheads
Basis of valuation
Finished goods Weighted average cost of material and share of

applicable overheads
Packing material Moving average cost
Waste Net realizable value
Stock in transit Accumulated cost till reporting date
Net realizable value is the estimated selling price in the ordinary course of business less the
estimated cost of completion and estimated cost necessary to make the sale.
4.10 Trade debts and other receivables
Trade debts and other receivables are carried at original invoice amount less an estimate made for
doubtful receivables based on review of indicators as discussed in note 4.6.1. Balances considered
bad and irrecoverable are written off when identified.
4.1 Investments
4.11.1 Regular way purchase or sale of investments
All purchases and sales of investments are recognized using settlement date accounting.
Settlement date is the date when the investments are delivered to or by the Company.

4.11.2 Investment in associate and subsidiaries

Associate is an entity over which the Company has significant influence but not control, generally
represented by shareholding of 20% to 50% of the voting rights or common directorship.
Subsidiary is an entity due to which the Company is exposed, or has rights, to variable returns
from its involvement with such entity and has the ability to affect those returns through its power
over the investee entity.
The investments in subsidiary and associate are stated at cost less any impairment losses in
these unconsolidated financial statements. Subsequently, the recoverable amount is estimated to
determine the extent of impairment losses, if any, and carrying amounts are adjusted accordingly.
Impairment losses are recognized as expense in the profit and loss account. Where impairment
losses subsequently reverse, the carrying amounts of the investments are increased to the revised
recoverable amounts but limited to the extent of initial cost of investments. Reversal of impairment
loss is recognized in the profit and loss account adjusted for impairment, if any, in the recoverable
4.11.3 Financial assets at fair value through profit or loss - held-for-trading
An investment that is acquired principally for the purpose of generating profit from short-term
fluctuations in prices is classified as ''fair value through profit or loss - held-for-trading''.
Financial assets are initially recognized at fair value plus transaction costs except for financial
assets carried 'at fair value through profit or loss'. Financial assets carried 'at fair value through
profit or loss' are initially recognized at fair value and transaction costs are recognized in the profit
and loss account.
Subsequent to initial recognition, equity securities designated by the management as 'at fair value
through profit or loss' are valued on the basis of closing quoted market prices available at the stock
exchange.
All investments are de-recognized when the rights to receive cash flows from the investments have
expired or have been transferred and the Company has transferred substantially all risks and
rewards of ownership.
Net gains and losses arising from changes in the fair value of financial assets carried 'at fair value
through profit or loss' are taken to the profit and loss account.
4.11.4 Derivative financial instruments
Derivativesare initially recorded at fair value on the date a derivativecontract is entered into and are
remeasured to fair value at subsequent reporting dates. Derivativeswith positive impact at reporting
date are included in 'other financial assets' and with negative impacts in 'trade and other payable' in
the balance sheet. The resultant gains and losses are included in other income or other expenses
respectively.
Derivatives financial instruments entered into by the Company do not meet the hedging criteria as
defined by IAS 39, Financial Instruments: 'Recognition and Measurement'. Consequently hedge
accounting is not used by the Company.
4.12 Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying
assets, which are assets that necessarily take a substantial period of time to get ready for their
intended use or sale, are added to the cost of those assets, until such time that such assets are
substantially ready for their intended use or sale.

All other borrowing costs are recognized in profit and loss account in the period in which these are
incurred.
4.1 Foreign currency transactions and translation
These unconsolidated financial statements are presented in Pakistani Rupees, which is the
Company's functional and presentation currency. Transactions in other than Pakistani Rupee are
translated into reporting currency at the rates of exchange prevailing on the date of transactions. At
each reporting date, monetary assets and liabilities that are denominated in foreign currencies are
retranslated at the rates prevailing on the reporting date.
Gains and losses arising on retranslation are included in profit or loss account.
4.1 Provisions
Provisions are recognized when the Company has a present, legal or constructive obligation as a
result of past event, it is probable that an outflow of resources embodying economic benefits will be
required to settle the obligation and a reliable estimate of the amount can be made. However,
provisions are reviewed at each reporting date and adjusted to reflect the current best estimate.
4.2 Revenue recognition
Revenue is recognized to the extent it is probable that the economic benefits will flow to the
Company and the revenue can be measured reliably. Revenue is measured at the fair value of the
consideration received or receivable, and is recognized on the following basis:
Sales are recorded when the significant risk and rewards of ownership of the goods have been
passed to the customers which coincide with the dispatch of goods to the customers for local
sales and date of bill of lading for export sales.
Income on bank deposits are recorded on time proportionate basis using effective interest rate.
Dividend income is recognized when the right to receive the dividend is established.
Duty drawbacks are recognised on receipt basis when there is reasonable assurance that
these will certainly be received.
Gain from sale of securities is recognised in the period when these are sold.
Gain on revaluation of foreign currency receivables and payables are determined and
recognised based on rates prevalent at reporting dates and settlement date
4.2 Financial instruments
All financial assets and liabilities are recognized at the time when the Company becomes party to
the contractual provisions of the instrument and derecognized when the Company loses control of
the contractual rights that comprise of the financial assets and in case of financial liability when the
obligation specified in the contract is discharged, cancelled or expired. Other particular recognition
methods adopted by the Company are disclosed in the individual policy statements associated
with each item of financial instruments.

4.17 Offsetting of financial assets and financial liabilities

A financial asset and a financial liability is offset and net amount is reported in the balance sheet if
the Company has a legal right to offset the recognized amounts and also intends either to settle on
a net basis or to realize the asset and settle the liability simultaneously.
4.18 Cash and cash equivalents
Cash and cash equivalents are carried in the balance sheet at cost. For the purposes of cash flow
statement, cash and cash equivalents comprise cash, balances with banks on current and deposit
accounts and short term borrowings excluding loans from directors and their spouses.
4.19 Dividend distribution
Dividend distribution to the Company’s shareholders is recognized as a liability in the

unconsolidated financial statements in the period in which the dividends are approved.
4.20 Earnings per share
The Company presents basic and diluted earnings per share (EPS) data for its ordinary shares.
Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the
Company by the weighted average number of ordinary shares outstanding during the year. Diluted
EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the
weighted average number of ordinary shares outstanding for the effects of all dilutive potential
ordinary shares.
4.21 Segment reporting
Segment information is presented on the same basis as that used for internal reporting purposes
by the Chief Operating Decision Maker (CODM). The Company considers Chief Executive as its
CODM who is responsible for allocating resources and assessing performance of the operating
segments. On the basis of its internal reporting structure, the Company considers itself to be a
single reportable segment; however, certain information about the Company’s products, as required
by the approved accounting standards, is presented in note 42 to these financial statements.
5. ISSUED, SUBSCRIBED AND PAID UP CAPITAL
2018 2017 2018 2017
Number of shares Note Rupees in '000
Ordinary shares of Rs.10/- each

9,637,116 9,637,116 fully paid in cash 96,371 96,371
Other than cash

5,282,097 5,282,097 Issued to the shareholders of YTML 5.1 52,821 52,821
3,154,519 3,154,519 Issued as bonus shares 31,545 31,545
18,073,732 18,073,732 180,737 180,737
5.1 These shares were issued pursuant to the Scheme of Amalgamation with Yousuf Textile Mills
Limited (YTML), determined as at October 01, 2004, in accordance with agreed share-swap ratio.
5.2 There was no movement in issued, subscribed and paid up capital during the year.

5.3 The Company has only one class of ordinary shares which carry no right to fixed income. The
holders are entitled to receive dividends as declared from time to time and are entitled to one vote
per share at meetings of the Company. All shares rank equally with regard to the Company's
residual assets.
5.4 The Company has no reserved shares for issuance under options and sales contracts.
2018 2017
6. RESERVES Note Rupees in '000
Capital
Share premium 6.1 10,920 10,920
Merger reserve 6.2 11,512 11,512
Revenue 22,432 22,432

General reserve 6.3 6,977,568 6,977,568
7,000,000 7,000,000
6.1 This represents share premium received in year 2001 in respect of the issue of 3,639,960 right
shares at a premium of Rs.3/- per share.
6.2 Merger reserve represents excess of (a) assets of YTML over its liabilities merged with the
Company over (b) consideration to shareholders of YTML as per the Scheme of Amalgamation.
(Refer note 5.1)
6.3 This represents reserves created out of profits of the Company.

2018 2017
Note Rupees in '000
7. LONG-TERM FINANCING
Secured
From banking companies 7.1, 7.2 & 7.3 1,677,084 1,477,539
Less: Payable within one year (353,889) (429,503)
1,323,195 1,048,036
7.1 Details and movement are as follows:
Acquired Repaid
As at July As at June
Name of banks during the during the
01, 2017 30, 2018
year year
-------------------- Rupees in '000 -------------------------
Allied Bank Limited - 134,438 - 134,438
Askari Bank Limited 172,313 - 29,865 142,448
Bank Al Falah Limited 30,000 - 20,000 10,000
Bank Al-Habib Limited 219,500 - 94,000 125,500
Habib Bank Limited 559,758 - 92,830 466,928
MCB Bank Limited - 378,922 - 378,922
Meezan Bank Limited 138,127 - 105,533 32,594
Soneri Bank Limited 30,000 - 20,000 10,000
United Bank Limited 327,841 106,735 58,321 376,255
Grand Total 1,477,539 620,095 420,549 1,677,085

7.2 Particulars of long-term financing
2018
Amount Mark up rate Terms of
Type and nature of loan
outstanding per annum repayments
Rupees in '000
Term finances 284,875 3 month KIBOR + 0.5% Quarterly
to 0.75%
Long term finance facility Quarterly
1,392,209 2.50% to 7.0%
(LTFF) and half
1,677,084
2017
Type and nature of loan Amount Mark up rate Terms of
outstanding per annum Repayments
Rupees in '000
Term finances 627,018 3 month KIBOR + 0.5% Quarterly

to 0.75%
Long term finance facility Quarterly
850,521 2.50% to 7.0%
(LTFF) and half
1,477,539
7.3 These finances are secured by charge over property, plant and equipment of the Company.
7.4 There is no non-compliance of the financing agreements with banking companies which may
expose the Company to penalties or early repayment.
7.5 Sanctioned amount on long term financing amounts to Rs. 5,155 million (2017: Rs. 5,155 million)
2018 2017
Note Rupees in '000
8. DEFERRED LIABILITIES
Provision for gratuity 8.1 230,814 210,024
Deferred taxation 8.2 142,193 143,867
373,007 353,891
8.1 Provision for gratuity

The Company operates unfunded gratuity scheme for all its confirmed employees who have
completed the minimum qualifying period of service. Provision is made to cover obligations under
the scheme on the basis of valuation conducted by a qualified actuary. The latest valuation was
conducted on June 30, 2018 using Projected Unit Credit Method. Details of assumptions used and
the amounts recognized in these financial statements are as follows :
2018 2017
Significant actuarial assumptions
Discount rate (%) 9.00 7.75
Expected rate of increase in salary level (%) 8.50 6.75
Weighted average duration of defined benefit obligation 7 years 7 years

The expected maturity analysis of undiscounted retirement benefit obligation is:
Undiscounted payments
------------Rs. '000---------
Year 1 26,933
Year 2 34,907
Year 3 45,161
Year 4 37,349
Year 5 36,780
Year 6 and above 146,180
Mortality rates assumed were based on the SLIC 2001-2005 mortality table.
The rates for withdrawal from service and retirement on ill-health grounds are based on industry /
country experience.
2018 2017
Rupees in '000
Present value of defined benefit obligation 230,814 210,024
Movement in net defined benefit liability
Balance at the beginning of the year 210,024 189,134
Recognized in profit and loss account

Current service cost 55,483 62,037
Interest cost 14,537 11,810
70,020 73,847
Recognized in other comprehensive income
Actuarial gains - net (refer below) (4,329) (488)
Benefits paid (44,901) (52,469)
Balance at the end of the year 230,814 210,024
Actuarial gains - net
Actuarial losses due to change in financial assumption 13,439 -
Actuarial gain due to experience adjustments (17,768) (488)
(4,329) (488)
Reasonable possible changes at the reporting date to one of the relevant actuarial assumptions,
holding other assumptions constant, would have affected the defined benefit obligation by the
amount shown below:

Impact on defined benefit obligation
Change in
assumptions Increase Decrease
-- (Rupees in '000) ---
Discount rate 1% (211,072) 254,053

Salary growth rate 1% 253,938 (210,818)
The expected gratuity expense for the next year amounted to Rs. 76.7 million. This is the
amount by which defined benefit liability is expected to increase.
Risks to which the scheme maintained by the Company is exposed are as follows such as:
Salary risk
The risk that the final salary at the time of cessation of service is higher than what was
assumed. Since the benefit is calculated on the final salary, the benefit amount increases similarly.
Mortality / withdrawal risk
The risk that the actual mortality / withdrawal experience is different. The effect depends upon
the beneficiaries' service / age distribution and the benefit.
Longevity risk
The risk arises when the actual lifetime of retirees is longer than expectation. This risk is
measured at the plan level over the entire retiree population.
Recognized in
8.2 Deferred taxation
Recognized in statement of
Opening profit and loss comprehensive Closing
balance account income balance
-------------------- (Rupees in '000) ----------------------
Movement for the year ended
June 30, 2018
Deductible temporary differences in respect of:
Provision for:
- retirement benefits (37,725) (5,795) 801 (42,719)

- provision of stores and spare parts (180) (18) - (198)
- other financial assets (2,788) (9,594) - (12,382)
- impairment on subsidiary - (11,000) - (11,000)
Unclaimed amortisation on intangibles - (169) (169)
Unutilized minimum tax paid (179,352) 27,629 - (151,723)
(220,045) 1,053 801 (218,191)
Taxable temporary differences in respect of:

- accelerated tax depreciation 363,912 (3,528) - 360,384
Deferred tax liability 143,867 (2,475) 801 142,193

Recognized in
--------------------- (Rupees in '000) ----------------------
June 30, 2017
Deductible temporary differences in respect of:

Provision for:
- other financial assets (69) (2,719) - (2,788)
Unutilized minimum tax paid (102,629) (76,723) - (179,352)
(115,889) (104,244) 88 (220,045)

- accelerated tax depreciation 180,889 183,023 - 363,912
Deferred tax liability 65,000 78,779 88 143,867
As at year end, the net reversal of Rs. 1.67 million in the deferred tax liability balance for the year
has been recognized as under:
2018 2017
Note Rupees in '000
Profit and loss account (2,475) 78,779

Other comprehensive income 801 88
(1,674) 78,867
9. TRADE AND OTHER PAYABLES
Creditors 9.1 161,791 83,186

Accrued liabilities 1,376,227 1,065,739
Infrastructure cess 295,678 244,231
Workers' Profits Participation Fund 9.2 7,487 51,107
Advance from customers 38,451 27,954
Withholding tax payable 8,888 7,975
Others 31,685 35,838
1,920,207 1,516,030
9.1 This includes Rs. 6.53 million (2017: Rs. 4.54 million) due to related parties (refer note 38 for
details).

2018 2017
Note Rupees in '000
9.2 Workers' Profits Participation Fund
Balance at beginning of the year 51,107 14,447

Allocation for the year 72,487 51,107
123,594 65,554
Payments made during the year (116,107) (14,447)
Balance at end of the year 7,487 51,107
10. INTEREST / MARK-UP PAYABLE

On secured loans from banking companies:
- Long-term financing 12,571 13,786

- Short-term borrowings 32,060 27,650
44,631 41,436
11. SHORT-TERM BORROWINGS

From banking companies - secured
Running finance / cash finance arrangements 11.1 3,544,375 2,561,920

Foreign currency financing against export / import 11.2 1,050,399 1,349,205
11.3 4,594,774 3,911,125
11.1 These carry mark-up ranging from 1 week KIBOR + 0.05% and 3 month KIBOR + 0.05% to 1%
(2017: 1 week KIBOR + 0.02% to 1% and 3 month KIBOR + 0.02% to 1%). These are secured
against charge over current assets of the Company with upto 25% margin.
11.2 These carry mark-up ranging from 1.8% to 2.2% (2017: 1% to 2.25%) on foreign currency
borrowing amount. These arrangements are secured against charge over current assets of the
Company.
11.3 The Company has aggregated short-term borrowing facilities amounting to Rs. 9,970 million
(2017:Rs. 9,970 million) from various commercial banks.
12. CONTINGENCIES AND COMMITMENTS

12.1 Contingencies
12.1.1 Under the Gas Infrastructure Development Cess Act, 2011, Government of Pakistan levied Gas
Infrastructure Development Cess (GIDC) on gas bills at the rate of Rs. 13 per MMBTU on all
industrial consumers. In the month of June 2012, the Federal Government revised GIDC rate from
Rs. 13 per MMBTU to Rs. 100 per MMBTU and further increased from Rs.100 per MMBTU to Rs.
200 per MMBTU in July 2014.

The Company filed a suit before the High Court of Islamabad, challenging the applicability of Gas
Infrastructure Cess Act 2011. The Islamabad High Court has restrained the Federation and gas
companies from recovering GIDC over and above Rs. 13 per MMBTU. On August 22, 2014, the
Supreme Court of Pakistan declared that the levy of GIDC as a tax was not levied in accordance
with the Constitution and hence not valid.
In September 2014, the Federal Government promulgated Gas Infrastructure Cess Ordinance No.
VI of 2014 to circumvent earlier decision of the Supreme Court on the ground that GIDC was a
'Fee' and not a 'Tax'. In May 2015, the said Ordinance was approved by the Parliament and
became an Act.
Following the imposition of the said Act, many consumers filed a petition in Honorable Sindh
High Court and obtained stay order against the Act passed by the Parliament. On October 26,
2016, the learned single Judge of Honorable High Court of Sindh had passed an order to refund /
adjust the GIDC collected in the future bills of the respective plaintiff. In other similar case, the
said order was stayed by the Honorable Sindh High Court through order dated November 10,
2016. The Company intervened in the aforementioned case for clarification and the decision of Court is pending.
In view of aforementioned developments, the Company on prudent basis, recognized provision for
GIDC as at June 30, 2018 amounting to Rs. 726.06 million (2017: Rs. 569.36 million) in these financial statements.
12.1.2 A show cause notice bearing No. DCIR/E&Cunit-01/CREST/Zone-I/LTU/2018 dated June 11,
2018 was issued in respect of inadmissible input claim on the purchase invoices of cement, steel
and varnish, packing material and Crest discrepancies involving sales tax amount of Rs. 75.99
million. A detailed reply has been submitted by the management, however the case is pending
for the decision by the Tax Authorities. The Tax advisor of the Company is confident that the
above said matter will be decided in favor of the Company.
2018 2017
Rupees in '000
12.1.3 Claim of arrears of social security contribution not
acknowledged, appeal is pending in honorable High
Court of Sindh. The management is hopeful for favorable outcome. 453 453
12.1.4 Guarantees issued by banks in favour of custom
authorities on behalf of the Company 3,817 3,817
12.1.5 Guarantees issued by banks in favor of gas / electric companies 104,768 77,558
12.1.6 Bank guarantees against payment of infrastructure cess 296,042 253,042
12.2 Commitments
Letters of credit for raw material and stores and spares 1,098,318 444,576
Letters of credit for property, plant and equipment 203,663 366,705
Sales contracts to be executed 2,530,447 2,358,629
12.3 The Company has total unutilised facility limit against letters of credit aggregating to Rs 4.62
billion (2017: Rs. 4.44) as of reporting date.
2018 2017
Note Rupees in '000
13. PROPERTY, PLANT AND EQUIPMENT
Operating fixed assets 13.1 6,295,541 6,187,997
Capital work-in-progress 13.4 15,038 27,363
6,310,579 6,215,360

13.1 Operating Fixed Assets
2018
Cost Additions / Cost Accumulated Depreciation/ Accumulated Carrying

at July 01, (disposal) during at June 30, depreciation (adjustment) depreciation value at Depreciation
Particulars 2017 the year 2018 at July 01 during the year at June 30, June 30, Rate
2017 2018 2018
< - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - Rupees in '000' - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - > %
Owned
Freehold land 14,302 - 14,302 - - - 14,302 -
Leasehold land 127,094 - 127,094 - - - 127,094 -
Factory buildings 1,314,612 41,945 1,356,557 470,071 44,325 514,396 842,161 5%
Non-factory buildings 177,606 - 177,606 103,028 7,458 110,486 67,120 10%
50
Office building 110,316 20,100 130,416 21,072 5,468 26,540 103,876 5%
Plant and machinery 8,719,733 505,567 9,062,815 4,304,711 465,037 4,645,113 4,417,702 10%
(162,485) (124,635)
Electric installations 211,823 9,788 221,611 105,892 10,798 116,690 104,921 10%
Power generators 716,670 138,156 845,847 314,567 41,116 348,530 497,317 10%
(8,979) (7,153)
Office equipment 11,359 - 11,359 5,122 623 5,745 5,614 10%
Furniture and fixtures 32,164 2,150 24,892 12,074 2,055 6,841 18,051 10%
(9,422) (7,288)
Vehicles 203,179 33,795 225,660 114,324 21,392 128,277 97,383 20%

(11,314) (7,439)
June 30, 2018 11,638,858 751,501 12,198,159 5,450,861 598,272 5,902,618 6,295,541
(192,200) (146,515)
Annual Report 2018

2017
Cost Additions / Cost Accumulated Depreciation/ Accumulated Carrying

at July 01, (disposal) during at June 30, depreciation (adjustment) depreciation value at Depreciation
Particulars 2016 the year 2017 at July 01, during the year at June 30, June 30, Rate
2016 2017 2017

< - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - Rupees in '000' - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - > %
Annual Report 2018

Owned
Freehold land 14,902 - 14,302 - - - 14,302 -

(600)
Leasehold land 52,035 75,059 127,094 - - - 127,094 -
Factory buildings 1,312,586 2,026 1,314,612 425,713 44,358 470,071 844,541 5%
Non-factory buildings 177,606 - 177,606 94,742 8,286 103,028 74,578 10%
Office building 110,316 - 110,316 16,375 4,697 21,072 89,244 5%
Plant and machinery 8,519,301 283,250 8,719,733 3,897,818 475,964 4,304,711 4,415,022 10%
(82,818) (69,071)
Electric installations 211,823 - 211,823 94,120 11,772 105,892 105,931 10%
51
Power generators 594,390 122,280 716,670 280,411 34,156 314,567 402,103 10%
Office equipment 11,359 - 11,359 4,429 693 5,122 6,237 10%
Furniture and fixtures 27,952 4,212 32,164 9,988 2,086 12,074 20,090 10%
Vehicles 202,464 17,299 203,179 103,538 20,990 114,324 88,855 20%

(16,584) (10,204)
June 30, 2017 11,234,734 504,126 11,638,858 4,927,134 603,002 5,450,861 6,187,997
(100,002) (79,275)
2018 2017
13.1.1 Allocation of depreciation Note Rupees in '000'
Manufacturing expense 27.2 568,734 574,536

Administrative expense 30 29,538 28,466
598,272 603,002
13.2 Disposals of operating fixed assets
Accumulated Carrying Sale Gain / Mode of Particulars of

Particulars Cost
depreciation value proceeds (loss) disposal buyers
----------------------------------- Rupees in '000' -----------------------------------
Plant and machinery

Autocone Schalaforst 20,749 (12,912) 7,837 8,096 259 Negotiation Gulf Textile
Autoconer Schalaforst 31,360 (26,021) 5,339 1,500 (3,839) Negotiation MKM Textile Int.
Ring Frames 51,105 (38,765) 12,340 7,200 (5,140) Negotiation AJ Textile Mills
Machconer Savio 64 Spindles 5,006 (4,025) 981 632 (349) Negotiation Muhammad Kamran
Ring Frames 12,673 (9,613) 3,060 1,200 (1,860) Negotiation Nagra Spin Mills PVT Limited
Autocone Schalaforst 17,127 (13,470) 3,657 2,874 (783) Negotiation Gulf Textile
Schalaforst 17,021 (13,452) 3,569 2,310 (1,259) Negotiation Gulf Textile
Capio Slub Device 4,524 (3,575) 949 170 (779) Negotiation Muhammad Kamran
159,565 (121,833) 37,732 23,982 (13,750)
Vehicles
Honda Prosmatec 2,090 (1,516) 574 600 26 Negotiation Ghulam Murtaza
Honda Prosmatec 2,511 (746) 1,765 2,100 335 Negotiation Insurance Claim
4,601 (2,262) 2,339 2,700 361
Furniture & fixtures
Office furniture 9,422 (7,288) 2,134 165 (1,969) Negotiation Zubair Kabari
9,422 (7,288) 2,134 165 (1,969)
Power generators
Caterpillar Generator 8,979 (7,153) 1,826 1,900 74 Negotiation Gulzar traders
8,979 (7,153) 1,826 1,900 74
Assets having carrying value less
52
9,633 (7,979) 1,654 2,950 1,296 Negotiation Various
than Rs. 500,000
2018 192,200 (146,515) 45,685 31,697 (13,988)
2017 100,002 (79,275) 20,727 22,853 2,125
13.3 Particulars of immovable property (i.e. land and building) in the name of Company are as follows:
Covered
Total Area
Location Usage of immovable Area
(In acres)
property (In sq.ft)
Land:
Korangi mill - Plot No. 3 & 7, Sector 25, Korangi, Karachi Manufacturing facility and labour colony 12.50 544,500.00
Hyderabad mill - Plot No. P-1 & P-5, S.I.T.E, Hyderabad Manufacturing facility and labour colony 29.00 1,263,240.00
Nooriabad land - Plot No. K-31 & K-32, Nooriabad Held for business expansion 40.00 1,742,400.00
Shujabad land - Railway Road, Shujabad Held for business expansion 15.64 681,441.75
Naseerpur land - Adda Pira Ghayaib, Mototly Road Manufacturing facility 8.28 360,459.00
Muzaffergarh mill - Bagga Sher, Khan pur Shumail, District Multan Manufacturing facility and labour colony 30.86 1,344,370.50
Lahore land - 2.5 Kilometer off Manga Raiwind Road, Lahore Held for business expansion 15.80 688,248.00
Factory and non factory buildings:
Korangi mill - Plot No. 3 & 7, Sector 25, Korangi, Karachi Manufacturing facility and labour colony 8.50 370,647.00
Karachi- Office No. 508, 5th Floor, Beaumont Plaza, Karachi Business office 0.14 5,946.03
Hyderabad mill - Plot No. P-1, S.I.T.E, Hyderabad Manufacturing facility and labour colony 21.36 930,711.00
Annual Report 2018

Muzaffergarh mill - Bagga Sher, Khan pur Shumail, District Multan Manufacturing facility and labour colony 13.92 606,498.00
Raiwind Road, Manga Mandi, Lahore Held for business expansion 0.09 3,750.00
2018 2017
Note Rupees in '000
13.4 Capital work-in-progress
Civil works 4,350 27,363
Advance against purchase of vehicles 10,688 -
13.4.1 15,038 27,363
13.4.1 Capital work-in-progress

Advance
Civil Plant and against
Total
works machinery purchase
of vehicles
….………………...(Rupees '000)…...………..…………
As at June 30, 2016 20,391 96,247 5,241 121,879
Additions during the year 6,972 123,027 4,640 134,639

Transferred to operating fixed assets - (219,274) (9,881) (229,155)
As at June 30, 2017 27,363 - - 27,363
Additions during the year 18,857 - 10,688 29,545

Transferred to operating fixed assets (41,870) - - (41,870)
As at June 30, 2018 4,350 - 10,688 15,038
2018 2017
14 INTANGIBLES Note Rupees in '000
Intangibles under use - software 14.1 11,492 16,417
Intangibles under implementation - software 14.2 8,100 8,100
19,592 24,517
14.1 Intangibles under use - software
Year ended June 30
Net book value as at July 1 16,417 -
Additions - 18,241
Amortization for the year 14.1.1 (4,925) (1,824)
Net book value as at June 30 11,492 16,417
At June 30
Cost 18,241 18,241
Accumulated amortization (6,749) (1,824)
Net book value 11,492 16,417
Annual amortization rate 30% 30%
14.1.1 Amortization for the year has been charged to administrative expenses.

14.2 Intangibles under implementation - ERP software Rupees in '000

As at June 30, 2016 26,341
Transferred to intangible assets (18,241)
As at June 30, 2017 8,100

Transferred to intangible
assets -
As at June 30, 2018 8,100
2018 2017
Note Rupees in '000
15. LONG-TERM INVESTMENTS
Investment in associate
Sunrays Textile Mills Limited 15.1 13,476 13,476
Investment in subsidiaries 15.2.1, 15.2.2 & 15.2.3 3,676,204 3,716,204
3,689,680 3,729,680
15.1 The existence of significant influence by the Company is evidenced through

common directorship in the associate.
15.2 Investment in subsidiaries
15.2.1 Indus Home Limited (IHL) 2,491,204 2,491,204
IHL is a wholly owned subsidiary of the Company and is involved in the business of griege, terry
towel and other textile products. The subsidiary is incorporated in Pakistan as a public unlisted
company. Investment in IHL is carried at cost in these unconsolidated financial statements.
2018 2017
Rupees in '000
15.2.2 Indus Lyallpur Limited (ILP) 1,185,000 1,185,000
ILP is a wholly owned subsidiary of the Company and is involved in the business of
manufacturing, export and sale of yarn. The subsidiary is incorporated in Pakistan as public
unlisted company. Investment in ILP is carried at cost in these unconsolidated financial statements.
2018 2017
Rupees in '000
15.2.3 Indus Wind Energy Limited (IWE)
Opening 40,000 33,043
Advance against equity - 6,957
Impairment on investment (40,000) -
Closing - 40,000
IWE is a wholly owned subsidiary of the Company and is involved in the business of generation
and distribution of power. The subsidiary is incorporated in Pakistan as a public unlisted
company on February 21, 2015. Investment in IWE is carried at cost less accumulated impairment
loss in these unconsolidated financial statements.

As per the requirements relating to impairment mentioned in applicable financial reporting

standards, management has assessed to book an impairment loss against the carrying value of
investment and receivable amount relating to IWE. Management estimates based on uncertainty
relating to determination of tariff, letter of support, financial closing and commencement of opertaions.
2018 2017
16. LONG-TERM DEPOSITS Note Rupees in '000
Electricity 2,139 3,790

Others 2,671 315
4,810 4,105
17. STORES, SPARES AND LOOSE TOOLS
Stores, spares and loose tools 17.1 266,723 257,082
Less: Provision for slow moving and obsolete stock (1,000) (1,000)
265,723 256,082
17.1 It includes stores and spares in transit amounting to Rs. 26.67 million (2017: Rs. 18.7 million).
2018 2017
18. STOCK-IN-TRADE Note Rupees in '000
Raw material
- in hand 3,304,280 3,115,787
- in transit 583,335 183,578
3,887,615 3,299,365
Work-in-process 242,775 218,812
Finished goods 470,984 584,759
Packing material 54,604 41,346
Waste 60,050 59,691
4,716,028 4,203,973
19. TRADE DEBTS

Considered good
Secured
Foreign debtors 19.1 & 19.3 2,663,225 440,281
Local debtors 19.2 14,740 18,573
2,677,965 458,854
Unsecured
Local debtors 19.4 856,008 827,327
3,533,973 1,286,181
Less: Provision for doubtful debts - -
3,533,973 1,286,181

19.1 The amount of export sales in respect of outstanding trade debts along with foreign jurisdiction is
below:
2018 2017
Debt Sale Debt Sale
------------------------------------- Rupees in '000 -------------------------------------
Bangladesh 1,870 1,774 - -

Brazil - - 7,880 7,908
China 2,185,725 2,072,686 221,331 222,115
France - - 3,521 3,534
Germany - - 7,127 7,152
Hong Kong 25,895 24,556 - -
India - - 8,635 8,666
Italy 71,312 67,624 27,109 27,205
Japan 85,573 81,147 9,339 9,372
Korea 99,473 94,329 19,545 19,615
Manila 14,154 13,422 2,291 2,300
Portugal 33,702 31,959 14,073 14,123
Singapore 24,969 23,678 - -
Taiwan 22,815 21,635 - -
Turkey 97,737 92,682 119,427 119,850
2,663,225 2,525,491 440,281 441,840
All these debts are secured against letters of credit.
19.2 The details of past due or impaired trade debts from associates and related parties are as
follows:
Maximum Total
aggregate Up to 6 More than
2018 2017
Name outstanding at months 6 months
the end of any
month
Subsidiaries:
Indus Home Limited 209,557 14,740 - 14,740 17,248

Associates:
Sunrays Textile Mills Limited - - - - 1,054
Indus Heartland Limited - - - - 271
19.3 These are secured against letters of credit in favour of the Company.
19.4 Trade debts consist of a large number of customers, spread across geographical areas. Ongoing
credit evaluation is performed on the financial condition of credit customers, to assess their
recoverability.

2018 2017
Note (Rupees in '000)
19.5 Aging of trade debts
From 1 to 30 days 951,352 786,880
From 30 to 60 days 258,797 207,439
From 60 to 90 days 881,914 183,785
From 90 to 180 days 1,441,910 108,077
3,533,973 1,286,181
20. LOANS AND ADVANCES

Considered good
Loans / advances to staff 20.1 30,179 21,115
Advance income tax - net 20.2 91,283 77,591
Advances to:
- Suppliers 6,516 4,351
- Others 37,119 37,247
43,635 41,598
165,097 140,304
20.1 These are interest free, secured against gratuity entitlements and granted of an amount not more
than Rs. 500,000.
2018 2017
Note (Rupees in '000)
20.2 Advance income tax - net
Advance income tax 285,120 281,989
Provision for taxation 33 (185,490) (196,294)
Workers Welfare Fund 20.2.1 (8,347) (8,104)
91,283 77,591
20.2.1 Prior to certain amendments made through the Finance Acts of 2006 & 2008, Workers Welfare
Fund (WWF) was levied at 2% of the total income assessable under the Income Tax Ordinance,
2001 excluding incomes falling under the Final Tax Regime (FTR). Through Finance Act, 2008,
an amendment was made in Section 4(5) of the WWF Ordinance, 1971 (the Ordinance) whereby
WWF liability is applicable at 2% of the higher of the profit before taxation as per the accounts or
declared income as per the return.
Aggrieved by the amendments made through the Finance Acts, certain stakeholders filed petition
against the changes in the Lahore High Court which struck down the aforementioned
amendments to the Ordinance in 2011. However, the Company together with other stakeholders
also filed the petition in the Sindh High Court which, in 2013, decided the petition against the
Company and other stakeholders. Management has filed a petition before the Honorable
Supreme Court of Pakistan against the decision of the Sindh High Court.

Honorable Supreme Court of Pakistan has passed an order dated November 10, 2016 that the
Workers' Welfare Fund (WWF) is a fee, not a tax. Hence, the amendments made through
Finance Acts, 2006 and 2008 have been declared invalid in the said order. Therefore, the
management believes that in the light of the aforementioned judgement, all cases pertaining to
WWF, pending for adjudication would be decided in the favour of the Company. The management
has filed an application for rectification order amounting to Rs. 125.28 million for the years from
2010 to 2014 contending the fact that they had erroneously paid WWF despite of having exemption
available to them.
2018 2017
21. TRADE DEPOSITS AND SHORT-TERM PREPAYMENTS Note Rupees in '000
Considered good
Trade deposits 1,577 1,577
Prepayments 72 13,863
1,649 15,440
22. OTHER RECEIVABLES

Considered good
Cotton claims againﬆ short deliveries 28,226 13,175
Others 22.1 & 22.2 35,321 31,578
63,547 44,753
22.1 The details of past due and impaired trade debts from associates and related parties are as
follows:
Maximum Up to 6 More than Total
aggregate months 6 months 2018 2017
Name outstanding at
the end of any
month
Indus Wind Energy Limited 27,943 17,224 10,719 27,943 10,719
22.2 The movement in provision for impairment against due from a related party (Indus Wind Energy
Limited) during the year is as follows:
Total
2018 2017
Balance at beginning of the year - -
Provisions during the year 27,943 -
Balance at end of the year 27,943 -
2018 2017
23. OTHER FINANCIAL ASSETS
Note Rupees in '000
At fair value through profit or loss - held-for-trading
Investment in ordinary shares of listed companies 23.1.1 82,785 126,958
Investment in units of mutual funds 23.1.2 232,428 457,372
315,213 584,330

23.1 Particulars of other financial assets

23.1.1 Investment in ordinary shares of listed companies
2018 2017 2018 2017
Number of shares Note Rupees in '000
42,000 42,000 Bestway Cement Limited 5,502 9,203
- 160,000 Engro Fertilizers Limited - 8,838
40,000 45,000 Engro Corporation Limited 12,554 14,666
30,000 30,000 Fauji Fertilizer Company Limited 2,967 2,479
15,000 15,000 Habib Bank Limited 2,497 4,037
2,050,000 1,850,000 K-Electric Limited 11,644 12,765
13,304 11,088 Pakistan State Oil Company Limited 4,235 4,295
10,000 10,000 Pak Elektron Limited 355 1,103
Pakistan International Airlines
100,000 100,000 Corporation Limited 409 584
193,900 193,900 Pioneer Cement Limited 9,086 25,207
25,950 25,950 Sitara Chemical Industries Limited 9,558 11,538
141,900 136,900 United Bank Limited 23,978 32,243
82,785 126,958
23.1.2 Investment in units of mutual funds

2018 2017
Number of units
- 9,979,741 ABL Income Fund - 100,151
2,163 2,163 HBL Money Market Fund 232 220
1,081 1,081 HBL Cash Fund (Formerly PICIC Cash Fund) 115 109
- 3,965,107 Meezan Cash Fund - 199,960
266 266 Meezan Sovereign Fund 14 14
497,400 497,400 Meezan Income Fund 31,503 38,006
9,917 9,917 NAFA Government Security Liquid Fund 106 101
- 11,013,815 NAFA Money Market Fund - 108,580
100,000 100,000 NAFA Islamic Active Allocation Plan-V 8,965 9,868
1,803,098 3,505 UBL Liquidity Plus Fund 191,482 353
104 104 UBL Money Market Fund 11 10
232,428 457,372
24. TAX REFUNDABLE
Sales tax refundable 95,904 139,109

Income tax refundable 393,382 335,996
489,286 475,105
25. CASH AND BANK BALANCES

With banks
- in deposit accounts 25.1 12,786 12,807
- in current accounts 97,165 231,151
109,951 243,958
Cash in hand 6,338 6,091
116,289 250,049

25.1 Markup rates on these accounts range between 3.5% - 8.5% per annum (2017: 3.75% - 5.75% per annum)
25.2 These include balance in foreign currency accounts aggregating to Rs.19.89 million at year end (2017: Rs.
16.31 million)
2018 2017
Note Rupees in '000
26. SALES - NET
Export sales 26.1 & 26.2 14,844,757 12,205,627
Less: Commission (107,021) (117,800)
14,737,736 12,087,827
Local sales
Yarn 6,692,541 7,222,368

Waste 726,557 504,321
7,419,098 7,726,689
Less:
Brokerage on local sales (66,407) (57,452)
22,090,427 19,757,064
26.1 It includes exchange gain of Rs.169.18 million (2017: loss of Rs.15.48 million) and indirect exports of Rs.
3,044.33 million (2017: Rs. 878 million).
26.2 This includes indirect exports to related undertakings of Rs. 225.94 million (2017: Rs. 214 million) (refer
note 38 for details).
2018 2017
Note Rupees in '000
27. COST OF GOODS SOLD
Raw material consumed 27.1 15,330,843 14,321,269

Manufacturing expenses 27.2 4,172,366 3,948,073
Outside purchases - yarn for processing 163,123 3,700
19,666,332 18,273,042
Work in process
- Opening 218,812 218,243

- Closing (242,775) (218,812)
(23,963) (569)
Cost of goods manufactured 19,642,369 18,272,473
Finished goods
- Opening 644,450 405,347
- Closing (531,034) (644,450)
113,416 (239,103)
19,755,785 18,033,370

27.1 Raw material consumed
Opening stock 3,115,787 1,620,855

Purchases 15,794,949 16,043,442
18,910,736 17,664,297
Cost of raw cotton sold 31.1 (275,613) (227,241)
Closing stock (3,304,280) (3,115,787)
15,330,843 14,321,269
2018 2017
Note Rupees in '000
27.2 Manufacturing expenses
Salaries, wages and benefits 27.2.1 1,212,579 1,172,236

Utilities 1,580,937 1,466,278
Packing material consumed 267,012 318,423
Stores and spares consumed 454,109 344,199
Repairs and maintenance 39,286 29,916
Insurance 30,112 19,935
Rent, rates and taxes 2,297 1,960
Depreciation on operating fixed assets 13.1.1 568,734 574,536
Other 17,300 20,590
4,172,366 3,948,073
27.2.1 It includes staff retirement benefits Rs. 62.2 million (2017: Rs. 66.2 million).
2018 2017
Note Rupees in '000
28. OTHER INCOME
Income from non-financial assets:

Scrap sale 13,225 9,719
Gain on disposal of operating fixed assets - net - 2,125
Profit on trading of raw cotton / fiber 31.1 - 11,862
Duty drawback 120,253 -
Income from financial assets:
Capital gain on sale of investments 5,468 18,290

Realised exchange gain on foreign currency 4,088 -
Unrealized gain on revaluation of foreign currency loans - 3,223
Unrealized gain on revaluation of foreign currency debtors 28.1 137,734 -
Dividend income 5,521 2,955
Profit on term deposit receipts 341 643
286,630 48,817
28.1 This arises due to devaluation of Pakistani Rupee against US Dollar as at the year end which results in
exchange gain on revaluation of foreign currency debtors.

2018 2017
29. DISTRIBUTION COST Rupees in '000
Export
Ocean freight 101,063 64,048
Export development surcharge 27,544 28,597
Export charges 98,858 141,774
Local
Freight and other 91,078 84,244
Insurance 6,343 5,190
324,886 323,853
2018 2017
Note Rupees in '000
30. ADMINISTRATIVE EXPENSES
Salaries and benefits 30.1 102,822 95,847
Directors' remuneration other than meeting fees 37 33,787 35,551
Meeting fees 37 349 265
Postage and telephone 8,039 7,635
Traveling and conveyance 2,094 3,509
Vehicles running 6,977 5,242
Printing and stationery 4,936 5,175
Utilities 5,227 8,394
Entertainment 1,981 2,269
Fees and subscription 19,652 17,350
Legal and professional 860 820
Charity and donations 30.2 1,548 1,245
Auditors' remuneration 30.3 1,470 1,455
Amortization on intangible assets 14.1 4,925 1,824
Advertisement 115 208
Others 5,721 3,105
249,080 233,551
30.1 It includes staff retirement benefits of Rs. 7.82 million (2017: Rs. 11.57 million).
30.2 None of the directors and their spouses have any interest in the donees' fund. Each of these donations
does not exceed amount of Rs. 500,000.
2018 2017
Note Rupees in '000
30.3 Auditors' remuneration
Audit fee 1,100 1,100
Half year review fee 300 300
Fee for certifications 20 20
Out of pocket expenses 50 35
1,470 1,455

31. OTHER OPERATING EXPENSES
Loss on trading of raw cotton / fiber 31.1 6,408 -

Unrealized loss on other financial assets 42,694 15,521
Unrealised loss on short term borrowings 7,788 -
Loss on disposal of operating fixed assets 13,988 -
Impairment on subsidiary 15.2.3 40,000 -
Provision on receivable from subsidiary 22.2 27,943 -
Workers' Welfare Fund 8,347 8,104
219,655 74,732
31.1 (Loss) / profit on trading of raw cotton / fiber
Sale of raw cotton / fiber 269,205 239,103

Less: Cost of goods sold (275,613) (227,241)
(Loss) / profit on trading of raw cotton / fiber (6,408) 11,862
2018 2017
Rupees in '000
32. FINANCE COST
Mark-up on:
- long-term finance 62,426 67,118
- short-term borrowings 185,850 98,077
Discounting charges on letters of credit 8,488 6,493

Bank charges and commission 9,291 5,753
266,055 177,441
33. TAXATION
Current
- For the year 185,490 196,294
- Prior year - 2,026
185,490 198,320
Deferred (2,475) 78,779
183,015 277,099
33.1 The comparison of tax provisions as per financial statements and tax assessments for last three years is
as follows:
Tax Tax
Provisions Assessments
Tax Year Rupees in '000
2015 148,509 137,438

2016 133,227 133,227
2017 196,294 172,465

33.2 As per section 5A of the Income Tax Ordinance, 2001, a tax shall be imposed at a rate specified therein on
every Public Company other than scheduled bank or modaraba that derives profit for a tax year but does not
distribute a portion of its after tax profits (as per limit mentioned therein) within six months of the end of the
tax year through cash or bonus shares. As the Company has made a profit for the current year, therefore
the Company is required to pay tax on profit as mentioned earlier. However, it is expected that the
Company shall distribute profits of an amount to comply with the requirement of section 5A of the Income
Tax Ordinance, 2001, therefore, no provision for tax on undistributed profit under section 5A of the Income
Tax Ordinance, 2001 is recorded in these financial statements for the year ended June 30, 2018.
2018 2017
33.3 Relationship between tax expense and accounting profit Rupees in '000
Accounting profit before tax 1,561,596 962,934
Tax rate 30% 31%
Tax on accounting profit 468,479 298,510
Effect of:
Income chargeable to tax at reduced rates (1,648) (50,921)
Prior year charge - 2,026
Tax impact of tax credit (64,372) (38,259)
Income chargeable to tax under final tax regime (240,434) (25,282)
Due to change in tax rate 16,626 60,250
Impact of permanent differences (17,918) (452)
Impact of super tax 24,803 23,829
Others (2,521) 7,398
Tax charge as per accounts 183,015 277,099
34. EARNINGS PER SHARE - BASIC AND DILUTED

There is no dilutive effect on the basic earnings per share of the Company, which is based on:
2018 2017
Profit for the year Rupees in '000 1,378,581 685,835
Weighted average number of ordinary No. of shares 18,073,732 18,073,732

shares outstanding during the year
Earnings per share - Basic and diluted Rupees 76.28 37.95
2018 2017
35. CASH GENERATED FROM OPERATIONS Note Rupees in '000
Profit before taxation 1,561,596 962,934
Adjustments for:
Depreciation 13.1.1 598,272 603,002
Amortization 30 4,925 1,824
Provision for gratuity 8.1 70,020 73,847
Gain on disposal of other financial assets 28 (5,468) (18,290)
Unrealized loss / (gain) on revaluation of foreign currency loans 28 7,788 (3,223)
Unrealized loss on other financial assets 31 42,694 15,521
Realised exchange gain on foreign currency 28 4,088 -
Unrealized gain on revaluation of foreign currency debtors 28 137,734 -
Loss / (gain) on disposal of operating fixed assets 31 13,988 (2,125)
Impairment on subsidiary 31 40,000 -
Impairment on receivables from subsidiary 31 27,943 -
Dividend income 28 (5,521) (2,955)
Finance cost 32 266,055 177,441
Cash generated before working capital changes 2,764,114 1,807,976

Working capital changes:
(Increase) / decrease in current assets
Stores, spares and loose tools (9,641) (37,226)
Stock-in-trade (512,055) (604,529)
Trade debts (2,389,614) 127,600
Loans and advances (11,101) (11,662)
Trade deposits and short term prepayments 13,791 (6,035)
Other receivables (46,737) (23,937)
Long term deposits (705) -
Short term borrowings - -
Increase in current liability (2,956,062) (555,789)
Trade and other payables 404,177 330,242
Cash (used in) / generated from operations 212,229 1,582,429
36. CASH AND CASH EQUIVALENTS
Cash and bank balances 25 116,289 250,049

Short-term borrowings 11 (4,594,774) (3,911,125)
(4,478,485) (3,661,076)
37. REMUNERATION TO CHIEF EXECUTIVE OFFICER, DIRECTORS AND EXECUTIVES

The aggregate amounts charged in these financial statements for remuneration, including all benefits to
chief executive officer, executives and directors of the Company are given below:
2018
Particulars Chief Directors Executives
Total
Executive Executive Non-Executive
--------------------------------------------Rupees in '000--------------------------------------------
Remuneration 9,368 18,083 - 40,525 67,976

Medical 1,046 1,618 - 2,673 5,337
Utilities 1,357 2,315 - 3,725 7,397
Meeting fees 40 100 150 59 349
Retirement benefits - - - 3,487 3,487
Total 11,811 22,116 150 50,469 84,546
Number of persons 1 2 7 22 33
2017
Chief Directors Executives Total
Particulars Executive Executive Non-Executive
-------------------------------------------Rupees in '000------------------------------------------
Remuneration including benefits 10,457 19,605 - 27,893 57,955
Medical 793 1,193 - 1,729 3,715
Utilities 1,329 2,174 - 2,510 6,013
Meeting fees 40 100 90 35 265
Total 12,619 23,072 90 35,289 71,070

37.1 Company maintained cars are provided to Chief Executive Officer, directors and executives.
37.2 Comparative figures have been restated to reflect changes in the description of executives as per the
Companies Act, 2017.
38. TRANSACTIONS WITH RELATED PARTIES

The related parties comprise of subsidiaries Indus Lyallpur Limited, Indus Home Limited, Indus Home USA
Inc. and Indus Wind Energy Limited, the associates (Sunrays Textiles Mills Limited, Indus Heartland
Limited, Riaz Cotton Factory and Haji Mola Buksh Cotton Company Limited) and key management
personnel. The Company carries out transactions with related parties as per agreed terms. Remuneration of
key management personnel is disclosed in note 37 to the unconsolidated financial statements. Other
unconsolidated financial statements. Other significant transactions with related parties are as follows:
Nam e of related party Basis of relationship Nature of transactions 2018 2017

Rupees in '000
Indus Lyallpur Limited 100% owned subsidiary Conversion Cost Paid 32,128 61,979
Doubling Cost Received 3,088 -
Sale of machinery - 1,755
Indus Home Limited 100% owned subsidiary Yarn Sale 225,935 214,405
Yarn Purchase -
Conversion cost received for
services rendered 391,094 273,504
Doubling cost received 48 1,183
Indus Wind Energy Limited 100% owned subsidiary Payment for expenses of company 17,224 -
Advance against issue of shares - 6,957
Sunrays Textile Mills Limited Associate on common Sale of yarn - 40,175

directorship and
0.99% holding
Name of related party Basis of relationship Nature of transactions 2018 2017

Rupees in '000
Indus Lyallpur Limited 100% owned subsidiary Payable to related party 3,236 1,111
Sunrays Textile Mills Limited Associate on common Payable to related party 125 260
directorship and
0.99% holding
Riaz Cotton Factory Associate on common Payable to related party 1,917 1,917
directorship
Haji Mola Buksh Associate on common Payable to related party 1,253 1,253
Cotton Factory directorship
39. FINANCIAL RISK MANAGEMENT

The Board of Directors has overall responsibility for the establishment and oversight of the Company's
financial risk management. The responsibility includes developing and monitoring the Company's risk
management policies. To assist the Board in discharging its oversight responsibility, management has
been made responsible for identifying, monitoring and managing the Company's financial risk exposures.

The Company’s principal financial liabilities comprise long-term financing, short-term borrowings, trade and
other payables, interest/dividend payable and financial guarantee contracts. The main purpose of these
financial liabilities is to raise finance for the Company’s operations. The Company has loans and advances,
trade and other receivables, cash and bank balances and deposits that arise directly from its operations.
The Company also holds long-term and short term investments.
The Company’s activities expose it to a variety of financial risks: market risk (including currency risk, fair
value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk.
The Company's exposure to the risks associated with the financial instruments and the risk management
policies and procedures are summarized as follows:
39.1 Credit risk and concentration of credit risk

Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause
the other party to incur a financial loss, without taking into account the fair value of any collateral.
Concentration of credit risk arises when a number of counter parties are engaged in similar business
activities or have similar economic features that would cause their ability to meet contractual obligations to
be similarly affected by changes in economic, political or other conditions. Concentrations of credit risk
indicate the relative sensitivity of the Company's performance to developments affecting a particular
industry. The Company does not have any significant exposure to customers from any single country or
single customer.
Credit risk of the Company arises principally from trade debts, loans and advances, other financial assets
(mutual funds) and bank balances. The carrying amount of financial assets represents the maximum credit
exposure. The maximum exposure to credit risk at the reporting date is as follows:
2018 2017
Rupees in '000
Long-term deposits 4,810 4,105

Trade debts 3,533,973 1,286,181
Loans 30,179 21,115
Other receivables 63,547 44,753
Other financial assets 232,428 457,372
Bank balances 109,951 243,958
3,976,465 2,059,061
The trade debts are due from foreign and local customers for export and local sales respectively. Trade
debts from foreign customers are secured against letters of credit. Management assesses the credit quality
of local and foreign customers, taking into account their financial position, past experience and other
factors. Though there are few past due trade debts, however, such are not impaired as per management
assessment.

Credit risk related to equity investments and cash deposits
The Company limits its exposure to credit risk of investments by only investing in listed securities of highly reputed
companies/mutual funds having good stock exchange rating. Credit risk from balances with banks and financial institutions is
managed by Finance Director in accordance with the Company’s policy.
The credit risk on liquid funds (bank balances is limited because the counter parties are banks with a reasonably high credit
rating. The names and credit rating of major banks where the Company maintains its bank balances are as follows:
Name of bank Rating Credit rating

Short-term
agency Long-term
Allied Bank Limited PACRA AAA A1+

Askari Bank Limited PACRA AA+ A1+
Bank Alfalah Limited JCR-VIS AA+ A1+
Bank Islami Pakistan Limited PACRA A+ A1
Bank Al-Habib Limited PACRA AA+ A1+
Dubai Islamic Bank (Pakistan) Limited JCR-VIS AA- A1
Faysal Bank Limited JCR-VIS AA A1+
Habib Bank Limited JCR-VIS AAA A1+
Habib Metropolitan Bank Limited PACRA AA+ A1+
Industrial and Commercial Bank of China Limited Moody's A1 P1
J.S Bank Limited PACRA AA- A1+
Meezan Bank Limited JCR-VIS AA+ A1+
MCB Bank Limited PACRA AAA A1+
National Bank of Pakistan JCR-VIS AAA A1+
Soneri Bank Limited PACRA AA- A1+
Standard Chartered Bank (Pakistan) Limited PACRA AAA A1+
The Bank Of Punjab PACRA AA A1+
United Bank Limited JCR-VIS AAA A1+
39.2 Liquidity risk management

Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities that
are settled by delivering cash or another financial asset. Liquidity risk arises because of the possibility that the Company could
be required to pay its liabilities earlier than expected or would have difficulty in raising funds to meet commitments associated
with financial liabilities as they fall due. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will
always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring
unacceptable losses or risking damage to the Company's reputation. The Company ensures that it has sufficient cash on
demand to meet expected working capital requirements. The following are the contractual maturities of financial liabilities,
including interest payments and excluding the impact of netting agreements:
39.2.1 Liquidity and interest risk table

The following tables detail the Company’s remaining contractual maturity for its non-derivative financial liabilities. The tables have
been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can
be required to pay.
Carrying Contractual Less than 1 1 to 3 3 months to More than 5

1-5 years
Values Cash Flows month months 1 year years
----------------------------------------------------------Rupees in '000'------------------------------------------------------
Trade and other payables 843,639 843,639 - 843,639 - - -

Long-term financing 1,677,084 1,756,476 - - 353,889 1,402,587 -
Short-term borrowings 4,594,774 4,594,774 - 3,544,375 1,050,399 - -
Interest / mark-up payable 44,631 44,631 - 44,631 - - -
2018 7,171,208 7,250,600 - 4,432,645 1,404,288 1,402,587 -
Carrying Contractual Less than 1 1 to 3 3 months to More than 5

1-5 years
Values Cash Flows month months 1 year years
----------------------------------------------------------Rupees in '000'------------------------------------------------------
Trade and other payables 615,405 615,405 - 615,405 - - -

Long-term financing 1,477,539 1,540,421 - - 429,503 1,110,918 -
Short-term borrowings 3,911,125 3,911,125 - 2,561,920 1,349,205 - -
Interest / mark-up payable 41,436 41,436 - 41,436 - - -
2017 6,051,831 6,114,713 - 3,218,761 1,778,708 1,110,918 -
The effective rate of interests on non-derivative financial liabilities are disclosed in respective notes.

The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value
hierarchy :
----------------------------------------------------------------- June 30, 2018 ------------------------------------------------------------------
Carrying am ount Fair Value Hierarchy
Fair value Loans and Am ortized Total Level 1 Level 2 Level 3 Total
through profit advances cost
and loss account -
held-for-trading
----------------------------------------------------------------- (Rupees in '000) ----------------------------------------------------------------
Financial assets measured
at fair value
Other financial assets 315,213 - - 315,213 315,213 - - 315,213
Financial assets not measured at fair

value
------------------------------- June 30, 2018 -----------------------------
------------------------------ (Rupees in '000) ----------------------------
Long-term deposits - 4,810 - 4,810

Trade debts - 3,533,973 - 3,533,973
Loans - 30,179 - 30,179
Trade deposits - 1,577 - 1,577
Other receivables - 63,547 - 63,547
Bank balances - 109,951 - 109,951
Cash in hand - 6,338 - 6,338
- 3,750,375 - 3,750,375

through profit advances cost
and loss account -
held-for-trading
------------------------------------------------------------------ June 30, 2018 -------------------------------------------------------------------
------------------------------------------------------------------ (Rupees in '000) ----------------------------------------------------------------
Financial liabilities not measured
at fair value
-------------------------------- June 30, 2018 -------------------------------
------------------------------ (Rupees in '000) -----------------------------
Long-term financing - - 1,677,084 1,677,084
Trade and other payables - - 843,639 843,639
Unclaimed dividends - - 11,080 11,080
Short-term borrowings - - 4,594,774 4,594,774
Interest / mark-up payable - - 44,631 44,631
- - 7,171,208 7,171,208
------------------------------------------------------------------ June 30, 2017 ------------------------------------------------------------------

through profit & advances cost
loss account -
held-for-trading
----------------------------------------------------------------- (Rupees in '000) ----------------------------------------------------------------
Financial assets measured
at fair value
Other financial assets 584,330 - - 584,330 584,330 - - 584,330
Financial assets not measured

------------------------------- June 30, 2017 -----------------------------
at fair value
------------------------------ (Rupees in '000) ---------------------------
Long-term deposits - 4,105 - 4,105

Trade debts - 1,286,181 - 1,286,181
Loans - 21,115 - 21,115
Bank balances - 243,958 - 243,958
Cash in hand - 6,091 - 6,091
- 1,607,780 - 1,607,780
Financial liabilities not measured -------------------------------- June 30, 2017 ----------------------------

at fair value ------------------------------- (Rupees in '000) ---------------------------
Long-term financing - - 1,477,539 1,477,539
Trade and other payables - - 615,405 615,405
Unclaimed dividends - - 6,326 6,326
- - 6,051,831 6,051,831

39.3 Market risk management
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and
equity prices will affect the Company's income or the value of its holdings of financial instruments. The
objective of market risk management is to manage and control market risk exposures within acceptable
parameters while optimizing returns.
39.3.1 Interest rate risk management
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market interest rates. Majority of the interest rate risk arises from long and short-
term borrowings from financial institutions. At the balance sheet date the interest rate risk profile of the
Company’s interest-bearing financial instruments is:
Carrying amount
2018 2017
Fixed rate instruments Rupees in '000
Financial assets 12,786 12,807

Financial liabilities 1,392,209 850,521
Variable rate instruments

Financial liabilities
- KIBOR based 3,829,250 3,188,938

- LIBOR based 1,050,399 1,349,205
Fair value sensitivity analysis for fixed rate instruments
The Company does not account for any fixed rate financial assets and liabilities at fair value through profit or
loss - held-for-trading, therefore, a change in interest rate at the reporting date would not affect profit and
loss account.
Cash flow sensitivity analysis for variable rate instruments
If interest rates had been 50 basis points higher / lower and all other variables were held constant, the
Company’s profit before tax for the year ended June 30, 2018 would decrease / increase by Rs. 24.4 million
(2017: Rs. 22.69 million) determined on the outstanding balance at year end. This is mainly attributable to
the Company’s exposure to interest rates on its variable rate borrowings.
39.3.2 Foreign exchange risk management
Exposure to currency risk 2018 2017

Rupees US Dollar Rupees US Dollar
Currency in '000
Trade debts 2,663,225 21,938 440,281 4,193

Bank Balances 19,894 164 16,313 155
Foreign currency loans (1,050,399) (8,652) (1,349,205) (12,850)
1,632,720 13,450 (892,611) (8,502)
2018 2017
Rupees
Average rate 113.15 104.73
Balance sheet date rate 121.40 105.00

Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in foreign exchange rates. Currency risk arises mainly where receivables and payables
exist due to transactions entered into foreign currencies. The Company is exposed to foreign currency risk
on sales, purchases and borrowings, which, are entered in a currency other than Pak Rupees.
At June 30, 2018, if the Rupee had weakened / strengthened by 5% against the US dollar with all other
variables held constant, profit before tax for the year would have been higher / lower by Rs. 81.64 million
(2017: higher / lower by Rs. 45.45 million) determined on the outstanding balance at year end. Profit / (loss)
is sensitive to movement in Rupee / foreign currency exchange rates in 2018 than 2017 because of high
fluctuation in foreign currency exchange rates.
39.3.3 Equity price risk management
The Company’s listed and unlisted equity securities are susceptible to market price risk arising from
uncertainties about future values of the investment securities. The Company manages the equity price risk
through diversification and placing limits on individual and total equity instruments. Reports on the equity
portfolio are submitted to the Company’s senior management on a regular basis. The Company’s Board of
Directors reviews and approves all equity investment decisions.
At the reporting date, the Company has exposure of Rs.13.476 million (2017: Rs. 13.476 million) to listed
equity securities of an associate which is held for strategic rather than trading purpose.
At the balance sheet date, the Company have exposure of Rs. 3,676 million (2017: Rs. 3,716 million) to
unlisted equity securities of subsidiaries which are held for strategic rather than trading purpose. At the
balance sheet date, the exposure to listed equity securities at fair value was Rs. 315.213 million (2017:
Rs.584.330 million). A decrease / increase of 5% in market prices would have an impact of approximately
Rs. 15.761 million (2017: Rs. 29.217 million) on profit and loss for the year determined based on market
value of investments at year end.
39.4 Financial instruments by category Loans & Fair value Total

receivables through profit
& loss
account - held-
-- - - - - - - - - - - - - - - Rupees in '000 - - - - - - - - - - -
Financial assets
- June 30, 2018
Long-term deposits 4,810 - 4,810

Trade debts 3,533,973 - 3,533,973
Loans 30,179 - 30,179
Trade deposits 1,577 - 1,577
Other receivables 63,547 - 63,547
Other financial assets - 315,213 315,213
Bank balances 109,951 - 109,951
Cash in hand 6,338 - 6,338
3,750,375 315,213 4,065,588

Loans & Fair value Total

& loss
account - held-
for-trading
Financial assets -- - - - - - - - - - - - - - - Rupees in '000 - - - - - - - - - - -

- June 30, 2017
Trade debts 1,286,181 - 1,286,181
Loans 21,115 - 21,115
Bank balances 243,958 - 243,958
Cash in hand 6,091 - 6,091
1,607,780 584,330 2,192,110
Financial
liabilities
measured at Total
amortized
cost
---------------Rupees in '000 -------------
- June 30, 2018
Long-term financing 1,677,084 1,677,084
Short-term borrowings 4,594,774 4,594,774
Interest / mark-up payable 44,631 44,631
7,171,208 7,171,208
Financial
liabilities
Total
measured at
amortized
cost
Financial liabilities ---------------Rupees in '000 -------------
- June 30, 2017

6,051,831 6,051,831

39.5 Fair value and categories of financial instruments
Fair value is the price that would be received to sell an asset or paid or transfer a liability in an orderly
transaction between market participants and measurement date. Consequently, differences can arise
between carrying values and the fair value estimates.
Underlying the definition of fair value is the presumption that the Company is a going concern without any
intention or requirement to curtail materially the scale of its operations or to undertake a transaction on
adverse terms.
The fair value of financial assets and liabilities traded in active markets i.e. listed equity shares are based
on the quoted market prices at the close of trading on the reporting date. The quoted market price used for
financial assets held by the Company is current bid price.
A financial instrument is regarded as quoted in an active market if quoted prices are readily and regularly
available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those
prices represent actual and regularly occurring market transactions on an arm’s length basis.
IFRS 13, 'Fair Value Measurements' requires the Company to classify fair value measurements using a fair
value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value
hierarchy has the following levels:
- Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).
- Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either
directly (that is, as prices) or indirectly (that is, derived from prices) (level 2).
- Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs)
(level 3).

40. CAPITAL RISK MANAGEMENT

The objective of the Company when managing capital, i.e., its shareholders' equity, is to safeguard its
ability to continue as a going concern so that it can continue to provide returns for shareholders and
benefits for other stakeholders; and to maintain a strong capital base to support the sustained development
of its businesses.
The Company manages its capital structure by monitoring return on net assets and makes adjustments to
it in the light of changes in economic conditions. In order to maintain or adjust the capital structure, the
Company may adjust the amount of dividend paid to shareholders or issue new shares.
Consistent with others in the industry, the Company monitors capital on the basis of the gearing ratio. This
ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings (including
‘current and non-current borrowings’ as shown in the balance sheet) less cash and cash equivalents. Total
capital is calculated as ‘equity’ as shown in the balance sheet plus net debt.
The gearing ratios at June 30, 2018 and 2017 were as follows:
2018 2017
Rupees in '000
Total borrowings (note 7 & 11) 6,271,858 5,388,664

Less: cash and bank balances (note 25) (116,289) (250,049)
Net debt 6,155,569 5,138,615

Total equity 11,070,683 9,923,532
Total capital 17,226,252 15,062,147
Gearing ratio 36% 34%
There is no significant change in the gearing ratio of the Company as compared to the last year.
41. CAPACITY AND PRODUCTION

Spinning units 2018 2017
Total number of spindles installed 178,896 178,896
Total number of spindles worked per annum (average) 176,910 177,210
Number of shifts worked per day 3 3
Installed capacity of yarn converted into

20 counts based on 365 days (lbs.) 127,255,973 127,275,682
Actual production for the year after conversion into 20 counts (lbs.) 110,875,158 114,388,159
Ginning units
Installed capacity to produce cotton bales 72,999 72,999
Actual production of cotton bales - 11,918
Number of shifts - 1
Capacity attained in (%) - 17%

It is difficult to describe precisely the production capacity in spinning unit since it fluctuates widely
depending on various factors such as count of yarn spun, spindles speed and twist etc. It also varies
according to the pattern of production adopted in a particular year.
42. SEGMENT REPORTING
The Company’s core business is manufacturing and sale of yarn and it generates more than 90% of its
revenue and profit from the production and sale of yarn. Decision making process is centralized at head
office led by Chief Executive Officer who continuously is involved in day to day operations and regularly
reviews operating results and assesses its performance and makes necessary decisions about resources
to be allocated to the segments. Currently the Company has three yarn manufacturing units at Hyderabad,
Karachi and Muzaffargarh. Owing to the similarity in nature of the products and services, nature of the
production processes, type or class of customers for the products and services, the methods used to
distribute the products and the nature of the regulatory environment, all the yarn producing units are
aggregated into a single operating segment and the Company's performance is evaluated by the
management on an overall basis, therefore these operational segments by location are not separately
reportable segments.
43. NUMBER OF EMPLOYEES Number of employees
2018 2017
Average number of employees during the year 2,447 2,588
Number of employees as at June 30 2,553 2,669
Number of factory employees as at June 30 2,427 2,549
43.1 Daily wage employees are not included in the above number of employees.
44. SUBSEQUENT EVENT
The Board of Directors proposed a final dividend for the year ended June 30, 2018 of Rs. 16 per share
(2017: Rs. 13 per share) at their meeting held on October 05, 2018 for approval of members at the Annual
General Meeting. These financial statements do not reflect this dividend payable which will be accounted for
45. DATE OF AUTHORIZATION FOR ISSUE
These unconsolidated financial statements have been authorized for issue on October 05,2018 by the
Board of Directors of the Company.
46. CORRESPONDING FIGURES

Corresponding figures have been rearranged or reclassified, where necessary, for the purpose of better
presentation. No significant rearrangement or reclassification was made in these financial statements
during the current year except that (i) unclaimed dividend as at June 30, 2017 amounting to Rs. 6.326
million previously disclosed under 'Trade and other payables' are now disclosed on the face of the
statement of financial position to comply with requirement of Fourth Schedule to the Companies Act, 2017.
47. GENERAL
Figures have been rounded off to the nearest rupees in thousand.


Consolidated Annual Report

2018

CONTENTS
Consolidated key operating and financial results 78
Independent Auditor’s Report to the Members 79
Consolidated Statement of Financial Position 83
Consolidated Statement of Profit and Loss 84
Consolidated Statement of other comprehensive income 85
Consolidated Statement of changes in equity 86
Consolidated Cash flow statement 87
Notes to the financial statement 88

Consolidated key opera�ng and financial results
2013 2014 2015 2016 2017 2018

Opera�ng data
Turn over 20,375,904 24,301,493 26,812,047 25,111,229 27,818,111 30,877,734
Less : commission (353,707) (267,068) (251,980) (180,566) (244,919) (247,448)
Sales ( net ) 20,022,197 24,034,425 26,560,067 24,930,663 27,573,192 30,630,286
Gross profit 3,630,687 2,487,947 2,184,056 1,937,179 2,641,910 3,013,451
Profit before tax 2,523,383 1,866,427 474,828 666,821 1,352,727 2,008,520
Profit a�er tax 2,547,734 1,996,643 299,887 449,069 1,035,345 1,781,697
Financial data
Gross assets 12,698,532 20,272,036 19,391,820 20,984,661 21,984,382 25,641,644
Return on equity 28.51% 18.75% 2.81% 4.04% 8.65% 13.19%
Current assets 5,826,529 9,316,161 8,264,447 10,025,542 11,487,926 14,938,598
Shareholders equity 8,936,904 10,646,575 10,674,211 11,115,770 11,966,431 13,509,269
Long term debts and deferred liabili�es 808,605 2,395,176 1,843,852 1,737,544 1,694,447 2,376,990
Current liabili�es 2,950,413 7,227,675 6,873,757 8,131,347 8,323,504 9,755,385
Key ra�os
Gross profit ra�o 18.13% 10.35% 8.22% 7.77% 9.58% 9.84%
Net profit 12.72% 8.31% 1.13% 1.80% 3.75% 5.82%
Debt / equity ra�o 12 : 88 16 : 84 13 : 87 12 : 88 11 : 89 12 : 88
Current ra�o 1.97 1.29 1.20 1.23 1.38 1.23
Earning per share ( basic and diluted ) 140.96 110.47 16.59 24.85 57.28 98.58
Dividend ( percentage )
- Cash 100% Int 150% Int 150% Int 50% Final 180% Final -
- Stock - - - - - -
- Specie dividend 100 : 09 - - - - -
Sta�s�cs
Produc�on ( tons ) 52,894 63,821 68,361 69,924 70,389 68,759

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF

Report on the Audit of the Consolidated Financial Statements
Opinion
We have audited the annexed consolidated financial statements of Indus Dyeing & Manufacturing Company
Limited (the Holding Company) and its subsidiarycompanies (together the Group) which comprise the
consolidated statement of financial position as at June 30, 2018, and the consolidated statement of profitand
loss, the consolidated statement of comprehensive income, the consolidated statement of changes in equity,
and the consolidated cash flow statement for the year then ended, and notes to the consolidated financial
statements, including a summary of significant accounting policies and other explanatory information
(collectively referred as consolidated financial statements).
In our opinion, theconsolidated financial statementsgive a true and fair view of theconsolidated financial
position of the Group as at June 30, 2018and of its consolidated financial performance and its consolidated
cash flows for the year then ended in accordance with the accounting and reporting standards as applicable
in Pakistan.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs) as applicable in
Pakistan. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for
the Audit of the Financial Statements section of our report. We are independent of the Group in accordance
with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants
as adopted by the Institute of Chartered Accountants of Pakistan (the Code)and we have fulfilled our other
ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit
of the consolidatedfinancial statements of the current period. These matters were addressed in the context
of our audit of the consolidatedfinancial statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.

Following are the key audit matters:

Key audit matter How our audit addressed the key audit matter
1. Revenue Recognition
Revenue recognition policy has been explained in notes Our audit procedures to assess the recognition of revenue,
4.14, and the related amounts of revenue recognized amongst others, included the following:
during the year are disclosed in note 27 to the
consolidatedfinancial statements. • obtained understanding and performed testingon design and
implementation and operating effectiveness of controls
The Group generates revenue from sale of goods to designed to ensure that revenue is recognized in the
domestic as well as export customers. appropriate accounting period and based on dispatch of
goods to customers in case of local customers and on export
Revenue from the local (including indirect exports) and of goods to customers outside Pakistan as evidenced by
export sales is recognized when significant risks and respective bills of lading;
rewards of ownership have been transferred to the
customer. • assessed appropriateness of the Group’s accounting policies
for revenue recognition in light of applicable accounting and
We identified revenue recognition as key audit matter reporting standards;
since it is one of the key performance indicators of the
Group and because of the potential risk that revenue • checked, on a sample basis, specific local and export
transactions may not have been recognized based on saletransactions with underlying documentation to assess
transfer of risk and rewards to the customers in line whether revenue has been recognized in the
with the accounting policy adopted and may not have correctaccounting period; andchecked on a sample basis
been recognized in the appropriate period. whether the recorded local and export sales transactions
were based on actual dispatch of goods or on exports,
substantiated by supporting documents; and
• Tested timeliness of revenue recognition by comparing

individual sales transactions before and after the year end
to underlying documents.
2. Valuation of stock in trade
Stock-in-trade has been valued following an accounting Our audit procedures to address the valuation of stock-in-trade,
policy as stated in note 4.8 and the related value of included the following:
stock-in-trade are disclosed in note 19 to the
consolidatedfinancial statements. Stock-in-trade • obtained an understanding of mechanism of recording
forms material part of the Group’s assets comprising of purchases and valuation of stock-in-trade;
around 28.79% of total assets.
• tested on a sample basis purchases with underlying

The valuation of finished goods within stock-in-trade at supporting documents;
cost has different components, which includes
judgment in relation to the allocation of overheads
costs, which are incurred in bringing the finished goods • verified the calculations of the actual overhead costs and
to its present location and condition. Judgmentsare checked allocation of labor and overhead costs to the finished
also involved in determining the net realizable value goods;
(estimated selling price in the ordinary course of
business less estimated cost of completion and • obtained an understanding of management’s process for
estimated costs necessary to make the sale) of stock- determiningthe net realizable value and checked:
in-trade items in line with accounting policy.
• future selling prices by preforming a review of sales close
Due to the above factors, we have considered the to and subsequent to the year-end; and
valuation of stock in trade as key audit matter.
• determination of cost necessary to make the sales
• checked the calculations of net realizable value of itemized

list of stock-in-trade, on selected sample and compared the
net realizable value with the cost to ensure that valuation of
stock-in-trade is in line with the accounting policy.

Information Other than the ConsolidatedFinancial Statements and Auditor’s Report Thereon
Management is responsible for the other information. The other information comprises the information
included in annual report, but does not include the financial statements and our auditor’s report thereon.
Our opinion on the consolidatedfinancial statements does not cover the other information and we do not
express any form of assurance or conclusion thereon.
In connection with our audit of the consolidatedfinancial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the
consolidatedfinancial statements or our knowledge obtained in the audit or otherwise appears to be
materially misstated.
When we read the annual report, If we conclude that there is a material misstatement of therein, we are
required to communicate the matter to those charged with governance and take necessary actions as
required under law. We have nothing to report in this regard.
Responsibilities of Management and Board of Directors for the Financial Statements
Management is responsible for the preparation and fair presentation of theconsolidated financial statements
in accordance with the accounting and reporting standards as applicable in Pakistan and the requirements of
Companies Act, 2017 (XIX of 2017) and for such internal control as management determines is necessary to
enable the preparation of consolidatedfinancial statements that are free from material misstatement, whether
due to fraud or error.
In preparing the consolidatedfinancial statements, management is responsible for assessing the Group’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless management either intends to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Board of Directors are responsible for overseeing the Group’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidatedfinancial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs as applicable in Pakistan will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of these consolidated financial statements.
As part of an audit in accordance with ISAs as applicable in Pakistan, we exercise professional judgment and
maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the consolidatedfinancial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we

conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the
related disclosures in the consolidatedfinancial statements or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor’s report. However, future events or conditions may cause the Group to cease to continue as a
going concern.
• Evaluate the overall presentation, structure and content of the consolidatedfinancial statements,
including the disclosures, and whether the consolidatedfinancial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the consolidated financial statements. We are
responsible for the direction, supervision and performance of the group audit. We remain solely
responsible for our audit opinion.
We communicate with the board of directors regarding, among other matters, the planned scope and timing
of the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the board of directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters
that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the board of directors, we determine those matters that were of most
significance in the audit of the consolidatedfinancial statements of the current period and are therefore the
key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not
be communicated in our report because the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.
The engagement partner on the audit resulting in this independent auditor’s report is Naresh Kumar.

Place: Karachi
32
CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT JUNE 30, 2018
2018 2017 2018 2017

Note Rupees in '000 Note Rupees in '000
EQUITY AND LIABILITIES ASSETS

Share capital and reserves Non current assets
Authorized share capital
45,000,000 ordinary shares
of Rs. 10 each 450,000 450,000 Property, plant and 14 10,638,926 10,431,373
equipment
Issued, subscribed and
paid-up capital 6 180,737 180,737
Intangible assets 15 21,861 27,759
Reserves 7 7,000,157 6,999,444

Long-term investments 16 26,784 22,567
Unappropriated profit 6,328,375 4,786,250

Long-term deposits 17 15,475 14,757
13,509,269 11,966,431 10,703,046 10,496,456
Non current liabilities Current assets
Long-term financing 8 1,813,143 1,193,821

Stores, spares
Deferred liabilities 9 563,847 500,626 and loose tools 18 578,782 527,318
2,376,990 1,694,447 Stock-in-trade 19 7,384,547 6,550,142
Trade debts 20 5,194,308 2,020,014

Current liabilities
Loans and advances 21 256,670 228,353
Trade and other payables 10 2,742,665 2,124,215 Trade deposits and

short-term prepayments 22 4,374 28,879
Unclaimed dividend 11,080 6,326
Other receivables 23 183,261 98,705
Interest / mark-up payable 11 65,406 53,005
Other financial assets 24 317,838 994,123
Short-term borrowings 12 6,541,667 5,691,516
Tax refundable 25 746,122 754,180
Current portion of
long-term financing 8 394,567 448,442 Cash and bank balances 26 272,696 286,212
9,755,385 8,323,504
Contingencies and 14,938,598 11,487,926
commitments 13
25,641,644 21,984,382 25,641,644 21,984,382
The annexed notes from 1 to 48 form an integral part of these consolidated financial statements.


83
CONSOLIDATED STATEMENT OF PROFIT AND LOSS

2018 2017
Note Rupees in '000
Sales - net 27 30,630,286 27,573,192
Cost of goods sold 28 (27,616,835) (24,931,282)
Gross profit 3,013,451 2,641,910
Other income 29 654,869 124,080
3,668,320 2,765,990
Distribution cost 30 (631,276) (604,382)
Administrative expenses 31 (449,745) (417,385)
Other operating expenses 32 (211,136) (138,141)
Finance cost 33 (372,135) (254,998)
(1,664,292) (1,414,906)
2,004,028 1,351,084
Share of profit from associate - net of tax 16.1 4,492 1,643
Profit before taxation 2,008,520 1,352,727
Taxation 34 (226,823) (317,382)
Profit for the year - attributable to ordinary share holders of the

1,781,697 1,035,345
Holding Company
Earnings per share - basic and diluted 35 98.58 57.28

84
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

2018 2017
Rupees in '000
Profit for the year 1,781,697 1,035,345
Items that may be reclassified subsequently to profit and loss
Exchange loss on translation of balances of foreign subsidiary 713 (88)
Items that will not be reclassified subsequently to profit and loss
Remeasurement of defined benefit obligation - net of tax (4,614) (3,858)
Total comprehensive income for the year - attributable to

1,777,796 1,031,399
ordinary share holders of the Holding Company


85
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
R e s e rv e s
C a pit a l R e v e nue
Issued,
Exchange
subscribed Share Merger General
translation Unappropri Total
and paid premium reserve reserve
reserve ated profit
up capital
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - R upe e s in '0 0 0 ' - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
B a la nc e a t J une 3 0 , 2 0 16 180,737 10,920 11,512 (468) 5,000,000 5,913,069 11,115,770
T o t a l c o m pre he ns iv e inc o m e f o r t he ye a r
P ro fit fo r the year - - - - - 1,035,345 1,035,345
Exchange loss on translation of balances of foreign subsidiary - - - (88) - - (88)
Remeasurement o f defined benefit o bligatio n -net o f - - - - - (3,858) (3,858)

tax
To tal co mprehensive inco me fo r the year - - - (88) - 1,031,487 1,031,399
Transfer to general reserve - - - - 1,977,568 (1,977,568) -
Transactions with owners of the Holding Company

re c o rde d dire c t ly in e quit y
Final cash dividend fo r the year ended

June 30, 2016 @ Rs. 5 per share - - - - - (90,369) (90,369)
Interim cash dividend fo r the perio d ended

September 30, 2016 @ Rs. 5 per share - - - - - (90,369) (90,369)
B a la nc e a t J une 3 0 , 2 0 17 180,737 10,920 11,512 (556) 6,977,568 4,786,250 11,966,431
T o t a l c o m pre he ns iv e inc o m e f o r t he ye a r
P ro fit fo r the year - - - - - 1,781,697 1,781,697
Exchange lo ss o n translatio n o f balances

o f fo reign subsidiary - - - 713 - - 713
Remeasurement o f defined benefit o bligatio n -

net o f tax - - - - - (4,614) (4,614)
To tal co mprehensive inco me fo r the year - - - 713 - 1,777,083 1,777,796
T ra ns a c t io ns wit h o wne rs o f t he H o lding

C o m pa ny re c o rde d dire c t ly in e quit y
Final cash dividend fo r the year ended

June 30, 2017 @ Rs. 13 per share - - - - - (234,958) (234,958)
B a la nc e a t J une 3 0 , 2 0 18 18 0 ,7 3 7 10 ,9 2 0 11,5 12 15 7 6,977,568 6,328,375 13,509,269
The annexed no tes fro m 1to 48 fo rm an integral part o f these co nso lidated financial statements.

36
CONSOLIDATED CASH FLOW STATEMENT

2018 2017
Note Rupees in '000
A. CASH FLOWS FROM OPERATING ACTIVITIES
Cash generated from operations 36 89,736 1,961,485

Taxes paid - net (228,248) (411,807)
Finance cost paid (359,734) (235,565)
Gratuity paid (77,117) (72,308)
Deposits refunded (718) -
Net cash generated from / (used in) operating activities (576,081) 1,241,805
B. CASH FLOWS FROM INVESTING ACTIVITIES
Payment for purchase of property, plant and equipment (1,298,621) (660,652)

Proceeds from disposal of property, plant and equipment 14.2 44,191 53,747
Payment for purchase of other financial assets 633,594 (332,900)
Dividend received 5,796 2,268
Net cash used in investing activities (615,040) (937,537)
C. CASH FLOWS FROM FINANCING ACTIVITIES
Long term finance obtained / (repaid) -net 565,447 (35,415)

Dividend paid (230,204) (200,085)
Net cash generated from / (used in) financing activities 335,243 (235,500)
Net decrease in cash and cash equivalents (A+B+C) (855,878) 68,768
Cash and cash equivalents at beginning of the year (5,405,304) (5,477,806)
Effect of exchange rate changes on cash and cash equivalent (7,788) 3,734
Cash and cash equivalents at end of the year 37 (6,268,971) (5,405,304)


37
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. THE GROUP AND ITS OPERATIONS
1.1 The "Group" consists of Indus Dyeing & Manufacturing Company Limited (the Holding
Company), its subsidiaries and associates.
1.1.1 Holding Company
Indus Dyeing & Manufacturing Company Limited (the Holding Company) was incorporated in
Pakistan on July 23, 1957 as a public limited company under the repealed Companies Act
1913 (subsequently replaced by repealed Companies Ordinance, 1984 and now Companies
Act, 2017). Registered office of the Holding Company is situated at Office No. 508, 5th floor,
Beaumont Plaza, Civil Lines, Karachi. The Holding Company is listed on Pakistan Stock
Exchange Limited. The principal activity of the Holding Company is manufacturing and sale of
yarn. The manufacturing facilities of the Holding Company are located in Karachi, Hyderabad
and Muzaffargarh. The addresses of these facilities are as follows:
Manufacturing Unit Address
Hyderabad P-1, S.I.T.E, Hyderabad, Sindh

Karachi Plot Number 03 & 07, Sector 25, Korangi Industrial Area, Karachi.
Muzaffargarh Muzaffargarh, Bagga Sher, District Multan
Faisalabad Chak # 61 R/B, Mouza Bedianwala, Tehsil Jaranwala at 38-Km,
Shaikhupura road, District Faisalabad
Lahore Raiwand Road, Manga Mandi, Lahore
1.1.2 Subsidiary companies
Indus Lyallpur Limited - 100% owned

Indus Lyallpur Limited ( ILL ) is an unlisted public company limited by shares, incorporated in
Pakistan on April 25, 1992 under the Repealed Companies Ordinance, 1984 (now Companies
Act, 2017). Principal business of the ILL is manufacturing and sale of yarn. Its manufacturing
facility is located at 38th Kilometer, Shaikhupura road, District Faisalabad in the province of
Punjab. Registered office of the ILL is situated at Office No. 508, 5th floor, Beaumont Plaza,
Civile Lines , Karachi
Indus Home Limited - 100% owned
Indus Home Limited ( IHL ) was incorporated in Pakistan as a public limited company on May
18, 2006 under the Repealed Companies Ordinance, 1984 (now Companies Act, 2017). The
registered office of the company is located at 174 Abu Bakar Block, New Garden Town,
Lahore. The principal activities of the IHL are to manufacture and export the greige and finished
terry cloth and other textile products. The manufacturing facility of the Company is located at
Manga Mandi, Lahore. On November 21, 2013, the Holding Company acquired 75 million
shares of Indus Home Limited from WestPoint Pakistan LLC for an aggregate purchase
consideration of USD 12 million. As a result of the acquisition, the Holding Company acquired
controlling interest in Indus Home Limited by way of 100% ownership.
38
Indus Home USA Inc. (100% owned by Indus Home Limited)
Indus Home USA Inc. was established during the year ended June 30, 2014. Its principal
business activity is to act as commission agent to generate sales order in textile sector.
Indus Wind Energy Limited - 100% owned
Indus Wind Energy Limited is incorporated in Pakistan as a public unlisted company on
February 21, 2015. Its principal business activity is to generate and sale electricity to the national grid.
1.1.3 Sunrays Textile Mills Limited - Associate
Sunrays Textile Mills Limited was incorporated in Pakistan on August 27, 1987 as a public
limited company under the Companies Ordinance, 1984. Its shares are quoted on Pakistan
Stock Exchange Limited. The Company is principally engaged in trade, manufacture and sale
of yarn. The Company is also operating a ginning unit and an ice factory on leasing
arrangements. The registered office of the Company is situated at Karachi. The mill is located
at District Muzaffargarh, Dera Ghazi Khan Division, in the province of Punjab. The Holding
Company has 0.99% shareholding and voting rights in the Company and it is regarded as an
associate due to common directorship.
1.2 Significant transactions and events affecting the Group’s financial position and
performance
Following are most significant events that had impacted considerably the financial position and
financial performance of the Group.
- Due to devaluation of Pakistani Rupee during the year ended June 30, 2018, the Group's
income from exchange gain amounted to Rs.167.722 million with respect to transactions
in foreign currencies and for receivables denominated in US Dollar (note 29)
- During the year the Group has received duty drawback of taxes of Rs. 120.25 million, on
export sales, as per duty drawback of taxes order 2016-2017 and 2017-2018.
- After applicability of the Companies Act, 2017, certain amounts reported for the previous
period are restated. For information please refer note 2.3
1.3 Basis of Consolidation
- The consolidated financial statements include the financial statements of the Holding
Company, its subsidiaries and share of profit/loss from an associate company collectively
referred to as "the Group" in these consolidated financial statements.
- Subsidiary companies are fully consolidated from the date on which more than 50% of
voting rights are transferred to the Group or power to control them is established and
excluded from consolidation from the date of disposal or when the control is lost.
- The financial statements of the subsidiaries are prepared for the same reporting year as
of the Holding Company for the purpose of consolidation, using consistent accounting
policies.

89
- The assets, liabilities, income and expenses of subsidiary companies are consolidated on
a line by line basis.
- Material inter-group balances and transactions have been eliminated.
- Non-controlling Interest in equity of the subsidiary companies are measured at fair value
as of the acquisition date of the subsidiaries.
1.4 Business Combination
Acquisitions of businesses are accounted for using the acquisition method. The consideration
transferred in a business combination is measured at fair value, which is calculated as the sum
of the acquisition-date fair values of the assets transferred by the Holding Company, liabilities
incurred by the Holding Company to the former owners of the acquiree and the equity interests
issued by the Company in exchange for control of the acquiree. Acquisition-related costs are
recognized in profit and loss account as incurred.
At the acquisition date, the identifiable assets acquired and the liabilities assumed are
recognized at their fair value at the acquisition date.
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of
any non-controlling interests in the acquiree, and the fair value of the acquirer's previously held
equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the
identifiable assets acquired and the liabilities assumed. If, net amounts at the acquisition-date
of the identifiable assets acquired and liabilities assumed exceeds the sum of the
consideration transferred, the amount of any non-controlling interests in the acquiree and the
fair value of the acquirer's previously held interest in the acquiree (if any), the excess is
recognized immediately in profit and loss as a bargain purchase gain.
Non-controlling interests that are present ownership interests and entitle their holders to a
proportionate share of the subsidiaries' net assets in the event of liquidation is measured at fair
value at the date of the acquisition.
2. STATEMENT OF COMPLIANCE
2.1 These consolidated financial statements have been prepared under accounting and reporting
standard as applicable in Pakistan.The accounting and reporting standards applicable in
Pakistan comprise of International Financial Reporting Standards (IFRS) issued by the
International Accounting Standards Board (IASB) as notified under the Companies Act, 2017
and provisions of and directives issued under the Companies Act, 2017. Where provisions of
and directives issued under the Companies Act, 2017 differ from the IFRS, the provisions of
and directives issued under the Companies Act, 2017 have been followed.
2.2 Basis of preparation
These consolidated financial statements have been prepared under the historical cost
convention as modified by:

- recognition of certain employee retirement benefits at net present value;

- recognition of certain financial instruments at fair value; and
- investment in associate accounted for under equity method
2.3 New amendments that are effective for the year ended June 30, 2018
The following amendments are effectivefor the year ended June 30, 2018. These amendments
are either not relevant to the Group's operations or are not expected to have significant impact
on the Group's consolidated financial statements other than certain additional disclosures.
Effective from accounting periods
beginning on or after:
Amendments to IAS 7 'Statement of Cash Flows' - January 01, 2017
Amendments as a result of the disclosure
initiative
Amendments to IAS 12 'Income Taxes' - January 01, 2017
Recognition of deferred tax assets for unrealised
losses
Certain annual improvements have also been made to a number of IFRSs, which do not have a
significant effect on the financial reporting of the Group and therefore have not been discussed
here.
The Companies Act, 2017 (the Act) has also brought certain changes with regard to
preparation and presentation of consolidated financial statements of the Group, which interalia
include presentation of unclaimed dividend and dividend payable on the face of the statement of
financial position.
Further, the disclosure requirements contained in the Fourth Schedule to the Act have been
revised, resulting in the:
- elimination of duplicative disclosures with the IFRS disclosure requirements; and

- incorporation of significant additional disclosures.
2.4 New accounting standards / amendments and IFRS interpretations that are not yet
effective
The following standards, amendments and interpretations are only effective for accounting
periods, beginning on or after the date mentioned against each of them. These standards,
interpretations and the amendments are either not relevant to the Group's operations or are not
expected to have significant impact on the Group's consolidated financial statements other
than certain additional disclosures.
Standards / Amendments / Interpretation Effective date (accounting periods
beginning on or after)
Amendments to IFRS 2 'Share-based
January 01, 2018
Payment' - Clarification on the classification
and measurement of share-based payment

IFRS 4 'Insurance Contracts': Amendments An entity choosing to apply the overlay

regarding the interaction of IFRS 4 and IFRS 9. approach retrospectively to qualifying
financial assets does so when it first applies
IFRS 9. An entity choosing to apply the
deferral approach does so for annual periods
beginning on or after 1 January 2018.
IFRS 9 'Financial Instruments' - This standard will

July 01, 2018
supersede IAS 39 Financial Instruments:
Recognition and Measurement upon its effective
date.
Amendments to IFRS 9 'Financial Instruments'

- Amendments regarding prepayment features January 01, 2019
with negative compensation and modifications
of financial liabilities
IFRS 15 'Revenue from contracts with

customer' - This standard will supersede IAS July 01, 2018
18, IAS 11, IFRIC 13, 15 and 18 and SIC 31
upon its effective date.
IFRS 16 'Leases': This standard will supersede

January 01, 2019
IAS 17 'Leases' upon its effective date.
Amendments to IAS 19 'Employee Benefits' -

January 01, 2019
Amendments regarding plan amendments,
curtailments or settlements.
Amendments to IAS 28 'Investments in
Associates and Joint Ventures' - Amendments
regarding long-term interests in an associate January 01, 2019
or joint venture that form part of the net
investment in the associate or joint venture but
to which the equity method is not applied.
Amendments to IAS 40 'Investment Property':

January 01, 2018. Earlier application is
Clarification on transfers of property to or from
permitted.
investment property
IFRIC 23 'Uncertainty over Income Tax

Treatments': Clarifies the accounting treatment
in relation to determination of taxable profit January 01, 2019
(tax loss), tax bases, unused tax losses,
unused tax credits and tax rates, when there
is uncertainty over income tax treatments
Certain annual improvements have also been made to a number of IFRSs.

2.4.1 IFRS 9 'Financial Instruments' Impact Assessment
IFRS 9 'Financial Instruments' was issued on July 24, 2017. This standard is adopted locally
by the Securities and Exchange Commission of Pakistan and is effective from accounting
periods beginning on or after July 01, 2018.
Key requirements of IFRS 9 are as follows;
Classification and measurement of financial assets
- All recognized financial assets that are within the scope of IFRS 9 are required to be
subsequently measured at amortised cost or fair value.
- Debt investments that are held within a business model whose objective is to collect the
contractual cash flows, that are solely payments of principal and interest on the principal
outstanding are generally measured at amortised cost at the end of subsequent
accounting periods.
- Debt instruments that are held within a business model whose objective is achieved both
by collecting contractual cash flows and selling financial assets, and that have
contractual terms that give rise on specified dates to cash flows that are solely payments
of principal and interest on the principal amount outstanding are generally measured at
fair value through other comprehensive income "FVTOCI".
- All other debt investments and equity investments are measured at their fair value at the
end of subsequent accounting periods.
In addition, under IFRS 9, entities may make an irrevocable election to present subsequent
changes in the fair value of an equity investment (that is not held for trading) in other
comprehensive income, with only dividend income generally recognized in profit or loss.
Classification and measurement of financial liabilities
With regard to the measurement of financial liabilities designated as at fair value through profit
or loss, 'IFRS 9 requires as follows:
The amount of change in the fair value of a financial liability that is attributable to changes in
the credit risk of that liability is presented in other comprehensive income, unless the
recognition of such changes in other comprehensive income would create or enlarge an
accounting mismatch in profit or loss.
Changes in fair value attributable to a financial liability's credit risk are not subsequently
reclassified to profit or loss. Under IAS 39, the entire amount of the change in the fair value of
the financial liability designated as fair value through profit or loss is presented in profit or loss.

Impairment of financial assets
In relation to the impairment of financial assets, IFRS 9 requires an expected credit loss
model, as opposed to an incurred credit loss model under IAS 39. The expected credit loss
model requires an entity to account for expected credit losses and changes in those expected
credit losses at each reporting date to reflect changes in credit risk since initial recognition. In
other words, it is no longer necessary for a credit event to have occurred before credit losses
are recognized.
2.4.2 Impact assessment of standards, amendments and interpretations

The above standards and amendments are not expected to have any material impact on the
Group's consolidated financial statements in the period of initial application of except for IFRS
15 - Revenue From Contracts With Customers and IFRS 9- Financial Instruments.The Group is
currently evaluating the impact of the said standard.
2.5 Other than the aforesaid standards, interpretations and amendments, the International
Accounting Standards Board (IASB) has also issued the following standards which have not
been adopted locally by the Securities and Exchange Commission of Pakistan:
- IFRS 1 – First Time Adoption of
- IFRS 14 – Regulatory Deferral
- IFRS 17 – Insurance Contracts
3. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS
The preparation of consolidated financial statements in conformity with the approved

accounting standards as applicable in Pakistan, requires management to make estimates,
assumptions and use of judgment that affect the application of policies and the reported
amount of assets, liabilities, income and expenses.
Estimates and judgments, if any, are continually evaluated and are based on historical
experience and other factors, including expectations of future events that are believed to be
reasonable under the circumstances. The areas where various assumptions and estimates are
significant to the consolidated financial statements or where judgment was exercised in
application of accounting policies are as follows:
- Provision for current tax and deferred tax (Notes 4.1, 9 and 34)
- Provision for staff retirement benefits (Notes 4.2, 9.2-9.6)
- Depreciation rates of property, plant and equipment (Note 14.1)
- Classification of investments (Notes 4.10,16 and 24)
- Net realizable value of stock-in-trade (Notes 4.8 and 19)
- Provision for impairment of trade debts and other receivables (Notes 4.9, 4.6.1, 20.4 and
23)
- Provision for slow moving stores and spares (Notes 4.7 and 18.2)
- Useful lives of intangibles (note 4.5.3, and 15)
4. SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies applied in the preparation of these consolidated financial
statements are set out below. These have been consistently applied to all years presented
unless otherwise stated.

4.1 Taxation
Current
Provision for current taxation is based on taxability of certain income streams of the Group
under presumptive / final tax regime at the applicable tax rates, remaining taxable income at
the current rates of taxation under normal tax regime after taking into account tax credits and
rebates available, if any, or on turnover at the specified rate or Alternative Corporate Tax as
defined in section 113C of Income Tax Ordinance, 2001, whichever is higher.
Deferred
Deferredincome tax is recognized using balance sheet liability method for all major temporary
differences arising between tax bases of assets and liabilities and their carrying amounts in the
financial statements.
Deferred tax liabilities are generally recognized for all taxable temporary differences and
deferred tax assets are recognized to the extent that it is probable that taxable profits and
taxable temporary differences will be available against which deductible temporary differences
can be utilized. The carrying amount of deferred tax assets is reviewed at each reporting date
and reduced to the extent that it is no longer probable that sufficient taxable profits and taxable
temporary differences will be available to allow all or part of the assets to be recovered.
4.2 Employee benefits
4.2.1 Defined benefit plan
The Holding Company
The Holding Company operates an unfunded gratuity scheme covering all its employees who
have completed minimum qualifying period of service. Provisions are determined based on
actuarial valuation conducted by a qualified actuary using Projected Unit Credit Method. Under
this method cost of providingfor gratuity is charged to profit and loss account so as to spread
the cost over the service lives of the eligible employees in accordance with the actuarial
valuation. Past-service costs are recognized immediately in profit and loss account and
actuarial gains and losses are recognized immediately in other comprehensive income.
Indus Lyallpur Limited
The Company operates an unfunded gratuity scheme covering all its employees who have
completed minimum qualifying period. Provisions are determined based on the actuarial
valuation conducted by a qualified actuary using Projected Unit Credit Method. Under this
method cost of providing for gratuity is charged to profit and loss account so as to spread the
cost over the service lives of the eligible employees in accordance with the actuarial valuation.
Past-service costs are recognized immediately in profit and loss account and actuarial gains
and losses are recognized immediately in other comprehensive income.
Indus Home Limited
The Company operates an unfunded gratuity scheme for all its employees who are eligible
under the scheme. Provision is made annually to cover the liability under the scheme. The
latest actuarial valuation was carried on June 30, 2018, using projected unit credit method.
Past service cost are recognized immediately in profit and loss. Acturial gains and losses are
recognised immediately in other comprehensive income.
4.2.2 Compensated absences
The Holding Company and Indus Lyallpur Limited provide for compensated absences of its
eligible employees on unavailed balance of leaves in the year in which the leaves are earned.

4.3 Trade and other payables
Liabilities for trade and other amounts payable are carried at cost which is the fair value of the
consideration to be paid in the future for goods and services received whether billed to the
Group or not.
4.4 Borrowings
Borrowings are recognised initially at fair value, net of transaction costs incurred and are
subsequently stated at amortised cost. Any difference between the proceeds (net of
transaction costs) and the redemption value is recognised in statement of profit or loss over the
period of borrowings using the effective interest rate method.
Borrowings are classified as current liabilities unless the Group has an unconditional right to
defer the settlement of the liability for at least twelve months after the reporting date. Exchange
gains and losses arising in respect of borrowings in foreign currency are added to the carrying
amount of the borrowing.
4.5 Property, plant and equipment

4.5.1 Owned
Property, plant and equipment owned by the Group are stated at cost less accumulated
depreciation and impairment loss if any, except for freehold and leasehold land which are
stated at cost.
Depreciation is charged to income using the reducing balance method whereby cost of an
asset is written-off over its estimated useful life at the rates given in note 14.1.
An item of property and equipment is derecognized upon disposal or when no future economic
benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the
asset is recognized in the profit and loss account in the year the asset is derecognized.
In respect of additions and disposals during the year, depreciation is charged from the month
of acquisition and upto the month preceding the month of disposal respectively.
Subsequent costs are included in the asset's carrying amount or recognized as a separate
asset, as appropriate, only when it is probable that future economic benefits associated with
the item will flow to the Group and the cost of the item can be measured reliably. All other
repairs and maintenance are charged to income during the year in which these are incurred.
Gains and losses on disposal of assets, if any, are recognized as and when incurred.
Depreciation methods, useful lives and residual values are reviewed periodically and adjusted, if
appropriate, at each reporting date.
Capital work-in-progress (CWIP) is stated at cost less accumulated impairment if any. All
expenditures connected to the specific assets incurred during the installation and construction
period are carried under CWIP. These are transferred to specific assets as and when assets
are ready for their intended use.

4.5.3 Intangible assets

Intangible assets of the Company are stated at cost less accumulated amortisation and
impairment loss if any. Amortisation is charged to profit and loss account using the reducing
balance method at the rates given in note 15.1. The estimated useful life and amortisation
method are reviewed at the end of each reporting period, with the effect of any change in
estimate being accounted for on prospective basis.
4.6 Impairment
4.6.1 Financial assets
The Group assesses at each reporting date whether there is an indication that an asset or a
group of assets is impaired. If any indication exists or when annual impairment testing for an
asset is required, the Group estimates the asset’s recoverable amount. An asset’s recoverable
amount is higher of an asset’s fair value less cost to sell and its value in use. Where the
carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired
and is written down to its recoverable amount. In assessing value in use, the estimated future
cash flows are discontinued to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the assets. In
determining fair value less cost to sell, an appropriate valuation model is used.
The Group assesses at each reporting date whether there is any objective evidence that a
financial asset or a group of financial assets is impaired. A financial asset or a group of
financial assets is deemed to be impaired if, and only if, there is an objective evidence of
impairment as a result of one or more events that has occurred after the initial recognition of
the asset (an incurred “loss event”) and that loss event has an impact on the estimated future
cash flows of the financial asset or the group of financial assets carried at amortized cost are
recognized in profit and loss account.
4.6.2 Non-financial assets

The Group assesses at each reporting date whether there is any indication that assets except
deferred tax assets and inventories may be impaired. If such indication exists, the carrying
amounts of such assets are reviewed to assess whether they are recorded in excess of their
recoverable amount. Where carrying values exceed the respective recoverable amount, assets
are written down to their recoverable amounts and the resulting impairment loss is recognized
in profit and loss account. The recoverable amount is the higher of an asset's fair value less
costs to sell and value in use.
Where an impairment loss subsequently reverses, the carrying amount of the asset is
increased to the revised estimate of its recoverableamount, but so that the increased carrying
amount does not exceed the carrying amount that would have been determined had no
impairment loss been recognised for the asset in prior years. A reversal of an impairment loss
is recognised immediately in profit and loss account.
4.7 Stores, spares and loose tools

These are valued at cost determined on moving average cost method less allowance for
obsolete and slow moving items. Items in transit are valued at invoice values plus other
charges incurred thereon.
4.8 Stock in trade
These are valued at lower of cost and net realizable value. Cost is determined by applying the
following basis:

Basis of valuation
Raw material Weighted average cost
Work in progress Weighted average cost of material and share of applicable overheads
Finished goods Weighted average cost of material and share of applicable overheads
Packing material Moving average cost

Waste and scrap Net realizable value
Stock in transit Accumulated cost till reporting date
Net realizable value is the estimated selling price in the ordinary course of business less
estimated cost of completion and estimated costs necessary to make the sale.
4.9 Trade debts and other receivables

Trade debts and other receivables are carried at original invoice amount less an estimate made
for doubtful receivables based on review of indicators as discussed in note 4.6.1. Balances
considered bad and irrecoverable are written off when identified.
4.10 Investments
4.10.1 Regular way purchase or sale of investments
All purchases and sales of investments are recognized using settlement date accounting.
Settlement date is the date when the investments are delivered to or by the Group.
4.10.2 Investment in associate
Associate is an entity over which the Holding Company has significant influence, but not
control, generally accompanying a shareholding of 20% to 50% of the voting rights or common
directorship.
Investments in associate are accounted for using equity method of accounting and initially are
recognized at cost and subsequently adjusted to recognize the Group's share of the profit or
loss and other comprehensive income of the associate. When the Group's share of losses
exceeds its interest (carrying amount under equity method), the carrying amount of that
interest is reduced to nil and the recognition of further losses is discontinued except to the
extent that the Group has an obligation or has made payments on behalf of the investee.
4.10.3 Financial assets at fair value through profit or loss - held-for-trading

An investment that is acquired principally for the purpose of generating profit from short-term
fluctuations in prices is classified as ''fair value through profit or loss - held-for-trading''.
Financial assets are initially recognized at fair value plus transaction costs except for financial
assets carried 'at fair value through profit or loss'. Financial assets carried 'at fair value through
profit or loss' are initially recognized at fair value and transaction costs are recognized in the
profit and loss account.
Subsequent to initial recognition, equity securities designated by the management as 'at fair
value through profit or loss - held-for-trading'are valued on the basis of closing quoted market
prices available at the stock exchange.

All investments are de-recognized when the rights to receive cash flows from the investments
have expired or have been transferred and the Group has transferred substantially all risks and
rewards of ownership.
Net gains and losses arising from changes in the fair value of financial assets carried 'at fair
value through profit or loss - held-for-trading' are taken to the profit and loss account.
4.10.4 Derivative financial instruments
Derivatives are initially recorded at fair value on the date a derivative contract is entered into
and are remeasured to fair value at subsequent reporting dates. Derivativeswith positive impact
at reporting date are included in 'other financial assets' and with negative impacts in 'trade and
other payables' in the balance sheet. The resultant gains and losses are included in other
income/ other operating expenses.
Derivatives financial instruments entered into by the Group do not meet the hedging criteria as
defined by IAS 39, Financial Instruments: 'Recognition and Measurement'. Consequently
hedge accounting is not used by the Group.
4.11 Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying

assets, which are assets that necessarily take a substantial period of time to get ready for
their intended use or sale, are added to the cost of those assets, until such time as the assets
are substantially ready for their intended use or sale.
All other borrowing costs are recognized in profit and loss account in the period in which they
are incurred.
4.12 Foreign currencies
These consolidated financial statements are presented in Pakistani Rupees, which is the
Group's functional and presentation currency. Transactions in other than Pakistani Rupee are
translated into reporting currency at the rates of exchange prevailing on the date of
transactions except for those covered by forward contracts, which are translated at contracted
rates. At each reporting date, monetary assets and liabilities that are denominated in foreign
currencies are retranslated at the rates prevailing on the reporting date except for those
covered by forward contracts, which are stated at contracted rates.
Gains and losses arising on retranslation are included in profit and loss account.
4.12.1 Foreign subsidiary
The assets and liabilities of foreign subsidiary are translated to Pakistani Rupees at exchange
rates prevailing at the reporting date. The results of foreign subsidiary are translated at the
average rate of exchange for the year. Resulting exchange gains and losses are recognised in
other comprehensive income in the consolidated financial statements.

4.13 Provisions
Provisions are recognized when the Group has a present, legal or constructive obligation as a
result of past event, it is probable that an outflow of resources embodying economic benefits
will be required to settle the obligation and a reliable estimate of the amount can be made.
However, provisions are reviewedat each reporting date and adjusted to reflect the current best
estimate.
4.14 Revenue recognition

Revenue is recognized to the extent it is probable that the economic benefits will flow to the
Group and the revenue can be measured reliably. Revenue is measured at the fair value of the
consideration received or receivable, and is recognized on the following basis:
- Sales are recorded when the significant risk and rewards of ownership of the goods have
passed to the customers which coincide with the dispatch of goods to the customers for
local sales and date of preparation of bill of lading for export sales.
- Income on bank deposits are recorded on time proportionate basis using effectiveinterest
rate.
- Dividend income is recognized when the right to receive the dividend is established.
- Duty drawbacks are recognised on receipt basis when there is reasonable assurance that
these will be received.
- Gain from sale of securities is recognised in the period when these are sold.
- Gain on revaluation of foreign currency receivables and payables are determined and
recognised based on rates prevalent on reporting dates and settlement date.
4.15 Financial instruments
All financial assets and liabilities are recognized at the time when the Group becomes party to
the contractual provisions of the instrument and derecognized when the Group loses control of
the contractual rights that comprise of the financial assets and in case of financial liability
when the obligation specified in the contract is discharged, cancelled or expired. Other
particular recognition methods adopted by the Group are disclosed in the individual policy
statements associated with each item of financial instruments.
4.16 Offsetting of financial assets and financial liabilities
A financial asset and a financial liability is offset and net amount is reported in the balance
sheet if the Group has a legal right to offset the recognized amounts and also intends either to
settle on a net basis or to realize the asset and settle the liability simultaneously.
4.17 Cash and cash equivalents
For the purposes of cash flow statement, cash and cash equivalents comprise cash, balances
with banks on current, savings and deposit accounts and short-term borrowings excluding
loans from directors and their spouses.

4.18 Dividend distribution
Dividend distribution to the Group’s shareholders is recognized as a liability in the consolidated

financial statements in the year in which the dividends are approved by the Group’s shareholders /
directors as appropriate.
4.19 Earnings per share
The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic
EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Holding
Company by the weighted average number of ordinary shares outstanding during the year. Diluted EPS
is determined by adjusting the profit or loss attributable to ordinary shareholders of the Holding
Company and the weighted averagenumber of ordinary shares outstanding for the effects of all dilutive
potential ordinary shares.
4.20 Segment reporting
Segment information is presented on the same basis as that used for internal reporting purposes by
the Chief Operating Decision Maker (CODM). The Group considers Chief Executive as its CODM who
is responsible for allocating resources and assessing performance of the operating segments. On the
basis of its internal reporting structure, the Group considers itself to be a single reportable segment;
however, certain information about the Group’s products, as required by the approved accounting
standards, is presented in note 44 to these financial statements.
5. BUSINESS COMBINATION
In the previous years, the Holding Company subscribed the entire shareholding of Indus Wind Energy
Limited comprising 25,000 ordinary shares of Rs. 10 each representing 100% of total issued share
capital of Indus Wind Energy Limited at aggregate purchase consideration of Rs.250,000. At the time
of subscription, the subsidiary company did not have any assets except for bank balances
representing investment made by the Holding Company. As a result, no fair values were determined
and the acquisition did not result in goodwill or bargain purchase gain.
6. ISSUED, SUBSCRIBED AND PAID-UP CAPITAL
2018 2017 2018 2017

No. of shares Note Rupees in '000
Ordinary shares of Rs.10/- each

9,637,116 9,637,116 fully paid in cash 96,371 96,371
Other than cash:

5,282,097 5,282,097 Issued to the shareholders 6.1 52,821 52,821
3,154,519 3,154,519 Issued as bonus shares 31,545 31,545
180,737 180,737 180,737 180,737
6.1 These shares were issued pursuant to the Scheme of Amalgamation with Yousuf Textile Mills Limited
(YTML), determined as at October 01, 2004, in accordance with the agreed share-swap ratio.

6.2 There is no movement in issued, subscribed and paid-up capital during the year.
6.3 The Holding Company has only one class of ordinary shares which carry no right to fixed income. The
holders are entitled to receive dividends as declared from time to time and are entitled to one vote per
share at meetings of the Holding Company. All shares rank equally with regard to the Holding
Company's residual assets.
6.4 The Holding Company has no reserved shares for issuance under options and sales contracts.
2018 2017
Note Rupees in '000
7. RESERVES
Capital
Share premium 7.1 10,920 10,920

Merger reserve 7.2 11,512 11,512
Exchange translation reserve 7.3 157 (556)
22,589 21,876
Revenue
General reserve 6,977,568 6,977,568
7,000,157 6,999,444
7.1 This represents share premium received in year 2001 in respect of the issue of 3,639,960 right shares
at a premium of Rs. 3/- per share.
7.2 Merger reserve represents excess of (a) assets of YTML over its liabilities merged with the Holding
Company over (b) consideration to shareholders of YTML as per the Scheme of Amalgamation (Refer
note 6.1).
7.3 This represents exchange translation reserve on translation of foreign subsidiary Indus Home USA Inc.
(subsidiary of Indus Home Limited)
2018 2017
Note Rupees in '000
8. LONG-TERM FINANCING
Secured
From banking companies 8.2 & 8.3 2,207,710 1,642,263

Less: Payable within one year (394,567) (448,442)
1,813,143 1,193,821

8.1 Details and movement are as follows:
As at Acquired Repaid
As at June
July 01, during the during the
30, 2018
2017 year year
-------------------------- Rupees in '000 --------------------

Long-Term Financing 1,642,263 1,004,936 439,489 2,207,710
8.2 The particulars of above long-term loans are as follows:

2018
Type and nature of loan outstanding per annum repayments
Rupees in '000
Long term finance facility 1,922,835 3 month Quarterly

(LTFF) KIBOR +
0.50% to
5.00%
Term finances 284,875 2.50% to Quarterly
7.00% and half
yearly
2,207,710
2017
Type and nature of loan
outstanding per annum repayments
Rupees in '000
Long term finance facility 1,015,245 2.50% to Quarterly

(LTFF) 7.00% and half
yearly
Term finances 627,018 3 month Quarterly

KIBOR +
0.50% to
0.75%
1,642,263
8.3 These finances are secured by charge over property, plant and equipment of the Group.
8.4 There is no non-compliance of the financing agreements with banking companies which may expose
the Group to penalties or early repayment.
8.5 Sanctioned amount on long term financing amounts to Rs. 5,960 million (2016: Rs. 5,737 million)

2018 2017
Note Rupees in '000
9. DEFERRED LIABILITIES
Deferred taxation 9.1 161,663 148,187
Staff retirement gratuity:

- the Holding Company 9.2 230,814 210,024
- Indus Lyallpur Limited 9.3 29,943 23,433
- Indus Home Limited 9.4 140,689 118,982
- Indus Wind Energy Limited 9.5 738 -
563,847 500,626
9.1 Deferred taxation
Recognized in
Movement for the year ended --------------------------- (Rupees in '000) -----------------
June 30, 2018
Deductible temporary differences
in respect of:
Provision for:

- other financial assets (2,788) (9,594) - (12,382)
Intangible - (169) - (169)

Unutilized minimum tax paid (179,351) 27,628 - (151,723)
Others - - - -
(220,044) 12,052 801 (207,191)

- accelerated tax depreciation 363,911 (3,527) - 360,384
- unrealized export debtors 4,320 4,150 - 8,470
148,187 12,675 801 161,663

Recognized in
--------------------------------- (Rupees in '000) ------------------------------------
June 30, 2017
Deductible temporary differences

in respect of:
Provision for:
- other financial assets (155) (2,633) - (2,788)
Unutilized minimum tax paid (132,271) (47,080) - (179,351)
(157,524) (62,608) 88 (220,044)
- accelerated tax depreciation 222,524 141,387 - 363,911

- unrealized export debtors 3,327 993 - 4,320
68,327 79,772 88 148,187
9.1.1 The Group has not accounted for deferred tax on differences relating to its subsidiaries as the
Holding Company does not have an intention to receive dividends or dispose off its investments in
its subsidiaries in forseeable future. Deferred tax charge has been allocated as follows;
2018 2017
Rupees in '000
Profit and loss account 12,675 79,772

Other comprehensive income 801 88
13,476 79,860
9.1.2 Indus Home Limited - the Subsidiary Company

The deferred tax liability recognized in the financial statements of the subsidiary relates to
unrealized export debtors. The income of the subsidiary company falls under Final Tax Regime;
accordingly no deferred tax in respect of fair value adjustments of assets and liabilities has
been recognized in these consolidated financial statements.
9.2 Staff retirement gratuity - the Holding Company
The Holding Company operates an unfunded gratuity scheme for all its confirmed employees
who have completed the minimum qualifying period of service. Provision is made to cover
obligations under the scheme on the basis of valuation conducted by a qualified actuary. The
latest valuation was conducted on June 30, 2018 using Projected Unit Credit Method. Details
assumptions used and the amounts charged in these consolidated financial statements are as
follows:

2018 2017
The rates for withdrawal from service and retirement on ill-health grounds are based on industry
/ country experience.
2018 2017
Rupees in '000
Movement in net defined benefit obligation

70,020 73,847
Actuarial gain on remeasurement of obligation (4,329) (488)
Benefits paid (44,901) (52,469)
Present value of defined benefit obligation as at June 30 230,814 210,024
Actuarial gains and losses
Actuarial losses due to changes in demographic assumptions 13,439 -

Actuarial loss / (gain) due to experience adjustments (17,768) (488)
(4,329) (488)

Sensitivity analysis
Reasonable possible changes at the reporting date to one of the relevant actuarial
assumptions, holding other assumptions constant, would have affected the defined benefit
obligation by the amount shown below:

Change in
Increase Decrease
assumptions
-------- (Rupees in '000) --------
Discount rate 1% (211,072) 254,053

9.3 Staff retirement gratuity - Indus Lyallpur Limited

2018 2017
2018 2017
Rupees in '000


13,300 11,172
Actuarial (gain) / loss on remeasurement of obligation 2,400 (2,251)
Benefits paid (9,190) (5,656)

Actuarial loss / (gain) due to experience adjustments 2,400 (2,251)

obligation by the amount shown below:
Change in
Increase Decrease
assumptions
-------- (Rupees in '000) --------
Discount rate 1% (26,637) 33,948

9.4 Staff retirement gratuity - Indus Home Limited
Significant actuarial assumptions 2018 2017
Discount rate (%) 9 8

Expected rate of increase in salary level (%) 8 7
2018 2017
Rupees in '000


38,990 30,737
Actuarial loss on remeasurement of obligation 5,743 6,509

Benefits paid (23,026) (14,183)
Actuarial loss due to experience adjustments 5,743 6,509


Change in
Increase Decrease
assumptions
-------- (Rupees in '000) --------
Discount rate 1% (130,716) 152,279
9.5 Staff retirement gratuity - Indus Wind Energy Limited
Management has assessed that had an actuarial valuation been carried out, the resulting
provision calculated as at June 30, 2018 would not have been materially different than reflected
in these consolidated financial statements.
The expected gratuity expense for the next year amounted to Rs. 76.7 million. This is the
amount by which defined benefit liability is expected to increase.
9.6 Risks to which the schemes maintained by the Group is exposed are as follows such as:
Salary risk
The risk that the final salary at the time of cessation of service is higher than what was
assumed. Since the benefit is calculated on the final salary, the benefit amount increases
similarly.
Mortality / withdrawal risk
The risk that the actual mortality / withdrawal experience is different. The effect depends upon
the beneficiaries' service / age distribution and the benefit.
Longevity risk
The risk arises when the actual lifetime of retirees is longer than expectation. This risk is
measured at the plan level over the entire retiree population.
2018 2017
Note Rupees in '000
10. TRADE AND OTHER PAYABLES
Creditors 320,110 249,225

Accrued liabilities 1,730,458 1,320,735
Foreign bills payable 104,158 80,363
Infrastructure cess 358,376 293,459
Workers Welfare Fund 602 1,589
Advance from customers 103,132 31,869
Withholding tax payable 8,888 7,975
Others 85,429 63,359
2,742,665 2,124,215

2018 2017
Note Rupees in '000
10.1 Workers' Profits Participation Fund
Balance at beginning of the year 75,641 36,969
Allocation for the year 96,537 75,656
Interest charged during the year on

the funds utilized by the Group 33 445 569
172,623 113,194
Payments made during the year (141,111) (37,553)
Balance at end of the year 31,512 75,641
2018 2017
11. INTEREST / MARK-UP PAYABLE Note Rupees in '000
On secured loans from banking companies

- Long-term financing 15,041 19,817
- Short-term borrowings 50,365 33,188
65,406 53,005
12. SHORT-TERM BORROWINGS
From banking companies - secured

Running finance / cash finance arrangements 12.1 4,454,243 4,232,550
Finance against import / export 12.2 2,087,424 1,458,966
12.3 6,541,667 5,691,516
12.1 These carry mark-up ranging from 1 week KIBOR plus 0.05% to 3 month KIBOR + 0.05% to
1% (2017: 1 week KIBOR + 0.02% to 1% and 3 month KIBOR + 0.02% to 1%). These are
secured against charge over current assets of the Group with upto 25% margin.
12.2 These carry mark-up ranging from 0.25% to 2.2% (2017: 3 month LIBOR + 1% to 3 month
LIBOR + 2.25%) on foreign currency borrowing amount. These arrangements are secured
against charge over current assets of the Group.
12.3 The Group has aggregate short-term borrowing facilities amounting to Rs. 16,604 million (2017:
Rs. 13,454 million ) from various commercial banks.

13. CONTINGENCIES AND COMMITMENTS
13.1 Contingencies
13.1.1 Under the Gas Infrastructure Development Cess Act, 2011, Government of Pakistan levied Gas
Infrastructure Development Cess (GIDC) on gas bills at the rate of Rs. 13 per MMBTU on all
industrial consumers. In the month of June 2012, the Federal Government revised GIDC rate
from Rs. 13 per MMBTU to Rs. 100 per MMBTU and further increased from Rs.100 per MMBTU
to Rs. 200 per MMBTU in July 2014.
The Holding Company filed a suit before the High Court of Islamabad, challenging the
applicability of Gas Infrastructure Cess Act 2011. The Islamabad High Court has restrained the
Federation and gas companies from recovering GIDC over and above Rs. 13 per MMBTU. On
August 22, 2014, the Supreme Court of Pakistan declared that the levy of GIDC as a tax was
not levied in accordance with the Constitution and hence not valid.
In September 2014, the Federal Government promulgated Gas Infrastructure Cess Ordinance
No. VI of 2014 to circumvent earlier decision of the Supreme Court on the ground that GIDC
was a 'Fee' and not a 'Tax'. In May 2015, the said Ordinance was approved by the Parliament
and became an Act.
Following the imposition of the said Act, many consumers filed a petition in Honorable Sindh
High Court and obtained stay order against the Act passed by the Parliament. On October 26,
2016, the learned single Judge of Honorable High Court of Sindh had passed an order to refund
/ adjust the GIDC collected in the future bills of the respective plaintiff. In other similar case, the
said order was stayed by the Honorable Sindh High Court through order dated November 10,
2016. The Holding Company intervened in the aforementioned case for clarification and the decision of
Court is pending.
In view of aforementioned developments, the Group on prudent basis, recognized provision for
GIDC as at June 30, 2018 amounting to Rs. 758.100 million (2017: Rs. 627.747 million) in
these financial statements.
The management has only recorded provision by way of abundant precaution and management
has not passed the burden of GIDC to its customers.
13.1.2 A show cause notice bearing No. DCIR/E&Cunit-01/CREST/Zone-I/LTU/2018 dated June 11,
2018 was issued to the Holding Company in respect of inadmissible input claim on the
purchase invoices of cement, steel and varnish, packing material and Crest discrepancies
involving sales tax amount of Rs. 75.99 million. A detailed reply has been submitted by the
management, however the case is pending for the decision by the Tax Authorities. The tax
advisor of the Holding Company is confident that the above said matter will be decided in favor
of the Holding Company.

2018 2017
Rupees in '000
13.1.3 Claim of arrears of social security contribution not

acknowledged, appeal is pending in honorable High Court of 453 453
Sindh. The management is hopeful for favorable outcome.
13.1.4 Guarantees issued by banks in favour of custom 3,817 3,817

authorities on behalf of the Group
13.1.5 Guarantees issued by banks in favour of gas and electric 279,460 234,167
distribution companies
13.1.6 Bank guarantees against payment of infrastructure cess 328,042 308,196
13.1.7 Bank guarantees in favour of Collector of Customs 3,040 -
13.1.8 Bank guarantees in favour of Government of Sindh 43,154 2,625
13.2 Commitments
Letters of credit against property, plant and equipment,

stores and spares and raw cotton purchases 1,862,873 1,044,075
Civil work contracts 12,832 73,917
Bills discounted 32,050 50,333
Foreign currency forward contracts - Sale 438,854 643,503
Foreign currency forward contracts - Purchase 6,801 37,824
Post dated cheques in favour of:

Revenue Department - Government of Pakistan 1,084,776 728,891
Sales contract to be executed 2,530,447 2,358,629
13.3 The Company has total unutilised facility limit against letters of credit aggregating to Rs 18.97
billion as of reporting date.

2018 2017
Note Rupees in '000
14. PROPERTY, PLANT AND EQUIPMENT
Operating fixed assets 14.1 10,429,941 10,304,698
Capital work-in-progress 14.4 208,985 126,675
Annual Report 2018

10,638,926 10,431,373
14.1 Operating fixed assets 2018
Cost Additions/ Cost at Accumulated Depreciation/ Accumulated Carrying

at July 1, (disposal) June 30, depreciation (adjustment) depreciation value at Dep.
Particulars 2017 during the 2018 at July 1, for the year at June 30, June 30, Rate
year 2017 2018 2018
< - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - Rupees in '000' - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - > %
Owned
Freehold land 220,101 - 220,101 - - - 220,101 -
Leasehold land 143,359 4,848 148,207 - 1,627 1,627 146,580 -
Factory buildings 2,271,752 41,945 2,313,697 825,519 97,263 922,782 1,390,915 5-10
113
Non-factory buildings 177,606 - 177,606 103,028 7,458 110,486 67,120 10
Office building 110,316 20,100 130,416 21,072 16,158 37,230 93,186 5-10
Plant and machinery 12,839,175 829,914 13,414,566 5,515,418 765,129 6,091,513 7,323,053 10
(254,523) (189,034)
Electric installations 230,170 9,788 239,958 113,513 11,890 125,403 114,555 10
Power generators 877,154 236,044 1,104,219 313,628 57,229 363,704 740,515 10
(8,979) (7,153)
Factory equipment 172,568 1,103 173,671 49,064 12,195 61,259 112,412 10
Office equipment 41,729 2,718 44,259 16,309 3,951 20,123 24,136 10-30
(188) (137)
Furniture and fixtures 56,678 5,215 52,440 18,771 3,923 15,385 37,055 10
(9,453) (7,309)
Vehicles 274,312 64,636 317,951 133,900 34,986 157,638 160,313 20

(20,997) (11,248)
June 30, 2018 17,414,920 1,216,311 18,337,091 7,110,222 1,011,809 7,907,150 10,429,941
(294,140) (214,881)
2017
Cost Additions/ Cost at Accumulated Depreciation/ Accumulated Carrying

at July 1, (disposal) June 30, depreciation (adjustment) depreciation value at Dep.
Particulars 2016 during the 2017 at July 1, for the year at June 30, June 30, Rate
year 2016 2017 2017
< - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - Rupees in '000' - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - > %
Owned
Freehold land 220,701 - 220,101 - - - 220,101 -

(600)
Leasehold land 52,035 91,324 143,359 - - - 143,359 -
Factory buildings 2,263,085 8,667 2,271,752 652,858 172,661 825,519 1,446,233 5-10
Non-factory buildings 177,606 - 177,606 94,742 8,286 103,028 74,578 10
Office building 110,316 - 110,316 16,375 4,697 21,072 89,244 5-10
Plant and machinery 12,564,770 407,925 12,839,175 4,874,751 733,820 5,515,418 7,323,757 10
114
(133,520) (93,153)
Electric installations 229,674 496 230,170 100,649 12,864 113,513 116,657 10
Power generators 834,261 123,855 877,154 310,325 52,339 313,628 563,526 10

(80,962) (49,036)
Factory equipment 172,550 2,980 172,568 37,026 13,351 49,064 123,504 10

(2,962) (1,313)
Office equipment 38,703 3,801 41,729 12,678 4,305 16,309 25,420 10-30
(775) (674)
Furniture and fixtures 51,589 5,089 56,678 14,806 3,965 18,771 37,907 10
Vehicles 263,347 35,534 274,312 118,343 32,261 133,900 140,412 20

(24,569) (16,704)
June 30, 2017 16,978,637 679,671 17,414,920 6,232,553 1,038,549 7,110,222 10,304,698
(243,388) (160,880)
Annual Report 2018

2018 2017
Note --------Rupees in '000'--------
14.1.1 Allocation of depreciation
Manufacturing expense 28.2 962,166 988,209

Administrative expense 31 49,643 50,340
1,011,809 1,038,549
14.2 Disposals of operating fixed assets:
A c c um ula t e d N e t bo o k S a le G a in / M o de o f
P a rt ic ula rs C o st P a rt ic ula rs o f buye rs
de pre c ia t io n v a lue pro c e e d ( lo s s ) dis po s a l
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - R upe e s in '0 0 0 ' - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Plant and machinery
Autocone Schalaforst 20,749 (12,912) 7,837 8,096 259 Gulf Textile Negotiation
Autoconer Schalaforst 31,360 (26,021) 5,339 1,500 (3,839) MKM Textile Int. Negotiation
Ring Frames 51,105 (38,765) 12,340 7,200 (5,140) AJ Textile Mills Negotiation
Machconer Savio 64 Spindles 5,006 (4,025) 981 632 (349) Muhammad Kamran Negotiation
Ring Frames 12,673 (9,613) 3,060 1,200 (1,860) Nagra Spin Mills PVT Negotiation
Limited
Autocone Schalaforst 17,127 (13,470) 3,657 2,874 (783) Gulf Textile Negotiation
Schalaforst 17,021 (13,452) 3,569 2,310 (1,259) Gulf Textile Negotiation
Capio Slub Device 4,524 (3,575) 949 170 (779) Muhammad Kamran Negotiation
Dyeing Bleach Line 84,624 (58,018) 26,606 3,100 (23,506) Akram Trading Auction
2 4 4 ,18 9 ( 17 9 ,8 5 1) 6 4 ,3 3 8 2 7 ,0 8 2 ( 3 7 ,2 5 6 )
Vehicles
Honda Prosmatec 2,090 (1,516) 574 600 26 Ghulam Murtaza Negotiation
Honda Prosmatec 2,511 (746) 1,765 2,100 335 Insurance Claim Negotiation
Suzuki Cultus Vxrii-16 LEB 5823 1,138 (302) 836 1,138 302 Qazi Tariq Negotiation
Honda City 16 BFG 474 1,526 (366) 1,160 1,526 366 Adnan Sheikh Negotiation
Honda City Prosmatic Aspire16 LED 1978 1,841 (441) 1,400 1,841 441 Yasir Qureshi Negotiation
Suzuki Mehran VXR-16 LEH 6081 725 (151) 574 580 6 Saqib Minhas Negotiation
9 ,8 3 0 ( 3 ,5 2 2 ) 6 ,3 0 9 7 ,7 8 4 1,4 7 5
Furnitures & fixtures
Office furniture 9,422 (7,288) 2,134 165 (1,969) Zubair Kabari Negotiation
Power generators
Caterpillar Generator 8,979 (7,153) 1,826 1,900 74 Gulzar Traders Negotiation
Other (assets having net book value of less

than Rs. 500,000) 21,719 (17,067) 4,652 7,260 2,608 Various Negotiation
2 0 18 2 9 4 ,13 9 ( 2 14 ,8 8 1) 7 9 ,2 5 9 4 4 ,19 1 ( 3 5 ,0 6 8 )
2 0 17 243,388 (160,880) 82,508 53,747 (28,761)

14.3 Particulars of immovable property (i.e. land and building) in the name of Group are as follows:
Covered
Usage of immovable Total Area
Location Area
property (In acres)
(In sq.ft)
Land:
Chak # 61 R/B, Mouza Bedianwala, Tehsil

Jaranwala at 38-Km, Sheikhpura Road, Dist.
Faisalabad Manufacturing facility 26.00 415,898
Korangi mill , Karachi- Plot # 3 and 7, Sector 25,

Korangi, Karachi Manufacturing facility and labour colony 12.50 544,500
Hyderabad mill - Plot No. P-1 & P-5, S.I.T.E,

Hyderabad Manufacturing facility and labour colony 29.00 1,263,240
Nooriabad - Plot # K-31 and K-32 , Nooriabad Held for business expansion 40.00 1,742,400
Shujabad- Railway Road, Shujabad Held for business expansion 15.64 681,442
Naseerpur- Adda Pira Ghayaib, Mototly Road Manufacturing facility 8.28 360,459
Muzaffargarh Mill- Bagga Sher, Khan pur Shumail,

District Multan Manufacturing facility and labour colony 30.86 1,344,371
Lahore- 2.5 Kilometr off Manga Raiwind Road,

Lahore Held for business expansion 15.80 688,248
Raiwand Road, Manga Mandi, Lahore Manufacturing Unit 353.00 986,833
Factory and non factory buildings:
Korangi Mill- Plot # 3 and 7, Sector 25, Korangi,

Karachi Manufacturing facility and labour colony 7.32 318,925
Hyderabad Mill- Plot # P-1 & P-5, S.I.T.E.

Hyderabad Manufacturing facility 16.65 725,505
Muzaffargarh Mill- Bagga sher, Khan pur Shumali,

District Multan Manufacturing facility 12.13 528,477
Korangi Mill- Plot # 3 and 7, Sector 25, Korangi,

Karachi Manufacturing facility and labour colony 1.18 51,722
Hyderabad Mill- Plot # P-1 & P-5, S.I.T.E.

Hyderabad Manufacturing facility and labour colony 4.71 205,206
Muzaffargarh Mill- Bagga sher, Khan pur Shumali,

District Multan Manufacturing facility and labour colony 1.79 78,021
Office building:
Lahore- 174, Abu Bakar Block, New Garden Town

Lahore Held for business expension 0.09 3,750
Karachi- Office# 508, 5th Floor, Beaumont Plaza,

Karachi Office use 0.14 5,946

2018 2017
Note Rupees in '000
14.4 Capital work-in-progress
Civil work 197,159 126,675

Plant and machinery 1,138 -
Vehicles 10,688 -
14.4.1 208,985 126,675

Civil Plant and
Vehicles Total
work machinery
……………...…………(Rupees '000)……………...…………
As at June 30, 2016 39,023 101,430 5,241 145,694

Transferred to operating fixed assets (19,481) (224,457) (9,881) (253,819)
As at June 30, 2017 126,675 - - 126,675

Transferred to operating fixed assets (48,194) - - (48,194)
As at June 30, 2018 197,159 1,138 10,688 208,985
2018 2017
Note Rupees in '000
15. INTANGIBLE ASSETS
Intangibles under use - Software 15.1 13,762 19,660

Intangibles under implementation - Software 8,099 8,099
21,861 27,759
15.1 Intangibles under use - Software
Year ended June 30
Net book value as at July 1 19,660 4,633
Additions - 18,241
Amortisation for the year 15.1.1 (5,898) (3,214)
Net book value as at June 30 At June 30 13,762 19,660
Cost 25,595 25,595

Accumulated amortisation (11,833) (5,935)
Net book value 13,762 19,660
Annual amortisation rate 30% 30%

15.1.1 Amortisation for the year has been charged to administrative expenses.
15.2 Intangibles under implementation - Software
As at June 30, 2017 8,099
Additions during the year -

Transferred to intangible assets -
As at June 30, 2018 8,099
2018 2017
Note Rupees in '000
16. LONG-TERM INVESTMENT
Investment in associate 16.1 26,784 22,567
16.1 Investment in associate

- Sunrays Textile Mills Limited
Cost 1,716 1,716
Share of post acquisition profits:
Opening 20,851 19,895

Dividend received (275) (687)
Share of profit from associate for the year 4,492 1,643
25,068 20,851
26,784 22,567
Number of shares held 68,654 68,654

Ownership interest 0.99% 0.99%
Market value (Rupees in '000) 11,702 13,559
Cost of investment (Rupees in '000) 1,716 1,716
16.1.1 The existence of significant influence by the Company is evidenced through common directorship
in the associate.
16.1.2 Summarized financial highlights as at and for the year ended June 30 are as follows:

2018 2017
Note Rupees in '000
Non-current assets 1,508,583 1,185,009

Current assets 4,196,080 2,859,535
Total assets 5,704,663 4,044,544
Non-current liabilities 588,777 89,440

Current liabilities 2,410,387 1,500,405
Total liabilities 2,999,164 1,589,845
Net assets 2,705,499 2,454,699
Net assets 2,705,499 2,454,699
Percentage holding 0.99% 0.99%
Share in net assets 26,784 24,302
Revenue 4,952,171 4,256,597
Comprehensive income for the year 278,400 141,738
17. LONG-TERM DEPOSITS
Electricity 12,791 10,502

Others 2,684 4,255
15,475 14,757
2018 2017
Note Rupees in '000
18. STORES, SPARES AND LOOSE TOOLS
Stores, spares and loose tools 18.1 625,690 577,517

Less: provision for slow moving and obsolete stock 18.2 (46,908) (50,199)
578,782 527,318
18.1 It include stores and spares in transit amounting to Rs. 154.56 million (2017: Rs. 93.73 million).

2018 2017
Note Rupees in '000
18.2 Movement in provision for slow moving & obsolete stock
Opening balance 50,199 45,399

Provision for the year 3,711 4,800
Reversal of provision (7,002) -
Closing Balance 46,908 50,199
19. STOCK-IN-TRADE
Raw material
- in hand 4,621,507 4,438,861
- in transit 797,914 291,168
5,419,421 4,730,029
Work-in-process 811,992 671,686
Finished goods 19.1 1,025,684 1,034,081
Packing material 54,760 44,621
Waste 72,690 69,725
7,384,547 6,550,142
19.1 The stock of finished goods have been written down to their net realizable values by Rs. 1.07
million (2017: Rs. 5.6 million).
2018 2017
Note Rupees in '000
20. TRADE DEBTS
Considered good
Secured
Foreign debtors 20.1 & 20.2 4,201,258 933,467
Local debtors - 87,346
4,201,258 1,020,813
Unsecured
Local debtors 993,050 999,201
5,194,308 2,020,014
Less: provision for doubtful debts - -
20.3 5,194,308 2,020,014
20.1 The amount of export sales in repect of outstanding trade debts along with foreign jurisdiction is
below:

2018 2017
Debt Sale Debt Sale

---------------------------------------Rupees in 000-----------------------------------------
Asia 3,912,911 8,058,064 802,286 5,596,167

Europe 288,347 397,433 131,181 243,455
4,201,258 8,455,497 933,467 5,839,622
All these trade debts are secured against letters of credit.

20.2 These are secured against letters of credit in favour of the Group.
20.3 Trade debts consist of a large number of customers, spread across geographical areas. Ongoing
credit evaluation is performed on the financial condition of credit customers.
2018 2017
Note Rupees in '000
20.4 Aging of debtors
From 1 to 30 days 1,086,127 1,380,819

From 30 to 90 days 1,141,709 488,232
From 90 to 180 days 1,522,343 146,090
From 180 to 360 days 1,443,175 2,890
More than 360 days 954 1,983
5,194,308 2,020,014
21. LOANS AND ADVANCES

Considered good
Loans to staff 21.2 39,353 26,966
Advance income tax - net 21.1 132,045 108,433
Advances to:
- Suppliers 32,483 50,513
- Employees 1,790 5,194
- Others 50,999 37,247
85,272 92,954
256,670 228,353
21.1 Advance income tax - net
Advance income tax 323,673 313,097

Less: Provision for taxation (182,622) (196,294)
Less: Workers' Welfare Fund 21.1.1 (9,006) (8,370)
132,045 108,433

21.1.1 Prior to certain amendments made through the Finance Acts of 2006 & 2008, Workers Welfare
Fund (WWF) was levied at 2% of the total income assessable under the Income Tax Ordinance,
2001 excluding incomes falling under the Final Tax Regime (FTR). Through Finance Act, 2008, an
amendment was made in Section 4(5) of the WWF Ordinance, 1971 (the Ordinance) whereby
WWF liability is applicable at 2% of the higher of the profit before taxation as per the accounts or
declared income as per the return.
Aggrieved by the amendments made through the Finance Acts, certain stakeholders filed petition
against the changes in the Lahore High Court which struck down the aforementioned amendments
to the Ordinance in 2011. However, the Company together with other stakeholders also filed the
petition in the Sindh High Court which, in 2013, decided the petition against the Company and
other stakeholders. Management has filed a petition before the Honourable Supreme Court of
Pakistan against the decision of the Sindh High Court.
Honourable Supreme Court of Pakistan has passed an order dated November 10, 2016 that the
Workers' Welfare Fund (WWF) is a fee, not a tax. Hence, the amendments made through Finance
Acts, 2006 and 2008 have been declared invalid in the said order. Therefore, the management
believes that in the light of the aforementioned judgement, all cases pertaining to WWF, pending
for adjudication would be decided in the favour of the Group. The management has filed an
application for rectification order amounting to Rs. 130.15 million for the years from 2010 to 2014
contending the fact that they had erroneously paid WWF despite of having exemption available to
them.
21.2 These are interest free and secured against grautity entitlement.
2018 2017
Note Rupees in '000
22. TRADE DEPOSITS AND SHORT-TERM PREPAYMENTS
Considered good
Security deposits 4,302 11,785

Prepayments 72 17,094
4,374 28,879
23. OTHER RECEIVABLES

Considered good
Cotton short weight claims 36,220 13,175
Rebate refundable 68,877 63,138
Others 63,274 20,859
Derivative financial asset 14,890 1,533
183,261 98,705
24. OTHER FINANCIAL ASSETS

At fair value through profit and loss - held for trading
Investment in ordinary shares of listed companies 24.1 82,785 126,958

Investment in units of mutual funds 24.1 232,428 607,563
Held to maturity investments
Treasury bills - Government of Pakistan 24.2 - 206,977

Term deposit receipts 24.3 2,625 52,625
317,838 994,123

2018 2017
Note Rupees in '000
24.1 Market value of other financial assets

Investment in ordinary shares of listed companies
2018 2017
Number of shares
42,000 42,000 Bestway Cement Limited 5,502 9,203

- 160,000 Engro Fertilizers Limited - 8,838
40,000 45,000 Engro Corporation Limited 12,554 14,666
30,000 30,000 Fauji Fertilizer Company Limited 2,967 2,479
15,000 15,000 Habib Bank Limited 2,497 4,037
2,050,000 1,850,000 K-Electric Limited 11,644 12,765
13,304 11,088 Pakistan State Oil Company Limited 4,235 4,295
10,000 10,000 Pak Elektron Limited 355 1,103
Pakistan International Airlines
100,000 100,000 Corporation Limited 409 584
193,900 193,900 Pioneer Cement Limited 9,086 25,207
25,950 25,950 Sitara Chemical Industries Limited 9,558 11,538
141,900 136,900 United Bank Limited 23,978 32,243
82,785 126,958
Investment in units of mutual funds

2018 2017
2018 2017 Rupees in '000
Number of units
- - ABL Cash Fund - -
- 19,959,482 ABL Income Fund - 200,301
2,163 2,163 HBL Money Market Fund 232 220
1,081 1,081 HBL Cash Fund (Formerly PICIC Cash Fund) 115 109
- 3,965,107 Meezan Cash Fund - 250,001
266 266 Meezan Sovereign Fund 14 14
497,400 497,400 Meezan Income Fund 31,503 38,006
9,917 9,917 NAFA Government Security Liquid Fund 106 101
- 11,013,815 NAFA Money Market Fund - 108,580
100,000 100,000 NAFA Islamic Active Allocation Plan-V 8,965 9,868
-
1,803,098 3,505 UBL Liquidity Plus Fund 191,482 353
104 104 UBL Money Market Fund 11 10
232,428 607,563
24.2 The amount pertained to investment in Government of Pakistan Treasury Bills with Muslim
Commercial Bank carrying interest at 5.95% (2016: 5.85%) and maturity date is August 17, 2017.
24.3 The amount relates to investment in short term deposit receipts carrying interest at 5.0% (2017: 5.5%)

2018 2017
Note Rupees in '000
25. TAX REFUNDABLE
Sales tax refundable 151,713 256,801
Income tax refundable 593,249 496,219
Others 1,160 1,160
746,122 754,180
26. CASH AND BANK BALANCES
With banks
- in deposit accounts 26.1 23,019 15,327
- in current accounts 26.2 240,096 259,947
263,115 275,274
Cash in hand 9,581 10,938
272,696 286,212
26.1 The rate of profit on bank deposits ranges from 3.5% to 8.5% per annum (2017:3.75% to 4.5%
per annum).
26.2 These include balance in foreign currency accounts aggregating to Rs.19.89 million at year end
(2017: Rs. 16.31 million)
2018 2017
Note Rupees in '000
27. SALES -net
Export sales 27.1 22,882,363 18,964,941
Less: Commission (120,918) (164,471)
22,761,445 18,800,470
Local sales
Yarn 6,981,019 8,103,303
Towel 150,335 134,888
Greige Fabric 54 11,181
Waste 863,963 603,798
Less: 7,995,371 8,853,170
Sales tax @ 3% on local sales (8,368) (6,787)

Discount (1,450) (3,015)
Brokerage on local sales (116,712) (70,646)
(126,530) (80,448)
30,630,286 27,573,192

27.1 It includes exchange gain of Rs.169.18 million (2017: exchange loss of Rs. 15.48 million) and
indirect exports of Rs.3044 million (2017: Rs. 998 million).
2018 2017
Note Rupees in '000
28. COST OF GOODS SOLD
Raw material consumed 28.1 20,776,839 18,411,918

Manufacturing expenses 28.2 6,811,746 6,965,295
Outside purchases - yarn 163,123 5,729
27,751,708 25,382,942
2018 2017
Note Rupees in '000
Work in process
- Opening 671,686 467,680
- Closing (811,992) (671,686)
(140,306) (204,006)
Cost of goods manufactured 27,611,402 25,178,936
Finished goods
- Opening 1,103,807 856,153
- Closing (1,098,374) (1,103,807)
5,433 (247,654)
27,616,835 24,931,282
28.1 Raw material consumed
Opening stock 4,438,861 2,749,020

Purchases 21,237,146 20,330,474
25,676,007 23,079,494
Cost of raw cotton sold (277,661) (228,715)
Closing stock (4,621,507) (4,438,861)
20,776,839 18,411,918

28.2 Manufacturing expenses 2018 2017
Note Rupees in '000
Salaries, wages and benefits 28.2.1 2,133,760 1,961,300

Fuel, water and power 2,507,500 2,241,422
Packing material consumed 615,163 643,456
Stores and spares consumed 444,754 984,868
Insurance 45,449 38,019
Other 47,434 65,788
6,811,746 6,965,295
28.2.1 It includes staff retirement benefits Rs. 105.02 million (2017: Rs. 101.08 million).
2018 2017
29. OTHER INCOME Note Rupees in '000
Income from non-financial assets:

Scrap sale 18,572 14,571
Steam sale - 8,257
Profit on trading of raw cotton 29.1 - 12,422
Duty drawback, rebates and others 360,104 29,911
Income from financial assets:

Capital gain on sale of investments 5,468 18,290
Dividend income 5,521 2,268
Profit on fixed deposits 1,625 2,952
Realised gain on revaluation of foreign currency loans 240 33,759
Unrealised gain on revaluation of foreign debtors 29.2 167,722 15
Realised gain on revaluation of foreign debtors 4,088 -
Unrealized gain on derivative financial instruments 14,891 1,533
Other income 76,638 102
654,869 124,080
29.1 (Loss) / Profit on trading of raw cotton

Sales
- Local 275,282 241,137
Less: Cost of goods sold

- Local (277,661) (228,715)
(2,379) 12,422

29.2 This arises due to devaluation of Pakistani Rupee against US Dollar as at the year end which
results in exchange gain on revaluation of foreign currency debtors.
2018 2017
30. DISTRIBUTION COST
Note Rupees in '000
Export
Ocean freight 265,826 216,121
Export development surcharge 33,339 32,184
Insurance expense 1,292 -
Other export charges 121,482 162,714
421,939 411,019
Local freight 90,766 80,260

Salaries and wages 30.1 45,545 41,785
Travelling and conveyance 10,445 11,996
Telephone and postage 13,392 12,825
Other 42,362 39,028
631,276 604,382
30.1 It includes staff retirement benefits of Rs. 3.08 million (2017 Rs. 2.25 million).
2018 2017
Note Rupees in '000
31. ADMINISTRATIVE EXPENSES

Salaries and benefits 31.1 176,630 156,619
Directors' remuneration 88,658 84,670
Meeting fees 349 265
Postage and telephone 11,632 10,912
Traveling and conveyance 8,939 10,229
Vehicles running 10,255 7,285
Printing and stationery 6,205 6,638
Utilities 10,172 12,906
Entertainment 3,127 3,455
Fees and subscription 21,277 18,878
Legal and professional 9,350 8,668
Charity and donations 31.2 1,548 1,245
Auditors' remuneration 31.3 3,626 3,025
Amortization 15.1 5,898 3,214
Advertisement 115 208
Others 7,924 5,123
449,745 417,385

31.1 It includes staff retirement benefits of Rs. 14.938 million (2017: Rs. 16.347 million).
31.2 None of the directors and their spouses have any interest in the donees fund. Each of these
donations does not exceed amount of Rs. 500,000.
2018 2017
Rupees in '000
31.3 Auditors' remuneration
Ernst & Young Ford Rhodes Sidat Hyder
Audit fee 1,455 950

1,607 1,020
Deloitte Yousuf Adil
Audit fee 1,600 1,600

Half year limited review fee 300 300
Fee for certifications 20 20
2,019 2,005
3,626 3,025
2018 2017
Note Rupees in '000
32. OTHER OPERATING EXPENSES
Workers' Profits Participation Fund 96,537 75,656

Workers' Welfare Fund 5,874 9,263
Loss on disposal of fixed assets - net 35,068 28,761
Exchange loss on foreign currency transactions - 865
Loss from trading of raw cotton 29.1 2,379 -
Unrealised loss on other financial assets 42,691 15,380
Unrealized loss on revaluation of short term borrowings 7,788 -
Others 20,799 8,216
211,136 138,141

33. FINANCE COST 2018 2017
Mark-up on: Rupees in '000
- long-term finance 71,041 67,558

- short-term borrowings 253,985 145,610
Discounting charges on letters of credit 8,488 6,493

Interest on Workers' Profits Participation Fund 445 569
Bank charges and commission 38,176 34,768
372,135 254,998
2018 2017
34. TAXATION Rupees in '000
Current 221,563 250,631

Prior (7,414) (13,021)
Deferred 12,674 79,772
226,823 317,382
34.1 The comparison of tax provisions as per individual of financial statements of group entities and tax
assesments for last three years is as follows:
Tax Tax
Provisions Assessments
Rupees in '000
Tax Year
2015 186,218 159,877

2016 184,713 169,667
2017 250,205 219,948
34.2. As per section 5A of the Income Tax Ordinance, 2001, a tax shall be imposed at a rate specified
therein on every Public Company other than scheduled bank or modaraba that derives profit for a
tax year but does not distribute a portion of its after tax profits (as per limit mentioned therein)
within six months of the end of the tax year through cash or bonus shares. As the Group has
made a profit for the current year, therefore the Group is required to pay tax on profit as mentioned
earlier. However, it is expected that the Group shall distribute profits of an amount to comply with
the requirement of section 5A of the Income Tax Ordinance, 2001, therefore, no provision for tax
on undistributed profit under section 5A of the Income Tax Ordinance, 2001 is recorded in these
consolidated financial statements for the year ended June 30, 2018.

2018 2017
Rupees in '000
34.3 Reconciliation between accounting profit and taxable income
Accounting profit before tax 2,008,520 1,352,727
Tax rate % 30% 31%
Tax on accounting profit 602,556 419,345
Effect of:
Income chargeable to tax at reduced rates (2,044) (109,028)

Prior year charge (7,414) (13,021)
Income that is not taxable in determining tax liability (28,162) -
Impact of permanent differences (5,918) (452)
Impact of super tax 24,803 23,829
Income chargeable to tax under FTR (317,270) (25,282)
Due to change in tax rate 16,626 60,250
Tax impact of tax credit (59,048) (38,259)
Tax charge for the year 224,129 317,382
35. EARNINGS PER SHARE - BASIC AND DILUTED
There is no dilutive effect on the basic earnings per share attributable to the shareholders of the
Holding Company, which is based on:
2018 2017
Profit for the year Rupees in '000 1,781,697 1,035,345
Weighted average number of ordinary

shares outstanding during the year No. of shares 18,073,732 18,073,732
Earnings per share - Basic and diluted (Rupees) Rupees 98.58 57.28

2018 2017
Note Rupees in '000
36. CASH GENERATED FROM OPERATIONS
Profit before taxation 2,008,520 1,352,727
Adjustments for:
Depreciation 14.1.1 1,011,809 1,038,549

Amortization 15 5,898 3,214
Provision for gratuity 9.2, 9.3 & 9.4 122,310 115,756
Unrealised loss on other financial assets 32 42,691 15,380
Unrealised gain on revaluation of export debtors (167,722) -
Unrealised gain on export debtors - (15)
Unrealised loss / (gain) on short term borrowings 7,787 (3,223)
Realised gain on export debtors 29. (4,088) (1,533)
Loss on disposal of operating fixed assets 35,068 28,761
Dividend income (5,521) (2,268)
Share of profit from associate 16.1 (4,492) (1,643)
Finance cost 33 372,135 254,998
Cash generated before working capital changes 3,424,395 2,800,703
Working capital changes:

(Increase) / decrease in current assets
Stores, spares and loose tools (51,464) 10,291
Stock-in-trade (834,405) (1,035,523)
Trade debts (3,002,484) (188,771)
Loans and advances (4,705) (53,447)
Trade deposits and short term prepayments 24,505 (17,958)
Other receivables (84,556) (16,520)
(3,953,109) (1,301,928)
Increase in current liability
Cash generated from operations 89,736 1,961,485
37. CASH AND CASH EQUIVALENTS
Cash and bank balances 26 272,696 286,212

Short-term borrowings 12 (6,541,667) (5,691,516)
(6,268,971) (5,405,304)

38. REMUNERATION TO CHIEF EXECUTIVE OFFICERS, EXECUTIVES AND DIRECTORS
The aggregate amounts charged in the accounts for remuneration, including all benefits to chief executive
officer, executives and directors of the Group are given below:
2018
Particulars Chief Directors
Executive Non- Executives Total
Executive
Officer Executive
------------------------------------------Rupees in '000--------------------------------------
Medical 1,046 1,618 - 2,673 5,337
Utilities 2,191 2,196 - 4,883 9,270
Travelling 1,840 - - 10,170 12,010
Entertainment 5 - - - 5
Vehicle running 323 - - 1,944 2,267
Rent - - - - -
Bonus and others - - - 8,978 8,978
Insurance 1,163 - - 1,387 2,550
Meeting fee 40 100 150 59 349
Total 31,173 57,626 150 258,227 347,176
2017
Particulars Chief Directors Executives Total
Executive Non-
Executive
Officers Executive
------------------------------------------Rupees in '000--------------------------------------

Medical 793 1,193 - 1,729 3,715
Utilities 2,078 2,174 - 3,524 7,776
Travelling 2,956 - - 11,436 14,392
Vehicle running 281 - - 1,379 1,660
Rent 851 - - - 851
Bonus and others - - - 9,152 9,152
Entertainment - - - - -
Meeting fee 40 100 90 35 265
Total 30,708 58,754 90 224,890 314,442

38.1 Group maintained cars and cellular phones are provided to Chief Executive Officers, directors and
executives.
38.2 Comparative figures have been restated to reflect changes in the description of executives as per
the Companies Act, 2017.
39. TRANSACTIONS WITH RELATED PARTIES
The related parties comprise of associate (Sunrays Textiles Mills Limited and Indus Heartland
Limited), entities with common directorship, key management personnel. The Group carries out
transactions with related parties on agreed terms. Remuneration of key management personnel is
disclosed in note 38 to the consolidated financial statements and amount payable in respect of
staff retirement benefits is disclosed in note 9. Significant transactions with related parties other
than those shown elsewhere in these consolidated financial statements, are as follows:
2018 2017
Relationship Nature of transactions Rupees in '000
Associate (shareholding : 0.99

percent), Sunrays Textile Mills Sale of yarn - 40,175
Limited Purchase of yarn 82,017 8,144
Conversion cost paid - 69,962
Director Lease rent expense 4,468
Balances with related parties
Associate - payable, Sunrays Textile Mills Limited 4,812 1,980

Associate - receivable, Sunrays Textile Mills Limited 62 -
Balances with other related parties due to

common directorship
Receivable from Indus Heartland Limited 213 -
Payable to:
Riaz Cotton Factory 1,917 1,917
Haji Mola Buksh Cotton Company 1,253 1,253
40. FINANCIAL RISK MANAGEMENT
The Board of Directors has overall responsibility for the establishment and oversight of the Group's
financial risk management. The responsibility includes developing and monitoring the Group's risk
management policies. To assist the Board in discharging its oversight responsibility, management
has been made responsible for identifying, monitoring and managing the Group's financial risk
exposures.

The Group’s principal financial liabilities comprise long-term financing, short-term borrowings, trade
and other payables, interest/dividend payable and financial guarantee contracts. The main purpose
of these financial liabilities is to raise finance for the Group’s operations. The Group has loans and
advances, trade and other receivables, cash and bank balances and deposits that arise directly
from its operations. The Group also holds long-term and short term investments.
The Group's activities expose it to a variety of financial risks: market risk (including currency risk,
fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk.
The Group's exposure to the risks associated with the financial instruments and the risk
management policies and procedures are summarized as follows:
40.1 Credit risk and concentration of credit risk
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and
cause the other party to incur a financial loss, without taking into account the fair value of any
collateral. Concentration of credit risk arises when a number of counter parties are engaged in
similar business activities or have similar economic features that would cause their ability to meet
contractual obligations to be similarly affected by changes in economic, political or other
conditions. Concentrations of credit risk indicate the relative sensitivity of the Group's performance
to developments affecting a particular industry. The Group's does not have any significant
exposure to customers from any single country or single customer.
Credit risk of the Group arises principally from the trade debts, loans and advances, other financial
assets (mutual funds) and bank balances. The carrying amount of financial assets represents the
maximum credit exposure. The maximum exposure to credit risk at the reporting date is as
follows:
2018 2017
Rupees in '000
Long-term deposits 15,475 14,757

Other financial assets 232,428 607,563
Trade debts 5,194,308 2,020,014
Loans to staff 39,353 26,966
Other receivables 114,384 35,567
Bank balances 263,115 275,274
5,863,365 2,991,926
Trade debts are due from foreign and local customers for export and local sales respectively.
Trade debts from foreign customers are secured against letters of credit. Management assesses
the credit quality of local and foreign customers, taking into account their financial position, past
experience and other factors.Though there are few past due trade debts, however, such are not
impaied as per management assessment.

Credit risk related to equity investments and cash deposits
The Group limits its exposure to credit risk of investments by only investing in listed mutual funds
units having good stock exchange rating. Credit risk from balances with banks and financial
institutions is managed by Finance Director in accordance with the Group's policy.
The credit risk on liquid funds (cash and bank balances) is limited because the counter parties are
banks with a reasonably high credit rating the names and credit rating of major banks where the
Company maintains its bank balances are as follows:
Name of bank Rating Credit rating Short-term

agency Long-term
Allied Bank Limited PACRA AAA A1+

Askari Bank Limited PACRA AA+ A1+
Bank Alfalah Limited JCR-VIS AA+ A1+
Bank Islami Pakistan Limited PACRA A+ A1
Bank Al-Habib Limited PACRA AA+ A1+
Dubai Islamic Bank (Pakistan) Limited JCR-VIS AA- A1
Faysal Bank Limited JCR-VIS AA A1+
Habib Bank Limited JCR-VIS AAA A1+
Habib Metropolitan Bank Limited PACRA AA+ A1+
Industrial and Commercial Bank of China Limited Moody's A1 P1
J.S Bank Limited PACRA AA- A1+
Meezan Bank Limited JCR-VIS AA+ A1+
MCB Bank Limited PACRA AAA A1+
National Bank of Pakistan JCR-VIS AAA A1+
Soneri Bank Limited PACRA AA- A1+
Standard Chartered Bank (Pakistan) Limited PACRA AAA A 1+
The Bank Of Punjab PACRA AA A 1+
United Bank Limited JCR-VIS AAA A 1+
40.2 Liquidity risk management

Liquidity risk is the risk that the Group will encounter difficulty in meeting obligations associated
with financial liabilities that are settled by delivering cash or another financial asset. Liquidity risk
arises because of the possibility that the Group could be required to pay its liabilities earlier than
expected or would have difficulty in raising funds to meet commitments associated with financial
liabilities as they fall due. The Group’s approach to managing liquidity is to ensure, as far as
possible, that it will always have sufficient liquidity to meet its liabilities when due, under both
normal and stressed conditions, without incurring unacceptable losses or risking damage to the
Group's reputation. The Group ensures that it has sufficient cash on demand to meet expected
working capital requirements. Following are the contractual maturities of financial liabilities,
including interest payments and excluding the impact of netting agreements:

40.2.1 Liquidity and interest risk table
The following tables displays the Group’s remaining contractual maturity for its non-derivative
financial liabilities. The tables have been drawn up based on the undiscounted cash flows of
financial liabilities based on the earliest date on which the Group can be required to pay.
Carrying Contractual Less than 1 1 to 3 3 months - 1

1-5 years
Values Cash flows month months year
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - R upe e s in '0 0 0 ' - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
June 30, 2018
Trade and other payables 2,240,155 2,280,567 25,777 897,988 642,864 713,937
Long-term financing 2,207,710 2,225,243 - - 394,567 1,830,676
Short term borrowings 6,541,667 6,541,667 909,868 - 5,631,799 -
Unclaimed dividend 11,080 11,080 - - - -
Interest / mark-up payable 65,406 65,406 13,489 44,631 7,286 -
11,066,018 11,123,963 949,134 942,619 6,676,516 2,544,613
C a rrying C o nt ra c t ua l Le s s t ha n 1 1 to 3 3 m o nt hs - 1
1- 5 ye a rs
V a lue s C a s h f lo ws m o nt h m o nt hs ye a r
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - R upe e s in '0 0 0 ' - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

June 30, 2017
Trade and other payables 1,713,682 1,720,008 3,905 1,295,949 413,828 -

Long-term financing 1,642,263 1,642,263 - - 448,442 1,193,821
Short term borrowings 5,691,516 5,691,516 621,559 - 5,069,957 -
Unclaimed dividend 6,326 6,326 - - - -
Interest / mark-up payable 53,005 53,005 - 53,005 - -
18,219,910 9,113,118 625,464 1,348,954 5,932,227 1,193,821
The effective rate of interests on non derivative financial liabilities are disclosed in respective notes.
The effective rate of interests on non derivative financial liabilities are disclosed in respective notes.
40.2.2 The exposure of the Group's borrowings to interest rate changes and the contractual repricing
dates at the balance sheet dates are as follows:
2018 2017
Rupees in '000
6 months or less
- Short-term borrowings 6,541,667 5,691,516

- Long-term loans 2,207,710 1,642,263

40.3 Market risk management
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest
rates and equity prices will affect the Group's income or the value of its holdings of financial
instruments. The objective of market risk management is to manage and control market risk
exposures within acceptable parameters while optimizing returns.
40.3.1 Interest rate risk management
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market interest rates. Majority of the interest rate risk arises from
long and short-term borrowings from financial institutions. At the balance sheet date the interest
rate risk profile of the Group's interest-bearing financial instruments is:
Carrying amount
2018 2017
Rupees in '000
Fixed rate instruments
Financial assets 23,019 15,327
Financial liabilities 1,922,835 1,015,245
Variable rate instruments

- KIBOR based 6,826,542 4,859,568
- LIBOR based - 1,458,966
Fair value sensitivity analysis for fixed rate instruments
The Group does not account for any fixed rate financial assets and liabilities. Therefore, a change
in interest rate at the reporting date would not affect profit and loss account.
Cash flow sensitivity analysis for variable rate instruments
If interest rates had been 50 basis points higher / lower and all other variables were held constant,
the Group's profit before tax for the year ended June 30, 2018 would decrease / increase by Rs.
34.132.71 million (2017: Rs. 31.593 million). This is mainly attributable to the Group's exposure to
interest rates on its variable rate borrowings determined on outstanding balance at year end.
40.3.2 Foreign exchange risk management
Exposure to currency risk

2018 2017
Rupees US Dollar Rupees US Dollar
Trade debts 4,201,258 34,607 933,467 8,890

Bank balances 19,894 176 16,313 156
Foreign currency loans (2,087,424) (17,195) (1,458,966) (13,895)
(2,067,530) 17,588 (509,186) (4,849)

2018 2017
Rupees
Average rate 113.15 104.73

Balance sheet date rate 121.40 105.00
Currency risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in foreign exchange rates. Currency risk arises mainly where
receivables and payables exist due to transactions entered into foreign currencies. The Group is
exposed to foreign currency risk on sales, purchases and borrowings, which, are entered in a
currency other than Pak Rupees. The Group enters into forward foreign exchange contracts to
cover its exposure to foreign currency sales and receivables.
At June 30, 2018, if the Rupee had weakened / strengthened by 5% against the US dollar with all
other variables held constant, profit for the year would have been higher / lower by Rs. 105.69
million (2017: Rs. 26.27 million) determined on the outstanding balance at year end.
40.3.3 Equity price risk management
The Group's listed securities are susceptible to market price risk arising from uncertainties about
future values of the investment securities. The Group manages the equity price risk through
diversification and placing limits on individual and total equity instruments. Reports on the equity
portfolio are submitted to the Group's senior management on a regular basis. The Group's Board of
Directors reviews and approves all equity investment decisions.
At the reporting date, the Group has exposure of Rs. 25.083 million (2017: Rs. 22.567 million) to
listed equity securities of an associate which is held for strategic rather than trading purpose.
At the reporting date, the exposure to listed equity securities at fair value was Rs. 82.78 million
(2017: Rs. 126.96 million). A decrease / increase of 5% on the PSX market index would have an
impact of approximately Rs. 4.14 million (2017: Rs. 6.35 million) determined based on market
value of investment at year end.
40.4 Financial instruments by category

Loan and Fair value
Total
Assets as per balance sheet & loss account
- June 30, 2018 - - - - - - - - - - - - - - - - - - Rupees in '000 - - - - - - - - - - - - -

Trade debts 5,194,308 - 5,194,308
Loans 39,353 - 39,353
Cash and Bank balances 272,696 - 272,696
5,640,518 315,213 5,955,731

Loan and Fair value

Total
& loss
Assets as per balance sheet account
- June 30, 2017 - - - - - - - - - - - - - - - - - - Rupees in '000 - - - - - - - - - -
Trade debts 2,020,014 - 2,020,014
Loans 26,966 - 26,966
Cash and Bank balances 286,212 - 286,212
2,395,301 734,521 3,129,822
Financial
liabilities
Total
measured at
Liabilities as per balance sheet amortized cost
- June 30, 2018 Rupees in '000

Trade and other payables 2,240,155 2,240,155
11,066,018 11,066,018
Financial
liabilities
measured at Total
Liabilities as per balance sheet amortized cost

- June 30, 2017 Rupees in '000

Trade and other payables 1,713,682 1,713,682
9,106,792 9,106,792

40.5 Fair value and categories of financial instruments
Fair value is the price that would be received to sell an asset or paid or transfer a liability in an orderly transaction
between market participants at measurement date.
Underlying the definition of fair value is the presumption that the Company is a going concern without any intention or
requirement to curtail materially the scale of its operations or to undertake a transaction on adverse terms.
The fair value of financial assets and liabilities traded in active markets i.e. listed equity shares are based on the quoted
market prices at the close of trading on the reporting date. The quoted market price used for financial assets held by the
Company is current bid price.
A financial instrument is regarded as quoted in an active market if quoted prices are readily and regularly availablefrom
an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and
regularly occurring market transactions on an arm’s length basis.
IFRS 13, 'Fair Value Measurements' requires the Company to classify fair value measurements using a fair value
hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the
following levels:
- Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).
- Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that
is, as prices) or indirectly (that is, derived from prices) (level 2).
- Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3).
The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their
levels in the fair value hierarchy :
Fair Value Loans and Am ortized Total Level 1 Level 2 Level 3 Total
through advances cost
profit and
loss account
- held-for-
trading
--------------------------------------------------------------------- June 30, 2018---------------------------------------------------------
------------------------------------------------------------------------ '(Rupees in '000)----------------------------------------------------
Financial assets
measured at fair value
Other financial assets 315,213 - - 315,213 315,213 - - -
Financial assets not

----------------------------- June 30, 2018 ---------------------------
----------------------------- (Rupees in '000) ---------------------------
Long term deposits - 15,475 - 15,475

Trade debts - 5,194,308 - 5,194,308
Loans - 39,353 - 39,353
Bank balances - 272,696 - 272,696
- 5,640,518 - 5,640,518


Fair Value Loans and Amortized Total Level 1 Level 2 Level 3 Total
through
profit and advances cost
loss account
- held-for-
trading
Financial liabilities not

measured at fair value --------------------------- June 30, 2018 ---------------------
--------------------------- (Rupees in '000) -----------------
Long term financing - - 2,207,710 2,207,710

Trade and other payables - - 2,240,155 2,240,155
Unclaimed dividend - - 11,080 11,080
- - 11,066,018 11,066,018
-------------------------------------------------------------------- June 30, 2017-------------------------------------------------------

through
profit and advances cost
loss account
- held-for-
trading
-------------------------------------------------------------------- '(Rupees in '000)-------------------------------------------------
Financial assets
Other financial assets 734,521 - - 734,521 734,521 734,521

Financial assets not
------------------------- June 30, 2017 ----------------------
------------------------ (Rupees in '000) --------------------
Long term deposits - 14,757 - 14,757

Trade debts - 2,020,014 - 2,020,014
Loans - 26,966 - 26,966
Bank balances - 286,212 - 286,212
- 2,395,301 - 2,395,301

through advances cost
profit and
loss account
- held-for-
trading
Financial liabilities not
---------------------------- June 30, 2017 --------------------
---------------------------- (Rupees in '000) -----------------
Long term financing - - 1,642,263 1,642,263

Trade and other payables - - 1,713,682 1,713,682
Unclaimed dividend - - 6,326 6,326
- - 9,106,792 9,106,792

41. CAPITAL RISK MANAGEMENT

The objective of the Holding Company when managing capital, i.e., its shareholders' equity is to
safeguard its ability to continue as a going concern so that it can continue to provide returns for
shareholders and benefits for other stakeholders; and to maintain a strong capital base to support
the sustained development of its businesses.
The Holding Company manages its capital structure by monitoring return on net assets and
makes adjustments to it in the light of changes in economic conditions. In order to maintain or
adjust the capital structure, the Holding Company may adjust the amount of dividend paid to
shareholders or issue new shares.
Consistent with others in the industry, the Holding Company monitors capital on the basis of the
gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as
total borrowings (including ‘current and non-current borrowings’ as shown in the balance sheet)
less cash and cash equivalents. Total capital is calculated as ‘equity’ as shown in the balance
sheet plus net debt.
The gearing ratios at June 30, 2018 and 2017 were as follows:
2018 2017
Rupees in '000
Total borrowings (note 8 & 12) 8,749,377 7,333,779

Less: cash and bank balances (note 26) (272,696) (286,212)
Net debt 8,476,681 7,047,567

Total equity 13,509,269 11,966,431
Total capital 21,985,950 19,013,998
Gearing ratio 39% 37%
There is no significant change in the gearing ratio of the Group as compared to the last year.
2018 2017
42. CAPACITY AND PRODUCTION Rupees in '000
Spinning units
Total number of spindles installed 203,856 203,856
Total number of spindles worked per annum (average) 201,308 201,608
Number of shifts worked per day 3 3
Installed capacity of yarn converted into

20 counts based on 365 days (lbs.) 145,192,073 145,211,782
Actual production for the year after conversion into 20 counts (lbs.) 127,575,023 131,375,255
Ginning units
Installed capacity to produce cotton bales 72,999 72,999
Actual production of cotton bales - 11,918
Number of shifts - 1
Capacity attained in (%) 0% 17%

2018 2017
Weaving unit Lbs Lbs
Normal capacity - Weaving 40,953,000 40,953,000
Actual Production - Weaving 24,011,631 23,805,425
It is difficult to describe precisely the production capacity in spinning unit since it fluctuates widely
depending on various factors such as count of yarn spun, spindles speed and twist etc. It also
varies according to the pattern of production adopted in a particular year.
The reason for shortfall in the production of cotton bales is limited availability of raw cotton.
43. NUMBER OF EMPLOYEES

No. of employees
2018 2017
Average number of employees during the year 7,686 4,268
Number of employees as at June 30 9,884 5,698
Number of factory employees as at June 30 5,063 5,499
43.1 Daily wage employees are not included in above number of employees.
44. SEGMENT REPORTING
The Group's core business is manufacturing and sale of yarn and it generates more than 90% of
its revenue and profit from the production and sale of yarn. Decision making process is centralized
at head office led by Chief Executive Officer who is continuously involved in day to day operations
and regularly reviews operating results and assesses its performance and makes necessary
decisions about resources to be allocated to the segments. Currently the Group has five yarn
manufacturing units at Hyderabad, Karachi, Muzafargarh, Faisalabad and Lahore. Owing to the
similarity in nature of the products and services, nature of the production processes, type or class
of customers for the products and services, the methods used to distribute the products and the
nature of the regulatory environment, all the yarn producing units are aggregated into a single
operating segment and the Group's performance is evaluated by the management on an overall
basis, therefore these operational segments by location are not separately reportable segments.
The Group also has two ginning units including one on leasing arrangement in District Multan. The
Group also holds investments in equity shares of listed companies, long-term strategic
investments in an associated company results of which are disclosed in note 16.1 to these
consolidated financial statements.
45. SUBSEQUENT EVENT
The Board of Directors proposed a final dividend for the year ended June 30, 2018 of Rs. 16 per
share (2017: Rs. 13 per share) at their meeting held on October 5, 2018 for approval of members
at the Annual General Meeting. These financial statements do not reflect this dividend payable
which will be accounted for in the year in which it is approved.

46. DATE OF AUTHORIZATION FOR ISSUE
These consolidated financial statements have been authorized for issue on October 05,2018 by
the Board of Directors of the Group.
47. CORRESPONDING FIGURES
Corresponding figures have been rearranged or reclassified, where necessary, for the purpose of
better presentation. No significant rearrangement or reclassification was made in these financial
statements during the current yearexcept that (i) unclaimed dividend as at June 30, 2017
amounting to Rs. 6.326 million previously disclosed under 'Trade and other payables' are now
disclosed on the face of the statement of financial position to comply with requirement of Fourth
Schedule to the Companies Act, 2017.
48. GENERAL
Figures have been rounded off to the nearest thousand rupees.








FO RM O F P RO X Y
61st nnual General ee�ng

IN DU S DY E IN G & M A N U FA CTU RIN G CO M P A N Y LIM ITE D
I / W e ---------------------------------------------------------------------------------------------------------- of
------------------------------------------------------------------------------------------------- in the district of ---------
------------- eing a member (s) of I N D U S D Y E I N G & M A N U F A C T U R IN G C O M P A N Y L IM IT E D hereby
appoint ----------------------------------------------------------------------- of ------------------------------------------
-----------------as my proxy and failing him ----------------------------------------------------of ------------------
--------------- another ember of the Company to ote for me and on my behalf at the 61St A nnual
General eeting of the company to be held on the 27th day of ctober 8 and at my
ad ournment thereof
igned by the said ember

igned this day of 8
SIGN E D IN TH E P RE SE N CE O F:
ignature ----------------------------------------- ignature --------------------------------
Name ------------------------------------------------ Name -------------------------------------
A ddress::--------------------------------------------- A ddress:----------------------------------
CN IC/ P assport N o---------------------------------- CN IC/ P assport N o:---------------------
For alternate
nforma�on required or ember or Proxy
Proxy( )
( hareholder)
Number of shares held (if member)
olio No
Par�cipant D
CDC
A ccount
ccount no
No

N o te s :
1. A member entitled to attend and vote at Annual General Meeting is entitled to appoint a proxy
to attend and vote instead of him/her. A proxy need not be a member.
2. This proxy Form, duly completed and signed, together with Board Resolution / power of
Attorney, if any under which it is signed or a notarially certified copy thereof, should be
deposited, with our Registrar, Jwaffs Registrar Services (Pvt.) Ltd. 407-408, Al Ammera
Centre Sharah Iraq, Saddar Karachi. Telephone No. 35662023 -24, not later than 48 hours
before the time of holding the meeting.
3. The instrument appointing a proxy should be signed by the member or his/her attorney duly
authorized in writing. If the member is a corporate entity its common seal should be affixed on
the instrument.
4. Any alteration made in this instrument of proxy should be initialed by the person who signs it.
5. Attested copies CNIC or the passport of the beneficial owner and proxy shall be provided with
the proxy from.
6. If a member appoints more than one proxy and more than one instruments of proxies are
deposited by a member with the company, all such instruments of proxy shall be rendered
invalid.
7. In the case of joint holders the vote of the senior who tenders a vote whether in person or by
proxy will be accepted to the exclusion of the votes of the other joint holders, and for this
purpose seniority will be determined by the order in which the names stand in the Register for
Members.
The proxy shall produce his / her original CNIC passport at the time of the meeting
A FFIX
CO RRE CT
P O STA GE
The Company ecretary

ND D E NG N C NG C L D
5th loor eaumont Pla a eaumont oad
Ci il Lines trs arachi

D IV ID E N D M A N D A T E F O R M
The Company ecretary
ub ect an account details for payment of Di idend through electronic mode
Dear ir
I/ w e/ M essrs being the

shareholder(s) of ndus Dyeing anufacturing Company Limited the Company hereby authori e the Company
to directly credit cash di idend declared by it my ban account as detailed belo
(i) Shareholder’ s details:

Name of the hareholder
CDC Par�cipant D ub- ccount No / CDC
CN IC/ N ICO P / Passport/N N No (Please a ach copy)
Contact Number (landline Cell Nos )
Shareholder’ s A ddress
(ii) hareholder s an account details
itle of an ccount
N (see Note belo )
an s Name
ranch Name Code No
B ranch A ddress
It is stated that the abo e par�culars gi en by me are correct and shall eep the Company informed in case of any
changes in the said par�culars in future
ours incerely
ignature f Shareholder
(P lease affix Company stamp in case of corporate en�ty)
N otes:
(i) Please pro ide complete N a�er chec ing ith your concerned branch to enable electronic credit directly
into your ban account
(ii) his le er must be sent to shareholder s par�cipant/CDC n estor ccount er ices hich maintains his/ her
CDC account for incorpora�on of ban s account details for credit of cash di idend declared by the Company
from �me to �me

AFFIX
CORRECT
POSTAGE
The company Secretary

INDUS DYEING & MANUFACTURING CO. LTD.
5th Floor 508 Beaumont Plaza Beaumont Road
Civil Lines Qtrs Karachi

Indus 2018 PDF

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Indus 2018 PDF

Uploaded by

Copyright:

Available Formats

Annual Report

Vision and mission statement 04

Key operating and financial results 12

Pattern of holding of shares 13

Statement of compliance with the Code of Corporate Governance 17

Notice of annual general meeting 18

Review report to the members on statement of compliance

with best practices of Code of Corporate Governance 22

Statement of Financial Position 27

Statement of Profit & loss 28

Statement of other comprehensive income 29

Statement of changes in equity 30

Cash flow statement 31

Notes to the financial statement 32

Directors' review (Urdu) 149

Chairman's review (Urdu) 150

Form of proxy 151

Dividend mandate form 153

Annual Report 2018 01

Human resource and remuneration committee

Group Chief financial officer

Chief financial officer

Chief Internal auditor

02 Annual Report 2018

Symbol of the company IDYM

Registrar & Share Transfer Office

2 Plot # 3 & 7, Sector - 25, Tel. 021- 35061577 - 9

3 Muzaffergarh, Bagga Sher, Tel. 0662 - 490202 - 205

4 Indus Lyallpur Limited. Tel. 041 - 4689235 - 6

5 Indus Home Limited. Tel. 042 - 35385021 - 7

Annual Report 2018 03

INDUS DYEING & MFG. CO. LIMITED

To be leading and diversified company, offering a wide range of

We aim to provide superior products, Financial security, performance

04 Annual Report 2018

Review of the Boards Performance

October 05, 2018 Chairman

Mian Mohammad Ahmed

Annual Report 2018 05

The consolidated financial highlights of the Company are as under:

For the Year For the Year

06 Annual Report 2018

Annual Report 2018 07

CORPORATE SOCIAL RESPONSIBILITY

POST BALANCE SHEET EVENTS

RELATED PARTY TRANSACTION

CORPORATE GOVERNANCE, FINANCIAL REPORTING AND INTERANAL CONTROL SYSTEM

We are pleased to report that:

• Proper books of accounts of the company have been maintained.

08 Annual Report 2018

Name of Directors Eligibility Attended

Mian Shahzad Ahmed (Chief Executive) 5 5

Mr. Riaz Ahmed 5 3

Mr. Naveed Ahmed 5 5

Mian Imran Ahmed 5 3

Mr. Kashif Riaz 5 4

Mr. Irfan Ahmed 5 5

Mr. Shahwaiz Ahmed 5 5

Mr. Shafqat Masood 5 5

Mr. Sheikh Nishat Ahmed 5 5

Mr. Farooq Hassan (Nominee NIT) 5 5

Annual Report 2018 09