202863

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TOMORROW
Over the course of the last year, we saw the seed of
perseverance grow in the midst of macroeconomic
challenges. This seed reflects our passion for
sustainable growth. While the times have been
challenging, we at FFL, have continued to invest in
our operational processes; strategically expanding
our sales and distribution network and ensuring a
lasting route-to-market connection.
Our cover this year reflects this enduring transition.

We have worked hard to adapt to the changing
environment; synchronizing efforts internally to
create a structure of improved digitalization and
innovation. This has helped us overcome the
prevailing unfavorable conditions and achieve
renewed growth during the last quarter of 2022.
Just as a seed grows to become a mighty tree,

FFL roots are dug deep into the dairy market
strengthening its resolve towards creating a better
tomorrow for all.
CONTENTS
04 05 06 08 11 12 36 40 62 63 66 68
Vision Core Values Our Heritage Turnaround Corporate Board of Financial Product Portfolio Auditor’s Auditor’s Report Statement of Statement of
Strategy Information Directors Performance Review Report to the Members Financial Position Profit or Loss
on Corporate
Governance
18 20 22 24 26 34 69 70 71 72 119 128
Chairman’s CEO’s Message Leadership Team Notice of Annual Directors’ Report Statement of Statement of Statement of Cash Flow Notes to the Pattern of Directors’ Report
Message General Meeting in English Compliance Comprehensive Changes in Statement Financial Shareholding in Urdu
in English Income Equity Statements
130 131 133

Notice of Annual Form of Proxy in Form of Proxy in
General Meeting English Urdu
in Urdu
CORE
VALUES
VISION We Spread Happiness
TRANSFORMING LIVES Happiness lies at the heart of our business. Collectively as Fauji Foods, and individually as a
THROUGH NOURISHMENT
unique part of a community, we work towards understanding the needs of our stakeholders
and developing a culture that helps fulfil them, so we can bring our wholesome goal of
spreading happiness full-circle.
We Innovate
We embrace innovation. Success isn’t an overnight achievement and certainly not one without
risks. Hence, we keep attempting to do the impossible with the consistent pursuit of going the
extra mile.
We are Caring
We care about our community from the get go. Be it our hard-working farming partners,
our cherished customers, diligent employees or our valuable investors, our goal is to build
relationships based on empathy and trust.
We are Agile
Our constant focus on research and development helps us stay abreast of all that is changing,
be it technology, or the needs of our stakeholders. We consistently work on making sure that
we are the best at doing what we do.
We Synergize
We’re one of the biggest players in the market and we steadily grow bigger every day. That’s
why we recognize the impact we have on our community and make sure that our foot print is
a positive one. Hence, apart from our philanthropic efforts, we make sure to connect with key
stakeholders to ensure that we always work towards the same greater goal: transforming lives
for the better.
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TOMORROW Annual Report 2022 05
OUR
Under the umbrella of the Fauji Group of Companies, with major
shareholding by FFBL – Fauji Foods Limited was founded in 2015 after the
acquisition of Noon Pakistan Limited, a company with an over 50-year
dairy legacy in Pakistan.
HERITAGE
In February 2016, Fauji Foods introduced a new brand for the masses by the name of Dostea. Dostea is a liquid tea
whitener which renders the perfect taste and colour you require from your daily cup of tea.
Founded in 1966, the Company’s brand Nurpur has been a household name across generations. After the
acquisition, Fauji Foods relaunched the House of Nurpur in May 2016, thus reviving an age-old tradition of
wholesome quality.
The House of Nurpur, renowned for its Butter in Pakistan is also gaining traction across its consumer base for other
wholesome additions to its product range.
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06 TOMORROW Annual Report 2022 07
TURNAROUND STRATEGY
Portfolio Sustainable Route to

Margin Accretive Growth Pivot Growth Market
57% to 68% 44% 30,000+

(2021 Vs 2022) Revenue Growth Stores
Value Portfolio
Contribution
89% 68%
UHT Value Growth
2X
Growth in
Distribution Network
Institutional Sales
Energy Mix Packaging

Sustainability / Cost Saving Opitimization
Efficiency
Localization
1 MW 170 Million+ 1500 ml

Investment in Saved through Process Conversion from
Solar Power Optimization Imported to Local
Packmat
BioFuel 50%
Steam Production Reduction in Receivables
Converted from Coal
Talent
Fit for Future Capability Automation Processes
Backbone
100% Integrated Business

Planning from
86%
Sales Distribution Automated Grass to Glass Employee Retention Rate
Milk Collection Business Process Employee Training &
Automation in Process Mapping to Improve Development - Reward &
SAP Efficiency Recognization Program
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CORPORATE INFORMATION
Board of Directors Audit Committee Chief Executive
*Mr. Waqar Ahmed Malik Mr. Javed Kureishi Officer
Chairman Chairman
Mr. Usman Zaheer Ahmad
Syed Bakhtiyar Kazmi
**Mr. Sarfaraz Ahmed Rehman
Mr. Basharat Ahmad Bhatti
Mr. Arif ur Rehman Dr. Nadeem Inayat Chief Financial
Dr. Nadeem Inayat **** Officer
Syed Bakhtiyar Kazmi HR&R Committee
Mr. Waseem Haider
Ms. Tania Shahid Aidrus
Mr. Ali Asrar Hossain Aga
Mr. Ali Asrar Hossain Aga Chairman
Company
Mr. Basharat Ahmad Bhatti Dr. Nadeem Inayat
Ms. Tania Shahid Aidrus Secretary
***Mr. Imran Husain
Mr. Arif ur Rehman
Mr. Javed Kureishi Brig Hamid Mahmood Dar
**** SI(M), (Retd)
Operation
and Business Auditors
Committee EY Ford Rhodes
Chartered Accountants
Mr. Sarfaraz Ahmed Rehman
Chairman

Legal Advisers
Mr. Ali Asrar Hossain Aga Mr. Khurram Raza
Advocate Supreme Court
Shares Registrar
M/s Corplink (Pvt.) Limited
Website
Wings Arcade, 1-K, Commercial, www.faujifoods.com
Model Town, Lahore.
Tel: +92-42-35916714, 35916719,
35839182 Bankers
Fax: +92-42-35869037
Habib Bank Limited
E-mail: shares@corplink.com.pk
United Bank Limited
National Bank of Pakistan
Registered Office Bank Alfalah Limited
Faysal Bank Limited
42 CCA, Ex-Park View, MCB Bank Limited
DHA Phase – VIII, Lahore. Askari Bank Limited
Tel: +92-42-37136315-17 Allied Bank Limited
E-mail: info@faujifoods.com Bank AL Habib Limited
Dubai Islamic Bank Pakistan Limited
Plant Soneri Bank Limited
JS Bank Limited
Bhalwal, District Sargodha. Al Baraka Bank (Pakistan) Limited
HBL Microfinance Bank Limited
*Appointed/Elected as Director/Chairman w.e.f. January 26, 2023

**Resigned as Chairman of the Board w.e.f. January 25, 2023.
***Resigned as Director from the Board w.e.f. January 25, 2023.
****Reconstituted on January 26, 2023.
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Mr. Waqar Ahmed Malik Mr. Sarfaraz Ahmed Rehman
Chairman/Director Director
Mr. Waqar Ahmed Malik has joined Board of Fauji Foods Limited on January 26, Mr. Sarfaraz, a chartered accountant by qualification, has contributed management
2023. Mr. Waqar Ahmed Malik’s corporate and business experience spans over 30 expertise to several multinational companies such as Unilever, SB (GSK), Jardine
years across three continents. He is a fellow of the Institute of Chartered Accountants Matheson / Olayan JV and PepsiCo during his varied career.
in England and Wales and is also an alumnus of the Harvard Business School and
In 2005, Sarfaraz established Engro Foods as its CEO. The company grew from a
INSEAD.
green-field to become the leading liquid dairy company in Pakistan. Engro Foods
Earlier, his career with The ICI Plc Group based in the UK spanned over 27 years became the only Pakistani company to receive the ‘G20 Top 15 Company’ award.
and then later with Akzo Nobel N.V. based in The Netherlands. He has also been the In 2012, he took a sabbatical from Engro Foods to establish the Karachi School for
Chief Executive Officer of ICI Pakistan Limited and the Chief Executive Officer and Business and Leadership. Sarfaraz rejoined Engro Foods as CEO in 2013, where he
Chairman of Lotte Pakistan Limited (formerly Pakistan PTA Limited). During his career remained till 2015.
with ICI and Akzo Nobel, he worked in Europe and Americas’ in Corporate Finance
Since Oct 2015, he has been involved in consultancy projects, among others with ICI,
and Strategy.
IBL, JSPE, Shan Foods, Al-Shaheer (Meat One), Soya Supreme, Burque Corp, CCL
Mr. Waqar Ahmed Malik joined Fauji Foundation as Managing Director and Chief and ITL.
Executive Officer on 9th April 2020. Presently, he is serving as Chairman on the
Mr. Sarfaraz was contracted to Grant Thornton for 2016-17 as an executive coach
Boards of following Fauji Group Companies:-
during a culture change project at UBL. He conducts a well-established coaching
• Mari Petroleum Company Ltd / mentoring role, with business executives and university graduates. Sarfaraz has
• Askari Cement Ltd coached for Careem, Gatron-Novatex, Engro, ICI, Descon, PPL, UBL and City School.
• FFC Energy Ltd
Mr. Sarfaraz was Chairman of the Broadcasters / Advertisers Council 2015-18 (joint
• FFBL Power Company Ltd
body controlling advertising in Pakistan). Further, he was the Chairman of the 1st
• Fauji Fertilizer Company Ltd
Effie Awards in Pakistan, in 2019. He is also on the Board of MAP and Patient Aid
• Fauji Akbar Portia Marine Terminal Ltd
Foundation.
• Foundation Wind Energy-I & II Ltd
• Foundation Solar Energy (Private) Ltd Mr. Sarfaraz joined Fauji Group in June 2020 as MD&CEO of Fauji Fertilizer Bin Qasim
• Fauji Fertilizer Bin Qasim Ltd Limited (FFBL) till October 2021. During his short stay in FFBL, his innovations and
• Fauji Foods Ltd effective business strategy led to turnaround of FFBL making it a profitable entity.
• Fauji Oil Terminal & Distribution Co Ltd
• Foundation Power Company Daharki Ltd Additionally, Sarfaraz speaks at various forums. He has given motivational talks at
• Daharki Power Holdings Ltd Laye’s, Mondelez, Nutrico, RB, Engro, Octara, ICI, Shell, MAP etc. At universities,
• Fauji Cement Company Ltd colleges, schools and on media occasions he holds climate change talks / sessions
• Fauji Trans Terminal Ltd to create awareness.
• Fauji Kabir Wala Power Company Ltd Sarfaraz is deeply interested in playing his part in giving back to society and has
• Fauji Fresh n Freeze Ltd worked on an online interactive education model for mass education, to resolve the
BOARD OF
• Fauji Infraavest Foods Ltd issue of literacy in Pakistan over the next decade. In the past he was associated with
• Askari Bank Ltd Shaukat Khanum Hospital as a Board of Governor and with WWF as a Director. He is
also associated with Hisaar Foundation and its work on water / environmental issues
He is also Chairman of Pakistan Oxygen Limited (formally Linde Pakistan, a subsidiary in Pakistan.
of Linde AG) acquired by Adira Capital Holdings (Private) that he co-founded. Mr.
Malik is a non-executive Member of the Board of JAZZ Pakistan which is a subsidiary Mr. Sarfaraz Ahmed Rehman has been appointed as Managing Director & Chief
of Veon Limited. Executive Officer of FFC, FFCEL and FFFL w.e.f October 16, 2021.
DIRECTORS
He played an instrumental role in development of Pakistan’s Regulatory System as
well as for the advocacy to undertake economic reforms. Earlier he served as:-
• Director – State Bank of Pakistan (Central Bank of Pakistan)

• President – Overseas Chamber of Commerce & Industry (OICCI)
• President – Management Association of Pakistan (MAP)
• Director – Pakistan Business Council (PBC)
Mr. Malik is a former member of the visiting faculty of Pakistan Institute of Corporate
Governance, Former Member of Board of Governors of Lahore University of
Management Science (LUMS) and Former Member of Board of Indus Valley School
Leading the Example of Arts.
A trustee of Duke of Edinburgh Trust Pakistan, he was awarded Prince of Wales Medal
as a Trustee of the Prince of Wales Pakistan Recovery for the Flood Victims in 2010.
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Mr. Arif ur Rehman Dr. Nadeem Inayat Syed Bakhtiyar Kazmi Mr. Ali Asrar Hossain Aga
Director Director Director Independent Director
Mr. Arif started his professional career from Fauji Fertilizer Co (FFC) where he initially Dr. Nadeem Inayat is the Senior Director Strategy and Merger & Acquisitions at Fauji Mr. Kazmi is a fellow chartered accountant with over 35 years of experience in a Mr. Ali A. Aga has over 38 years of multi industry experience in a wide range of
worked as Process Engineer in the Ammonia, Urea and Utilities plants. Later on Foundation and holds directorship on the Board of following companies along with diverse range of sectoral and functional strata within national and regional economies. management positions in General Management, Marketing, Human Resource
he worked as Process Engineering In-charge, Operations Engineer-Ammonia and Fauji Foods Limited: The key areas of his specialization are fiscal policy and macroeconomic research, Management, Corporate Affairs, Operations and Supply Chain Management in ICI
Ammonia DBN Commissioning Engineer. In mid-1994, his services were transferred to greenfield and brownfield projects, strategic collaborations, mergers and acquisitions, Pakistan as well as German company Hoechst and other national Companies.
• Askari Bank Limited
FJFC (now FFBL) project team. He worked at FJFC for about 3 years and was a part outliers in accounting and finance, strategic level audit and assurance and tax
• Askari Cement Limited He is currently the Managing partner Middle East – South Asia & Chief Executive
of the multidisciplinary team that developed the FJFC Project from inception to firm reforms and strategic level advisory. He holds directorship on the Boards of following
• Daharki Power Holdings Limited Pakistan for Ward Howell International, a global Leadership & Management consulting
order placement. He led the engineering and improvement of the Ammonia Plant. For companies along with Fauji Foods Limited:
• Fauji Akbar Portia Marine Terminals Limited company. Prior to his involvement with Ward Howell in 2014, he was working with
that project he remained in USA for about a year as Ammonia Plant Lead.
• Fauji Cement Company Limited • Askari Bank Limited Pakistan’s leading company ICI where he worked for almost 25 years in various senior
In 1996, he joined ICI Pakistan’s PTA Business, which was the first and is still the only • Fauji Electric Power Company Limited - Chairman • Askari Cement Limited positions. He was appointed the Chief Executive of ICI Pakistan & Chairman of ICI
PTA plant in Pakistan with new technology. He worked as the commissioning leader • Fauji Fertilizer Bin Qasim Limited • Daharki Power Holding Company Limited Pakistan Power Gen Limited during the transition period of ICI Pakistan’s ownership
for the most complex, Oxidation Plant. Later on he led all the remaining sections of • Fauji Fertilizer Company Limited • Fauji Akbar Portia Marine Terminals Limited from Akzo Nobel Netherlands to the YB Group in Pakistan in 2013. He also held the
the PTA plant (Purification and Utilities) and took over as the first local Production • Fauji Fresh n Freeze Limited • Fauji Cement Company Limited position of a Director on the Board of ICI Pakistan and worked as Vice President &
Manager for the PTA Business in 2001. Later on he worked as Technical Services & • Fauji Infraavest Foods Limited • Fauji Fertilizer Bin Qasim Limited Managing Director of ICI’s flagship Soda Ash Business from 2008 to 2014. He has
DBN Manager and was appointed as Site Operations Manager in 2005, where he was • Fauji Kabirwala Power Company Limited • Fauji Fertilizer Company Limited also served as General Manager Human Resource for the ICI Group in Pakistan from
responsible for Operations, Maintenance, Inspection and Materials Management. • Fauji Meat Limited • Fauji Fresh n Freeze Limited 2004 to 2008 and looked after HR for the ICI group in Pakistan and Middle East,
• Fauji Oil Terminal & Distribution Company Limited • Fauji Infraavest Foods Limited and was also responsible for leadership development programs for the Regional &
In 2007 he joined the Fatima Group as Project Director and led the USD 750 Million
• Fauji Trans Terminal Limited • Fauji Kabirwala Power Company Limited Industrial Business of ICI plc globally.
Project from ground breaking till its commissioning. This was a green field project
• Foundation Power Company Daharaki Limited • Fauji Oil Terminal & Distribution Company Limited
comprising of Ammonia, Urea, NP, CAN, Nitric Acid, Utilities and related facilities. One Ali Aga has also served as a Director on the Boards of Pakistan PTA Ltd, Akzo Nobel
• Foundation Wind Energy-I & II Limited • Fauji Trans Terminal Limited
of the salient features of the job was that it was a self-managed EPC Project. Arif was Pakistan Limited, ICI Power Gen Ltd, and Pakistan Society for Training & Development.
• Mari Petroleum Company Limited • FFC Energy Limited
engaged with dozens of international contractors directly and completed the project He is a Certified Director and Accredited Trainer on Corporate Governance by IFC and
• Pakistan Maroc Phosphore S.A. • Foundation Power Company Daharki Limited
successfully in 2011. Pakistan Institute of Corporate Governance (PICG), and a visiting Faculty for PICG’s
• The Hub Power Company Limited - Independent Director • Foundation Solar Energy Limited
Director’s training program.
After the commissioning of the project Arif was appointed its Director Operations. In • Foundation Wind Energy-I & II Limited
that role he brought the site to its full potential by a series of revamps that included Dr. Inayat holds a Doctorate in Economics and has over 28 years of diversified • Mari Petroleum Company Limited He is an Independent Director and Chairman of the Audit Committee and member
the plants and organizational and systems improvement. As a result the production experience in the corporate sector particularly in corporate governance, policy • Olive Technical Services (Private) Limited of HR & Remuneration Committee of the Board of Descon Oxychem Ltd., and has
increased from 0.8 to 1,475 Million tons per year and the bottom line improved from formulation, project appraisal, implementation, monitoring & evaluation, restructuring, served as Independent Director on the Boards of Public Sector Companies STEDEC
-PKR 2.0 Billion to +10 Billion. and collaboration with donor agencies. He also conducted various academic courses Mr. Kazmi served KPMG for 35 years; interacted with the leadership in almost every Technology Commercialization Corporation of Pakistan, Inland Water Transport
on Economics, International Trade and Finance at reputable institutions of higher industry, understanding their vision, their insights, and business strategies. His Company of Pakistan and Engineering Development Board. He is also involved in
In July 2016 he was appointed Chief Manufacturing Officer, based at the Head Office education in Pakistan. He is also a member of Pakistan Institute of Development rigorous exposure to a diverse range of sectors and projects, enabled him to conceive volunteer work in the field of management development and has served as the Vice
in Lahore with responsibility for all aspects of manufacturing for the Fatima Group’s Economics. and culminate strategic value additions for his clients. He successfully implemented Chairman of the Lahore Chapter of Management Association of Pakistan and a
three Fertilizer Manufacturing facilities, Fatima Fertilizers, Sadiqabad; Pak Arab a comprehensive service delivery framework that ensures quality assured service Council member of the Lahore Chapter of Marketing Association of Pakistan.
Fertilizer Company, Multan and Fatima Fertilizers, Lahore (Ex Dawood Hercules). He provision to KPMG’s clients. As an auditor and an advisor, Mr Kazmi successfully
has responsibility for Operations, Costs, Budgets and People aspects for all Fertilizers. delivered bestin-class and integrity driven services and branched into macroeconomic Ali Aga holds an MBA degree from Drexel University U.S.A and a BSc. (Engg.) in
In addition he is also responsible for the Supply Chain Function for the entire group research with a focus on contributing towards fiscal and regulatory policies of Chemical Engineering from University of the Punjab. He has attended the Advanced
where he controls the budget of about USD 200 Million per year, growth, sustainability Pakistan. He has served on a number of diverse forums / boards in the Private Sector, Management Program at Harvard Business School and has been a guest speaker at
and strategy of the FG; Fertilizer Business. Public Sector & Civil Society Organization. As a thinker, he actively spreads his various local and international conferences and seminars.
thoughts and ideas through his articles on national economics, business and taxation
mattes and issues, regularly published in reputable dailies.
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Mr. Imran Husain Mr. Javed Kureishi Mr. Basharat Ahmad Bhatti Ms. Tania Shahid Aidrus
Independent Director Independent Director Independent Director Independent Director
A diversified individual having 40 + years plus experience in Senior Leadership Mr. Javed is a seasoned, international banker having spent 34 years with Citibank. Mr. Basharat Ahmad has 40 + years diversified business experience, with the Ms. Tania envisions Pakistan as an emerging leader in technology and innovation in
assignments of Chief Executive Officer/ Managing Director, with a proven track record He has held a number of senior, leadership roles across corporate banking, country government and Country’s foremost Multinational Conglomerate – Unilever Pakistan, the rapidly evolving global digital landscape over the next decade. She served as an
of superior performance through teamwork, continued commitment & application of management, risk and public sector coverage. He worked for Citibank in 6 different engaged in manufacturing and marketing world class Fast Moving Consumer advisor to the Prime Minister of Pakistan where she put in place a framework for the
diversified skill set.
locations including Pakistan, Egypt, South Africa, Czech Republic, UAE and Singapore Products including Oils & Fats, Personal & House Cleaning Products, Beverages, Ice country’s digitization journey. During her time in this role, she architected the five pillar
The Professional traits include: Strategic Vision, Business intelligence, Leadership, where he spent the last 9 years before returning to Pakistan in oct 2019. His last cream & Frozen desserts. Digital Pakistan strategy for the country to move towards digitization rapidly.
Team development, Change management and effective execution. assignment was Head of Public Sector Senior Coverage Group for Asia Pacific
His practical experience includes Factory Operations, Industrial Relations, Distribution She also helped build Pakistan’s Covid-19 data driven-response strategy as part of
covering 14 countries. Javed has travelled extensively across the Asia Pacific and has
Professional Memberships & Logistics, Supply Chain Management, Sales & Sales Operations, Institutional the National Command and Operations Center (NCOC). Today, Pakistan is globally
a good working knowledge of the region.
Directorship: Business, Trade Marketing, Customer Relations, Corporate Regulatory Affairs, recognized for handling the COVID-19 pandemic, and data-driven interventions have
Mr. Javed is presently working for the IFC as an external consultant responsible for Negotiations, Corporate Social Responsibility, Corporate Communication, Interface played an important role in this response.
• TPL REIT Management Company Limited Senior client coverage and business origination. He is also on 3 other company with the Federal and Provincial Governments on Tariff Rationalization, Rules &
• Augere Limited (Netherlands) BV Prior to this appointment, Tania spent over a decade at Google in the US and
boards including the Pakistan Stock Exchange. Regulations and System & Procedures.
• Sharp Communications (Pvt) Limited Singapore where she was a Director of Product Management for Next Billion Users
• GSDCP (Pvt) Limited Mr. Javed has also been a keen cricketer. He captained Pakistan Under 19 in 1978-79 He has been assisting the Federal Government and Provincial Governments on and Payments. She was responsible for digitizing payments in emerging markets,
Augere Limited (Netherlands) BV on its tour of Sri Lanka and India. He also played first class Cricket for PIA, and Sind various projects like Formulation of Pure Food Rules, Standardization of Consumer particularly countries looking to take the leap from cash to digital and played a key
Global Advisor and represented Sussex under 25 and combined English Universities. Products at PSQCA, Negotiation on APTTA, Tariff rationalization at FBR, Ministry of role in the product strategy for the rollout of GPay across multiple countries. Tania also
2012 – To date Commerce and Ministry of Industry and Special Initiatives etc. started Google’s business in South Asia Frontier Markets (Bangladesh, Pakistan, Sri
He has a BA Hons from Sussex University UK and is married with 2 children.
International Business Strategist, Consultant and Global Advisor to Augere Limited, Lanka) and led those teams as the Country Manager. She co-founded a health-tech
Mr. Ahmad remained responsible for Training of Unilever Pakistan sales & general
a multinational engaged in developing Wireless Broadband in Pakistan, Bangladesh startup – ClickDiagnostics, and spent a portion of her career consulting for private and
and other countries under the brand name QUBEE. management for six years. In the capacity of Corporate Facilitator, Total Quality
public sector organizations at Booz Allen Hamilton. Tania holds an MBA from the MIT
Augere Limited (Netherlands) BV Management, he trained the management as well as Non-Management Staff along
Sloan School of Management and a BSc from Brandeis University
Global Director Services and Business Support with its practical implementation by process mapping, elimination of superfluous,
2008 – 2012 simplification of system and procedures, thus made the business cost effective in
Augere Pakistan Limited obtaining substantial positive results contributing to Company’s profitability.
Chief Executive Officer
2008 – 2008 In addition, Mr. Ahmad has 12 years teaching experience with various universities as
Grand Leisure Corporation Ltd (PLC) builders of Port Grand visiting faculty. His specializations are: Retailing, Sales Management, Supply Chain
Chief Executive Officer Management, Entrepreneurship, Consumer Behavior, TQM, Brand Management,
2003 – 2008 Marketing, Business Ethics, Industrial Marketing, Service Marketing, Integrated
Dannemann Fabrics Ltd (PLC), – Integrated Denim manufacture Marketing Communication, Advance Topic of Marketing, Customer Relations
Managing Director Management and Corporate Marketing for MS Management, EMBA and MBA classes.
1991 – 2001
Pangrio Sugar Mills Ltd (PLC) He authored a book on “Successful Retailing”.
Managing Director
1983 – 1995 Mr. Basharat Ahmad remained Vice Chairman & Director, Pakistan Dairy Association,
Spectrum Ltd (PLC) Director, Pakistan Halal Product Development Board, Executive Committee Member,
Managing Director Duke of Edinburg Award Pakistan, Member Pakistan Soap Manufacturers Association,
1977 – 1983 and Member Pakistan Tea Association.
Pakistan Fiat SpA, Italy
Country Advisor
1974 – 1977
Union Carbide Pakistan Limited
Economic Advisor
1972 -1974
Professional Advisory
• Member Prime Minister’s Task Force for Land Allocation – (2005 – 2006)
• Member Task Force Board of Investment Pakistan – (2003)
• Chairman Sind Development Forum Organizing Committee – (2003)
• Chairman Sindh Small Industries Corporation Reorganization Task Force – (2002)
• Chairman Sindhi Adabi Board, Task Force – (2002)
• Member Executive Committee Pakistan Sugar Mills Association – (1987 – 1989)
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CHAIRMAN’S
MESSAGE
Pakistan faced several challenges In 2022, the FFL Board successfully completed the
transition of leadership roles, and we would like to
in 2022 that had a considerable
acknowledge the invaluable services of our outgoing
impact on the nation’s economy, Chairman, Mr. Sarfaraz Ahmed Rehman, in the success of
including climate change-induced our company. As the Chairman, I will ensure that the Board
floods, animal disease, inflation, and takes all necessary steps that help us achieve long-term
currency devaluation, all of which sustainable growth for the company.
exacerbated the economic struggles
The Board has established several committees entrusted
caused by the earlier pandemic. with advisory and oversight functions, including the
recommendation of a strategic framework, strengthening
As the fourth largest milk producing country in the world, governance, guiding management to maximize resource
Pakistan contributes 50 million tons of milk annually, with utilization, improving capital structure, addressing
80% of the country’s total milk production coming from business risks, and monitoring progress to recommend
rural areas. However, the impact of climate change has backup plans to achieve our strategic goals. Governance-
caused significant concern among agriculturists and dairy related activities are a top priority, and our Directors
business experts, who fear that the loss of hundreds of actively seek feedback from subject matter experts before
thousands of animals in 2022 may lead to a 30% to 40% making critical decisions.
reduction in milk and meat production in the coming
periods which would lead to further inflationary pressures. The Board shall remain focused on providing strategic
direction and oversight to the Company for offering
Despite these setbacks, I am pleased to report that sustained returns to its shareholders, besides contributing
our company has forged ahead, with significant growth towards nutritional needs of the Country.
momentum observed through an increase in sales. This
was achieved through our focus on margin accretive
portfolio, cost-saving initiatives for sustainable business
practices, and the establishment of fit-for-the-future
organizational capabilities.
We recognize that our greatest strength lies in our

people, who have demonstrated remarkable resilience
during these challenging times. This has enabled us
to pursue sustainable business growth strategies and
drive innovation. By working together, we have become a
Waqar Ahmed Malik
Chairman
significant industry player dedicated to serving the people
of Pakistan. Our focus on human resource development
and corporate digitalization will continue to be a priority as
we work to create value for our shareholders and society.
We understand that the health of our organization is
intrinsically linked to the health of the society in which we
operate, and our sustainable business efforts in 2022 will
enable us to reduce our carbon footprint in the future.
18
CEO’S
MESSAGE
2022 stands out for the remarkable The loss after tax for the FY 2022 was PKR 2.168 bn;
where interest cost of PKR 1.2 bn constituted 57% of
changes to the world we operate in.
the total loss. Our sponsors have committed to inject an
The inflation, devaluation, floods, equity of PKR 11.7 billion via Other than Right Share issue.
country liquidity crisis and disruptive This will eliminate the debt overhang and rid the business
supply chain created a perfect storm of the interest cost that is a drag on the Company’s
for all businesses. Amidst all this, financial performance.
Fauji Foods Limited (FFL) embarked
FFL takes immense pride in its environment friendly
upon its own journey of change. policies. The twin projects of bio-fuel and solar will not
only reduce our carbon footprint but will also rationalize
The portfolio strategy was reimagined, Route to Market the energy cost. This, coupled with an in-depth cost
was redesigned and digitized, FFL invested in sustainable benchmarking shall yield certain cost-efficiency
and environment friendly energy mix and large strides opportunities. The management is confident that these
were made in developing capabilities in multiple areas of initiatives will yield close to PKR 1 bn. That in turn, will
business. As a result, despite the challenges, the revenue structurally improve the gross-margin leading to greater
grew by 44%, putting FFL on path of a sustainable, sustainability.
value-led growth. The revenue growth was driven by a
66% increase in Nurpur UHT milk volume, doubling the We feel that FFL is at the cusp of turning into a healthy,
institutional sales and distribution increase of 57%. growing business. While the inflationary pressure on the
industry will persist, it also presents a great opportunity
Inflationary pressure on the back of devaluation, to connect with our consumers and customers. It is
floods, and macro-economic uncertainty resulted in a this customer-centricity that allowed us to double our
50% increase in raw milk price and other major cost institutional business in 2022. With our partnership with
components. That in turn, eroded the margins by circa 7% international customers firmly in place, we expect the
in Q2 2022. localization trend to continue, strengthening FFL’s Food
Services business. Likewise, the redesigned Route to
The management’s timely decisions on pricing, deploying Market was pivotal in achieving volume growth as the
cost-optimization strategies and above all a firm distribution nearly doubled to 30,000+ stores in 2022.
commitment to grow margin accretive portfolio ensured a With the digitization and channel focus, we expect that
robust margin recovery in Quarter 4. As a result, the 2022 distribution will continue to be a strong driver of growth
Q4 EBIDTA was PKR 383 mn (PKR 77 mn excluding one- moving forward.
time sales tax reversal), a 262% growth over Q3 2022.
The worsening economic outlook does not augur well
Quarterly EBITDA 2022 for the country’s economy. FFL has taken timely steps to
(PKR mn)
bring key costs down and will benefit from the full year
383
impact of these initiatives. Food in general and dairy in
particular will remain critical to the nutritional needs of
the nation. We believe that FFL has the right strategic
direction, resources and above all the collective will to not
only ride but also thrive in these challenging times.
77
(71)
(156) (143)
(181)
(237)
(308)
Q1-2022 Q2-2022 Q3-2022 Q4-2022

Usman Zaheer Ahmad
Reported EBITDA (PKR mn) Quarterly sales tax adjusted EBITDA (PKR mn)
Chief Executive Officer
20
LEADERSHIP TEAM
Sitting From Left To Right Standing From Left To Right
Rao Muhammad Imran Head of R&D / Innovation, QA/RA Abdul Rehman Butt Head Supply Chain Management
Khurram Javaid Chief Commercial Officer Faisal Sheikh Chief Human Resource Officer
Brig. Hamid Mahmood Dar SI(M), (Retd) Company Secretary Waseem Haider Chief Financial Officer
Usman Zaheer Ahmad Chief Executive Officer Hafiz Sajjad Hussain Head Milk Collection & Agri Services
Lt Col M. Babar Rashid (Retd) Head Admin
Muhammad Ifzal Akhtar Factory Manager
TOWARDS A
BETTER
NOTICE OF ANNUAL
GENERAL MEETING
ii. The proxy form shall be witnessed by the The Company will intimate members regarding venue
Notice is hereby given that the 56th Annual General Meeting of the
two persons whose names, addresses and of video conference facility at least 5 days before the
shareholders of Fauji Foods Limited will be held on Tuesday, March CNIC numbers shall be mentioned on the date of general meeting alongwith complete information
21, 2023 at 11:00 a.m. at FFL Head Office, 42 CCA, Ex Park View, DHA form. necessary to enable them to access such facility.
Phase- VIII, Lahore and also virtually through video-link to transact the
following business: iii. Attested copies of CNIC or the passport of I/We,______________________________________
the beneficial owners and the proxy shall be ___of________________________, being a member of
furnished with the proxy form. Fauji Foods Limited, holder of ____________________
Ordinary Share(s) as per Registered Folio / CDC Account
iv. The proxy shall produce his/her original No __________________ hereby opt for video conference
CNIC or original passport at the time of the facility at __________________.
Ordinary Business: Notes:- meeting.
1. To confirm the minutes of Extraordinary General Participation in the AGM Proceedings: v. In case of corporate entity, the Board of Signature of member
Meeting held on October 18, 2022. 1. Directors’ resolution/power of attorney with 5. E-Voting
Any member of the Company entitled to attend and
vote at the General Meeting may appoint a person/ specimen signature shall be submitted to Members can exercise their right to demand a poll
2. To receive, consider and adopt the audited accounts representative as proxy to attend and vote in place the Company along with proxy form. subject to meeting requirements of Section 143 -145
for the year ended December 31, 2022 and the of member at the meeting. Proxies in order to be of Companies Act, 2017 and applicable clauses of
reports of the Directors and Auditors thereon. effective must be received at Company’s registered 3. Members, having physical shares, are advised to Companies (Postal Ballot) Regulations 2018.
office duly stamped and signed not later than 48 intimate any change in their registered address
3. To appoint auditors for ensuing period till next AGM hours before time of holding the meeting. A member and the shareholders who have not yet submitted 6. Participation in the AGM through video-link:
and to fix their remuneration. cannot appoint more than one proxy. Attested copy of photocopies of their Computerized National Identity
Cards (CNIC) are requested to send the same at the Video-link for participation virtually in the AGM shall be
shareholder’s CNIC must be attached with the proxy
Other Business: form. earliest. available on Company’s website i.e., www.faujifoods.com.
4. To transact any other business with the permission of 4. Shareholders who wish to receive annual reports Members are also requested to participate in the Annual
2. The CDC/sub account holders are required to follow
the Chair. and notice of the General Meeting through e-mail General Meeting through the following means:
the under mentioned guidelines as laid down by
Securities and Exchange Commission of Pakistan:- are requested to provide, through a letter duly
Closure of Share Transfer (a) For attending the meeting:

signed by them, their particulars, i.e. Name, Folio/
CDC A/C No., E-mail Address, Contact Number,
1. WhatsApp No. [0321-8318007]
for queries & suggestions)
Books: i. In case of individuals, the account holder
CNIC Number (attach copy). Shareholders are also 2. Email ID [secretary@faujifoods.com]
requested to notify immediately any change in their (for queries & suggestions)
Share transfer books of the Company will remain closed or sub-account holder shall authenticate
e-mail address to the Share Registrar of the Company 3. Video Link [Join Through Below Zoom Link]
from March 15, 2023 to March 21, 2023 (both days his/her identity by showing his / her original
i.e., M/s Corplink (Pvt.) Limited, Wings Arcade, 1-K, https://ffbl.zoom.us/j/2315355306?pwd=dUFUL0pHNUlFSTdIN
inclusive) for the purpose of holding the Annual General national identity card or original passport at
Commercial, Model Town, Lahore. zNZWVJWdVVDUT09
Meeting. the time of attending the meeting.
Meeting ID: 231 535 5306
Consent for Video Conference Facility
ii. In case of corporate entity, the Board of Passcode: 335335
Directors’ resolution / power of attorney with Members can also avail video conference facility in
By Order of the Board
specimen signature of the nominee shall be Karachi and Islamabad. In this regard please fill the
produced at the time of meeting. following and submit to registered address of the
Company 10 days before holding the general meeting.
(b) For appointing proxies:
If the Company receives consent from members holding
i. In case of individuals, the account holder or
in aggregate 10% or more shareholding residing at
Lahore. Brig Hamid Mahmood Dar (Retd) sub-account holder shall submit the proxy
geographical location, to participate in the meeting
January 26, 2023 Company Secretary form as per the above requirement.
through video conference at least 10 days prior to the date
of meeting, the Company will arrange video conference
facility in that city subject to availability of such facility in
that city.
TOWARDS A
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DIRECTORS’
REPORT
For the year ended December 31, 2022
DIRECTOR’S REPORT
Economic Overview of currency and increasing energy costs, Tetra Pakistan

and Ecolene increased the price of packaging material by
billion in 2021. Volume for the year increased by 9%; with
significantly higher growth in value-added portfolio, hence
Revenue
(mn)
Uncertainty regarding the global economy persists with ~ 30% during the year. Company is also facing serious off-setting volume & margin decline in commoditized 8,586
central banks continuing monetary tightening to combat challenges in import of essential raw materials due to categories.
12,351
growing inflation, which is expected to continue in 2023. delays in opening of Letter of Credits by State Bank of
This monetary tightening, coupled with withdrawal of fiscal Pakistan amid government policies to tackle the depleting The business showed unprecedented resilience and 2022 2021
stimuli, has increased the possibility of a global recession. foreign reserves. ingenuity to bounce back from macro-economic and
Pakistan while not only facing global challenges, has other external challenges in first half of the year to stage
Early in 2022, GST was imposed on liquid tea whitener, a strong recovery. The Q4 EBIDTA of +383 mn (+77 mn Gross Profit
its own demons to face in the months ahead. Although (mn)
discussions are ongoing with multilateral agencies, a key product of the dairy industry, which significantly for Q4 excluding reversal of Sales Tax) reflects that the
923
however unprecedented climate-induced floods coupled impacted the sales of this category & also FFL’s financial turnaround strategy has started bearing fruit.
with rapidly depleting foreign currency reserves, slowing results. The above GST was rightly reversed by Honorable 971
of exports, high interest rate environment & related factors Lahore High Court in Q4 2022, helping not only the Quarterly EBITDA 2022 2022 2021
have dramatically worsened Pakistan’s economic outlook. Company but overall dairy industry in such difficult times. (PKR mn)
383
Unprecedented floods in mid-2022 created havoc in 2022 saw FFL stage a strong comeback based on three
Loss after Taxation
Pakistan. It is estimated that over 33 million people are strategic pillars: (mn)
affected and damages of USD ~20 billion have been
(1,253)
borne by the economy. The floods have affected economic • Value led growth:
and agricultural activity in the Country as major crops o Portfolio Pivot towards margin accretive categories 77 (2,168)
witnessed significant production losses. The textile sector, 2022 2021

o Aggressive Pricing to offset the inflationary
saw factories shutting down due to unavailability of cotton,
pressure
while shortage of agricultural produce has resulted in (71)
increased prices of staple food items, further fueling rising o Transformed Rout to Market for focused
(156) (143) Increase in Authorized
inflation. With this scenario, the Country’s risk of default
continues to be priced in by global markets.
deployment of portfolio in the market bringing in
efficiencies and speed.
(181)
(237)
Capital and other than
o Channel Strategy revisited to prioritize profitable (308) Right Issue
To address uncertainty and revert to a growth trajectory, channels. Q1-2022 Q2-2022 Q3-2022 Q4-2022
the Country is in dire need of structural reforms, like In the Extraordinary General Meeting held on August
expansion of tax net, cost effective power generation, 30, 2022, Shareholders approved, through a special
• Build Sustainability through significantly reducing the resolution, an increase in Authorized Capital to 28,000
lowering fuel rates, incentivizing export sectors, targeted cost base
The gross profit of PKR 971 million in 2022 (+ 5% million Shares of Rs. 10 /- each from 18,000 million Shares
policies to boost IT sector exports, and establishing talent
o Optimized sourcing strategy to reduce the impact over LY) is testimony to the success of the reshaped of Rs. 10 /- each. Further during the year, Shareholders
development programs.
of critical raw materials business model in the face of such extreme inflationary have approved through a special resolution in the
environment. Extraordinary General Meeting held on October 18, 2022;
Through such grim realities, our business is working o The imported and hence expensive packmat for
issuance of “other than right” shares of the Company in
towards building a sustainable business model and has 1.5L was replaced with local format to reduce the
the aggregate amount of PKR 11,708,749,800 divided
also started developing an export-oriented road map. cost. A very high interest rate saw the gross profit generated
into 1,170,874,980 shares of PKR 10 each. The issuance
During these challenging times, Fauji Foods Limited by the Company being hit by an interest cost to the
o Number of efficiency projects successfully executed of “other than right” shares, once approved by relevant
continues to play a vital role in helping solve some of the tune of Pkr 1.3 billion. The company was successful in
at plant to reduce wastage and improve productivity authorities will strengthen the Company’s equity and
Country’s most pressing food security issues. securing cash injection commitments of Pkr 11.7 billion
• Capability liquidity.
from its sponsors and shareholders via Other than rights
Business Review o Company has invested heavily in the automation

of secondary sales processes through
share issue process. On the completion of this process,
this injection will help the Company address its highly Deploying a fit for future
Along with the massive economic challenges mentioned implementation of SalesFlo leveraged balance sheet and ensuring a significant
reduction in the markup costs for year 2023.
portfolio strategy
above, the dairy industry was one of the first and the worst o The digitization of entire milk collection value
hit by the floods. It is estimated that around 1.5 million chain is under way. The design part has been House of Nurpur presents one of the most diversified
animals died and/or were displaced by these climate Loss after tax for the year 2022 stood at Pkr 2.168 billion dairy portfolio to serve the Tasteful Nutrition for Pakistani
completed.
change induced floods and disease. This resulted in vs Pkr 1.253 billion in 2021. consumers. Our wide range of products include Nurpur
o A robust talent management process was put in UHT Milk, Butter, Cheese, Cream, Flavored milk & Dostea
around a 20% loss in milk production in Pakistan dairy
place to build a strong talent backbone for future Increase/(De- Liquid Tea Whitener. In ‘22 Nurpur UHT milk outgrew the
sector. Devaluation of Pak Rupee significantly impacted PKR million 2022 2021
the feed input cost of the farmer which resulted in around crease) % milk category by more than 7 times, becoming the fastest
It gives me immense pleasure to report that despite such Net sales 12,351 8,586 44.0% growing milk brand in Pakistan in 2022. Living our promise
50% increase in raw milk cost in 2022 vs a 36% increase
an uncertain & challenging business environment, FFL of tastefulness and nutrition, we laterally & successfully
in milk cost over the previous 5 years. Due to devaluation Gross profit 971 923 5.2%
achieved an impressive 44% growth in net revenue for expanded our portfolio through line extensions in value
the year 2022; PKR 12.4 billion compared with PKR 8.6 (Loss) after tax (2,168) (1,253) 73.0% added categories i.e., Slightly Salted Butter, Chocolate
Flavor Milk, Mozzarella & Cheddar Cheese Blocks.
TOWARDS A
BETTER
In ’22 we effectively improved Nurpur top of the mind • Successful development of new products for with these risks. There are no significant risk and reasonable and prudent judgment except for those as
consumer awareness manifold. This was delivered on the institutional business is expected to build on an uncertainties posed to the business and operations of the disclosed in the financial statements.
back of a well-orchestrated integrated communication already robust portfolio. We aim to sell more products Company, except as disclosed in the Contingencies and
• International Financial Reporting Standards, as
strategy. The communication platforms included TVCs, to existing customers as well as acquire new Commitment notes to the financial statements.
applicable in Pakistan, have been followed in
always-on social media digital platforms, food shows customers based on insight-led new products.
preparation of the financial statements.
and recipe channels integrations, Sports (Hockey & Golf)
sponsorships, baking competitions, impactful consumer • Mega sustainability projects are underway to shift
Transaction with related • The system of internal controls is sound in design and
engagement and consumer promotions to induce trial. to clean energy and radically bring down the energy parties has been effectively implemented and monitored with
cost. A 1.0 MW solar plant is being installed currently continuous improvements taking place.
Our food services business plays a fundamental role in that is expected to be in production by Q1 2023. Also, The Company carries out transactions with related parties • There are no significant doubts upon the Company’s
upholding our promise of Taste & Nutrition by developing conversion is under way to utilize locally available bio and amounts, due from and to, related parties as shown
ability to continue as a ‘going concern’.
business with prestigious Int’l & local clients based fuel to reduce the reliance on imported and expensive under respective heads are carried out on an arms’ length
basis. Except as disclosed in financial statements, no • There are no statutory payments on account of taxes,
on customized products and a value-added range of fuel for production needs.
other transactions were executed with related parties duties, levies and charges which are outstanding as
our portfolio. It helped in sustaining the business value
on December 31, 2022 except for those disclosed in
margins and volume growth in these unprecedented • Equity injection is expected to eliminate the debt.
Corporate and financial reporting framework: the financial statements.
economic times. That will take sizeable interest cost off the books
thereby allowing a much needed boost to a business • The value of investments of staff provident fund,
that is already improving its operational health rapidly • The financial statements, prepared by the based on un-audited accounts, was Rs. 111 million
management of the Company, present fairly its state as at December 31, 2022.
• We aim to secure the future of the business by of affairs, the result of its operations, cash flow and
• The Board has approved the remuneration policy
Transforming the Talent Base. Number of initiatives changes in equity.
of non-executive directors including independent
are underway to ensure that FFL is able to engage • Proper books of accounts of the Company have been directors.
top quality talent to build a leadership pipeline for maintained.
future. • The pattern of shareholding and additional
• Appropriate accounting policies have been information regarding pattern of shareholding is
consistently applied in preparation of the financial included in this annual report.
To achieve sustainable sectoral growth, it is of immense
statements and accounting estimates are based on
importance that future government policies are consistent
and supportive to dairy sector. Company is engaged with
Shares held by: No. of Shares held Percentage
multiple relevant and important stakeholders through
I. Associated Companies, Undertakings and Related Parties:
the platform of Pakistan Dairy Association (PDA) to help
emphasize the importance of packaged milk and related 1. Committee of Admin. Fauji Foundation (CDC) 67,371,916 4.2530
products to ensure for provision of healthy and hygienic 2. Fauji Fertilizer Bin Qasim Limited (CDC) 1,134,701,257 71.6312
products to the nation.
II. Mutual Funds:
However, management also foresees a mixed 1. CDC – Trustee Alfalah Consumer Index Exchange Traded Fund (CDC) 121,876 0.0077
macroeconomic and business environment with 2. CDC - Trustee Faysal MTS Fund - MT (CDC) 205, 500 0.0130
inflationary challenges and pressure on consumer 3. CDC – Trustee First Capital Mutual Fund (CDC) 35,000 0.0022
purchasing power. The management team remains
4. CDC – Trustee Golden Arrow Stock Fund (CDC) 50,000 0.0032
committed and resilient to respond to the challenges in the
market by increasing capabilities and by bringing further 5. CDC – Trustee HBL Financial Sector Income Fund Pan I – MT (CDC) 55,000 0.0035
operational efficiency to make the company’s business 6. CDC – Trustee NIT Income Fund – MT (CDC) 500 0.0000
sustainable and profitable.
III. Directors, CEO and their Spouse and Minor Children:
Future outlook Principle Risks and

1. Mr. Sarfaraz Ahmed Rehman 7 0.0000
2. Mr. Arif ur Rehman 70,001 0.0044
The 2022 strategic direction has already started to build
a positive growth momentum in volume and margins as
Uncertainties Facing the 3. Dr. Nadeem Inayat 31 0.0000
borne out by Q4 results. Based on last two quarters trends Company 4. Syed Bakhtiyar Kazmi 1 0.0000
we are confident that: 5. Mr. Ali Asrar Hossain Aga 78,879 0.0050
Risks faced by the Company are not significantly different
• Growth momentum will continue in 2023. The from those posed to other companies working in the 6. Mr. Basharat Ahmad Bhatti 1 0.0000
‘Route to Market’ capability will continue to drive the dairy sector. Risks are reviewed by the management 7. Mr. Imran Husain 1 0.0000
sustainable growth in portfolio and particularly value- through a robust business and risk management process.
added brands 8. Mr. Javed Kureishi 1 0.0000
Appropriate strategies and contingency plans are regularly
reviewed to minimize the potential impact associated 9. Ms. Tania Shahid Aidrus 1 0.0000
TOWARDS A
BETTER
IV. Executives: – – Auditors: Dividends:
V. Public Sector Companies & Corporations: – –
The audit committee reviewed consent of retiring auditors The Board has not recommended any dividend due to
Banks, Development Finance Institutions, Non-Banking Finance Compa- EY Ford Rhodes Chartered Accountants being eligible loss to the Company during the year.
VI. 28,247,439 1.7832
nies, Insurance Companies, Takaful, Modarabas and Pension Funds:
for re-appointment to provide independent external audit
Annual General Meeting:

Shareholders holding five percent or more voting interest in the listed services to the Company. The Audit Committee has
VII. company:
recommended the appointment of retiring auditors EY
1. Fauji Fertilizer Bin Qasim Limited (CDC) 1,134,701,257 71.6312 Ford Rhodes Chartered Accountants as statutory auditors The 56th Annual General Meeting will be held on March
of the Company for the ensuing year. The Board has 21, 2023 at 1100 hours at Lahore to approve annual
• No trading in the shares of the Company carried-out Five meetings of the Audit Committee were held. endorsed the recommendation. financial statements of the Company for the year ended
by the Directors, CEO, CFO, Company Secretary
and their spouse and minor children during the year
Attendance by each director was as follow:
Compliance with the Code December 31, 2022.
of Corporate Governance:
Acknowledgement:
ended December 31, 2022. No. of
Name of Directors Meeting(s)
The requirements of the Listed Companies (Code of
Board of Directors /
Attended
Corporate Governance) regulations 2019, relevant for the The Board is thankful to the valuable shareholders and
Mr. Javed Kureishi 5
Committees meetings Syed Bakhtiyar Kazmi 5
year ended December 31, 2022 have been duly complied
with. A statement to this effect is annexed with the report.
financial institutions for their trust and continued support
to the Company. The Board would also like to place on
during the year 2022: Mr. Basharat Ahmad Bhatti 5 record its appreciation to all employees of the Company
Dr. Nadeem Inayat 1 FFL follows a policy framework conducive to more for their dedication, diligence and hard work.
Seven meetings of the Board of Directors were held.
environmentally friendly practices and proper waste
Attendance by each director was as follow: For and on behalf of the Board
Seven meetings of the HR&R Committee were held. management practices have been adopted for solid and
Attendance by each director was as follow: liquid waste, air emission, soil pollution and noise.
No. of
Name of
Meeting(s)
Directors Company’s objective towards corporate social
Attended No. of
Name of Directors Meeting(s) responsibility is to prioritize social good alongside the
Mr. Sarfaraz - Re-Elected on November 5 Waqar Ahmed Malik Usman Zaheer Ahmad
Attended traditional corporate goal of generating profits.
Ahmed Rehman 26, 2021
Chairman Chief Executive Officer
Mr. Arif ur - Re-Elected on November 7 Mr. Ali Asrar Hossain Aga 7
Directors are under fiduciary responsibility to operate
Rehman 26, 2021 Dr. Nadeem Inayat 1
business under a system of governance and controls, Dated: January 26, 2023
Dr. Nadeem - Re-Elected on November 4 Mr. Imran Husain 6 which reinforces stakeholders trust and confidence in the
Inayat 26, 2021
Mr. Arif ur Rehman 7 Company.
Syed Bakhtiyar - Re-Elected on November 7
Kazmi 26, 2021 Ms. Samia Iram 0
The remuneration to the Non-executive Directors
Mr. Ali Asrar - Re-Elected on November 7
(including independent Directors) is paid according to the
Hossain Aga 26, 2021 Five meetings of the Operation and Business Committee
remuneration policy approved by the Board.
Mr. Basharat - Re-Elected on November 7 were held.
Ahmad Bhatti 26, 2021 Attendance by each director was as follow:
Mr. Imran Husain - Re-Elected on November 7
26, 2021 No. of Meeting(s)
Name of Directors
Mr. Javed - Re-Elected on November 7 Attended
Kureishi 26, 2021 Mr. Ali Asrar Hossain Aga 5
Ms. Samia Iram - Resigned w.e.f September 1
Dr. Nadeem Inayat 1
05, 2022
Ms. Tania Shahid - Appointed on September 3 Mr. Imran Husain 5
Aidrus 05, 2022 Mr. Sarfaraz Ahmed Rehman 4
32
STATEMENT OF COMPLIANCE
with Listed Companies (Code of Corporate Governance) Regulations, 2019
Audit Committee 18. The statutory auditors of the Company have

confirmed that they have been given a satisfactory
6. The Board has developed a vision/mission
Name of Company: Fauji Foods Limited Mr. Javed Kureishi Chairman rating under the Quality Control Review program
statement, overall corporate strategy and significant
of the ICAP and registered with Audit Oversight
Year ended: December 31, 2022 policies of the Company. The Board has ensured a
Syed Bakhtiyar Kazmi Member Board of Pakistan, that they and all their partners
complete record of particulars of significant policies
are in compliance with International Federation of
along with their date of approval or updating is Mr. Basharat Ahmad Bhatti Member Accountants (IFAC) guidelines on code of ethics as
The Company has complied with the requirements maintained by the Company.
adopted by the Institute of Chartered Accountants
of the Regulations in the following manner: 7. All the powers of the Board have been duly Dr. Nadeem Inayat Member
of Pakistan and that they and the partners of the
exercised and decisions on relevant matters firm involved in the audit are not a close relative
1. The total number of directors are 09 as per the have been taken by the Board/shareholders as (spouse, parent, dependent and non-dependent
following: empowered by the relevant provisions of the Act
HR & Remuneration Committee
children) of the chief executive officer, chief financial
and these Regulations. officer, head of internal audit, company secretary or
Mr. Ali Asrar Hossain Aga Chairman
a. Male: 08 8. The meetings of the board were presided over by director of the company;
b. Female: 01 the Chairman and, in his absence, by a director Dr. Nadeem Inayat Member
19. The statutory auditors or the persons associated
elected by the Board for this purpose. The Board with them have not been appointed to provide other
has complied with the requirements of the Act and Mr. Imran Husain Member
services except in accordance with the Act, these
2. The composition of Board is as follows:
the Regulations with respect to frequency, recording regulations or any other regulatory requirement
Mr. Arif ur Rehman Member
and circulating minutes of meeting of the Board. and the auditors have confirmed that they have
Independent Directors observed IFAC guidelines in this regard.
9. The Board of Directors have a formal policy
and transparent procedures for remuneration of
Operation and Business
Mr. Javed Kureishi 20. We confirm that all requirements of regulations 3,
directors in accordance with the Act and these Committee 6, 7, 8, 27, 32, 33 and 36 of the Regulations have
Regulations which has been approved by BOD. been complied with.
Mr. Imran Husain Mr. Ali Asrar Hossain Aga Chairman
10. The following Directors have completed their 21. Explanation for non-compliance with requirements
Mr. Ali Asrar Hossain Aga Director’s Training Program: Dr. Nadeem Inayat Member other than regulations 3,6,7,8,27,32,33 and 36 are
below:
Female Director Mr. Imran Husain Member
• The Company has not formed Risk Management
Mr. Sarfaraz Ahmed Rehman (Director / Chairman)
Ms. Tania Shahid Aidrus Mr. Sarfaraz Ahmed Rehman Member Committee. However, the Company has Operation
Dr. Nadeem Inayat Director and Business Committee which is working in lieu of
this committee.
Non-Executive Directors Mr. Basharat Ahmad Bhatti Director
15. The Terms of Reference of the Audit Committee,
Human Resource Committee and Operation • The Company has not formed Nomination
Mr. Sarfaraz Ahmed Rehman (Chairman) Mr. Imran Husain Director and Business Committee have been formed, Committee. However, the Company has Human
Mr. Arif ur Rehman documented and advised to the Committees for Resource & Remuneration Committee which is
Mr. Ali Asrar Hossain Aga Director Compliance. working in lieu of this committee.
Dr. Nadeem Inayat
16. The frequency of meetings of the committee were
Syed Bakhtiyar Kazmi Syed Bakhtiyar Kazmi Director
as per following:
11. The Board has approved appointment of Chief
Chief Executive Officer Financial Officer including the remuneration and No. Frequency
Mr. Usman Zaheer Ahmad terms and conditions of employment.

Audit Committee 05 Quarterly
12. Chief Executive Officer resigned from his position
3. The directors have confirmed that none of them and the vacant position has been filled by the HR and Remuneration
07 Quarterly
is serving as a director on more than seven listed Board. There is no change in the Head of Internal Committee:
Waqar Ahmed Malik Usman Zaheer Ahmad
companies, including this Company. Audit. Operation and Business
05 Quarterly Chairman Chief Executive Officer
4. The Company has prepared a Code of Conduct Committee:
and has ensured that appropriate steps have been 13. CEO and CFO duly endorsed the financial Dated: January 26, 2023
taken to disseminate it throughout the Company statements before approval of the Board. 17. The Board has set up an effective internal audit
along with its supporting policies and procedures. function staffed with persons who are suitably
14. The Board has formed committees comprising of qualified and experienced for the purpose and are
5. A casual vacancy occurring on 05 September, 2022
members given below: well conversant with the policies and procedures of
was filled by the Directors on 05 September, 2022
the Company.
when Ms. Tania Shahid Aidrus was appointed as
Director in place of Brig Dr. Samia Iram (Retd).
TOWARDS A
BETTER
FINANCIAL
PERFORMANCE
Annual Annual
2022 2021 2020 2019 2018 2017 2022 2021 2020 2019 2018 2017
Production Statement of affairs
Liquid Production - litres 59,041,145 57,077,538 61,144,281 60,873,948 90,295,898 86,699,115 Share capital Rs. (000) 15,840,882 15,840,882 8,032,936 5,284,072 5,284,072 5,284,072
Non - Liquid Products - Kgs 2,791,413 2,830,496 1,940,207 1,651,307 1,778,587 725,221 Reserves Rs. (000) (13,925,332) (14,541,006) (13,265,668) (10,271,276) (4,565,974) (1,797,650)
Financial Performance - Profitability Revaluation surplus Rs. (000) 2,131,899 2,225,644 1,243,724 1,309,418 1,424,378 1,458,968
Share holder’s fund / Equity Rs. (000) 4,047,449 3,525,519 (3,989,009) (3,677,786) 2,142,476 4,945,390
Gross profit margin % 7.86 10.75 0.84 (11.82) (3.84) 2.79 Long term borrowings Rs. (000) 5,536,164 6,117,338 6,304,524 2,963,889 4,480,940 4,553,055
EBITDA margin to sales % (2.58) (0.23) (5.81) (32.70) (24.08) (29.67) Capital employed Rs. (000) 9,614,409 9,718,112 2,392,685 (637,262) 6,709,583 8,039,476
Pre tax margin % (16.27) (17.89) (41.28) (74.03) (43.30) (43.08) Deferred liabilities/(assets) Rs. (000) - - - - (1,571,537) (1,061,248)
Net profit margin % (17.56) (14.59) (41.48) (100.77) (37.25) (32.68) Property, plant & equipment Rs. (000) 8,138,696 8,521,212 7,550,093 8,106,036 7,953,144 6,822,274
Return on equity % 53.58 21.79 (111.40) (244.43) (79.88) (35.73) Long term assets Rs. (000) 8,154,165 8,529,390 7,577,052 8,152,036 9,584,783 7,901,844
Return on capital employed % 22.55 12.89 127.81 (908.41) (42.47) (28.46) Net current assets / Working capital Rs. (000) 1,460,244 1,188,722 (5,184,367) (8,789,298) (2,875,200) 1,652,214
Liquid funds - net Rs. (000) 1,145,482 1,873,907 888,888 114,134 98,221 1,195,302
Operating Performance / Liquidity
Total assets turnover Times 1 0.61 0.56 0.47 0.56 0.59 Financial Performance
Fixed assets turnover Times 2 1.01 0.96 0.71 0.96 1.03 Sales - net Rs. (000) 12,350,702 8,586,396 7,373,162 5,744,872 7,649,287 7,000,955
Trade Debtors Rs. (000) 557,499 566,068 350,850 181,171 124,573 129,705 Gross profit Rs. (000) 970,668 922,734 62,262 (678,827) (293,641) 195,125
Debtors turnover Times 22 19 28 38 60 67 Operating Loss Rs. (000) (815,763) (457,148) (1,147,313) (2,434,379) (2,555,185) (2,570,226)
Debtors turnover Days 17 19 13 10 6 5 Loss before tax Rs. (000) (2,009,458) (1,536,489) (3,043,795) (4,253,029) (3,312,388) (3,016,286)
Inventory Rs. (000) 1,239,692 707,587 543,983 1,443,223 1,380,401 1,021,156 Loss after tax Rs. (000) (2,168,511) (1,252,942) (3,058,112) (5,788,937) (2,849,239) (2,288,262)
Inventory turnover Times 12 12 7 5 7 8 EBITDA Rs. (000) (318,248) (19,931) (428,346) (1,878,474) (1,841,925) (2,077,150)
Inventory turnover Days 31 30 50 80 55 46
Purchases Rs. (000) 9,889,644 6,577,469 5,866,287 5,053,129 6,437,178 5,403,562 Summary of Cash Flows
Accounts Payables Rs. (000) 1,241,569 737,489 443,910 777,093 898,415 438,319 Net cash flow from operating activities Rs. (000) (969,895) (381,082) (321,559) (1,960,936) (2,539,892) (3,597,667)
Creditors turnover Times 10 11 10 6 10 7 Net cash flow from investing activities Rs. (000) 20,163 105,945 (67,252) (739,335) (1,456,341) (1,050,585)
Creditors turnover Days 37 33 38 61 38 49 Net cash flow from financing activities Rs. (000) 220,591 1,201,499 4,659,344 2,215,323 (292,430) 6,159,323
Operating cycle Days 11 17 25 29 23 2 Changes in cash & cash equivalents Rs. (000) (729,141) 926,361 4,270,533 (484,949) (4,288,663) 1,511,072
Return on assets % (15.25) (8.85) (26.06) (47.63) (21.02) (19.22) Cash & cash equivalents - Year end Rs. (000) (560,059) 169,083 (757,279) (5,027,812) (4,542,863) (254,200)
Current ratio 1.32 1.27 0.44 0.31 0.58 1.70
Quick / Acid test ratio 1.01 1.07 0.37 0.18 0.36 1.22
Capital Market / Capital Structure Analysis

Market value per share
- Year end Rs. 4.71 9.19 17.37 14.47 30.28 16.46
Breakup value - (Net assets / share) Rs. 2.56 2.23 (4.97) (6.96) 4.05 9.36
Earning per share (pre tax) Rs. (1.27) (0.97) (3.91) (8.05) (6.27) (12.15)
Earning per share (after tax) Rs. (1.37) (0.79) (3.92) (10.96) (5.39) (9.22)
Earnings growth % -73.07% 79.85% 64.18% -103.17% 41.50% -5.33%
Price earning ratio (3.44) (11.62) (4.43) (1.32) (5.62) (1.79)
Market price to breakup value 1.84 4.13 (3.50) (2.08) 7.47 1.76
Debt : Equity 1.78 2.25 (3.64) (3.82) 4.61 1.73
Interest cover (0.65) (3.96) (0.65) (1.43) (3.79) (6.45)
TOWARDS A
BETTER
FINANCIAL PERFORMANCE
Sales - Net GROSS PROFIT/(LOSS) & RATIO TO SALES Loss After Tax Ordinary Share Capital & Loss Per Share
0.0%
1,200 15.00% 0 1,800,000 0.00
14,000
-14.59 -0.79
971 -1.37
12,531 10.75%
1,600,000
950 -1000
-20.0%
10.00% -17.56 -2.00
1,584,080
1,584,080
12,000
-32.68 -1,253
923 -37.25 1,400,000
700 -41.48
-2000
7.86% -40.0%
10,000 5.00% -2,169 -3.92
1200,000 -4.00
Gross Profit/(Loss) Ratio

-2,288
Operating Profit Ratio

Net Profit Margin (%)
8,586 450 2.79%
In million of Rupees
-3000 -5.39
7,649 -2,849
8,000 -3.058 1,000,000
7,373 195 0.84% -60.0%
7,001 200 0.00% -6.00
-4000 803,294
62 800,000
5,745 -3.84%
6,000
-50 -80.0%
-5.00% -100.76 600,000 528,407 -8.00
-5000 528,407 528,407
4,000 -300
-294 400,000
-11.82% -100.0% -9.22
-10.00% -6000 -5.789 -10.00
2,000 -550 200,000
-10.74
-679 -7000 -120.0%

-800 -15.00% 0 -12.00
0
Dec-17 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Dec-17 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Dec-17 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Jan-17 Jan-18 Jan-19 Jan-20 Jan-21 Jan-22
Year Ended Year Ended Year Ended Year Ended
Distribution Expenses Ratio to Sales OPERATING LOSS & RATIO TO SALES Paid-up Share Capital Shareholders' Equity and Total Debts
2,500 40.00% 0.00% 20,000,000
0 1,800,000
2,335 -4,57 -6.60
14,501,512
1,584,088 1,584,088
14,031,442
9,875,655
35.00%
-5.32 1,600,000 15,000,000
-10.00%
2,000 33.35 -1,147 -815
7,921,948
-1000
1,400,000
7,188,135
30.00%
1,796 -15.56
10,000,000
6,041,139
Distribution Expense Ratio
-20.00%
Operating Profit Ratio

1,200,000
25.00%
22.80
1,500
4,047,449
-2000
3,486,422
3,525,519
1,338 5,000,000
23.48 1,310 1,000,000
-2,555
2,142,476
20.00% -30.00%
-2,434
-2,570 803,294
1,019 -33.41 800,000 3,000,000
1,000
15.00% -3000
854 -36.71
-40.00%
10.84 600,000 528,407 528,407 528,407
11.87 -42-37 0
11.58 10.00%
-3,677,786
-3,989,009
500 400,000
-4000
-50.00%
5.00% -2,000,000
200,000
0 0.00%
-5000 -60.00% -5,000,000
0
Dec-17 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Dec-17 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Dec-17 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Dec-17 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22
Year Ended Year Ended Year Ended Equity Debt
Financial Expenses & Ratio to Sales Loss Before Tax & Ratio to Sales Total Assets & Turnover Application of Revenue
60.00%
2,000 40.00% 0 0.00% 15000000 1.0
14,164,744 14,216,281
13,556,178 53.62%
1,800 1,752 0.9
1,698 35.00% -10.00%
50.00%
-17.89 -16.27
11,907,266 12,152,806
1,600 29.56
-1000 12000000 11,733,186 0.8
30.00% -20.00% 0.87
1,400 0.7 40.00%
Distribution Expense Ratio

1,260 -1,536 0.63
23.77
Finance Cost t Ratio
25.00%
-30.00%
1,200 1,155 -2000 9000000 0.6
-2,009
% of Sales
0.59 0.61
-41.28 0.56
-43.08 -43.30 30.00%
1,000 20.00% -40.00% 0.5
0.47
800 -3000 6000000 0.4
15.00% -50.00%
675 -3,016 -3,044 20.00%
10.20 -3,312
600 13.45 0.3
13.71%
10.00% -60.00%
398
400 8.82 -4000 -4,253 3000000 0.2 10.00% 8.82% 8.65% 9.19%
5.00% -70.00%
200 5.69
0.1 3.08%
-74.03 1.39% 0.59% 0.92%
0.03%
0.00%
0 0.00% -5000 -80.00% 0 0.0
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es
s
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ia
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Dec-17 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Dec-17 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Dec-17 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22
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Year Ended Year Ended Year Ended
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TOWARDS A
BETTER
PRODUCT
PORTFOLIO
NURPUR UHT MILK
NURPUR UHT Milk is produced from freshly collected
high quality full-cream milk. It is ultra-high temperature
treated and packed in both Tetra Pak and Ecolean Packs
NURPUR NURPUR Salted Butter
is produced from fresh
SALTED
dairy cream with great
taste due to high-quality
NURPUR butter churn. It
BUTTER
is hygienically packed
for better protection and
convenience
NURPUR
UNSALTED
BUTTER
Nurpur unsalted butter is produced from
fresh dairy cream with great taste due
to high-quality NURPUR butter churn. It is
hygienically packed in butter paper and foil
for better protection and convenience
NURPUR
SLIGHTLY
SALTED
BUTTER
Spread NURPUR’s Slightly Salted Butter

on your toast or dollop on pancakes to
relish every bite. The subtle taste of salt
is ideal for those who prefer low salt diet
NURPUR CHEESE
Nurpur Cheddar Cheese has
creamy taste with rich aroma
making it customers first choice.
Nurpur Mozzarella Cheese provides
outstanding performance in various
applications so customers can enjoy
a delicious, authentic experience
every time
NURPUR
FLAVOURED MILK
Nurpur Flavoured Milk is a sweetened dairy product

made with fresh milk. The process involves ultra-high
temperature treatment to protect the product
NURPUR CREAM
Nurpur Cream is a smooth and delicious dairy cream,
produced from fresh high quality milk, ultra-high
temperature treated and packed in Tetra packaging
DOSTEA TEA
WHITENER
Dostea Tea whitener provides a rich and
mouthful cup of tea. It is a pasteurized, ultra-high
temperature treated and packed in both Tetra Pak
and Ecolean Packs
FAUJI FOODS LIMITED
FOOD SERVICES BUSINESS CHEESE
Cheddar &
FFL Food Services Business provides a wide range of food
DAIRY Mozzarella
products to meet the growing demands of the food service CREAM
industry including restaurants, hotels, fast food chains, bakeries,
institutional caterers and more.
With emphasis on quality and customer service, FFL Food Services Business plays a pivotal role in the food supply
chain, ensuring the prompt delivery of quality food products that satisfy the nutritional needs of our customers while
enriching their lives with unique culinary tastes.
UHT Milk
JAMS
& CHOCOLATE FLAVOURED
Marmalade Dip Milk
BUTTER
OUR CERTIFICATIONS & LICENSES

TEA
Whitener
FSSC 22000 (Rev 5.1) Halal Certification ISO 9001:2015 Product Registration
with PSQCA
YUM! Certification PFA Approval
TOWARDS A
BETTER
FINANCIAL
STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 2022
INDEPENDENT AUDITOR’S REVIEW REPORT INDEPENDENT AUDITOR’S REPORT
To the Members of Fauji Foods Limited To the Members of Fauji Foods Limited
Review Report on the Statement of Compliance Contained in Listed Report on the Audit of the Financial Statements
Companies (Code of Corporate Governance) Regulations, 2019
Opinion
We have reviewed the enclosed Statement of Compliance with the Listed Companies (Code of Corporate Governance)
Regulations, 2019 (the Regulations) prepared by the Board of Directors of Fauji Foods Limited (the Company) for the year We have audited the annexed financial statements of Fauji Foods Limited (the Company), which comprise the statement
of financial position as at 31 December 2022, the statement of profit or loss, the statement of comprehensive income, the
ended 31 December 2022 in accordance with the requirements of regulation 36 of the Regulations.
statement of changes in equity, the statement of cash flows for the year then ended, and notes to the financial statements,
including a summary of significant accounting policies and other explanatory information (hereinafter referred to as the
The responsibility for compliance with the Regulations is that of the Board of Directors of the Company. Our responsibility ‘financial statements’) and we state that we have obtained all the information and explanations which, to the best of our
is to review whether the Statement of Compliance reflects the status of the Company’s compliance with the provisions of knowledge and belief, were necessary for the purposes of the audit.
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 In our opinion and to the best of our information and according to the explanations given to us, the statement of financial
position, statement of profit or loss, statement of comprehensive income, the statement of changes in equity and the
Company to comply with the Regulations.
statement of cash flows together with the notes forming part thereof conform with the accounting and reporting standards
as applicable in Pakistan and give the information required by the Companies Act, 2017 (XIX of 2017), in the manner so
As a part of our audit of the financial statements we are required to obtain an understanding of the accounting and internal required and respectively give a true and fair view of the state of the Company’s affairs as at 31 December 2022 and of
control systems sufficient to plan the audit and develop an effective audit approach. We are not required to consider the loss and other comprehensive loss, the changes in equity and its cash flows for the year then ended.
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. Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs) as applicable in Pakistan. Our
The Regulations require the Company to place before the Audit Committee, and upon recommendation of the Audit responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial
Statements section of our report. We are independent of the Company in accordance with the International Ethics
Committee, place before the Board of Directors for their review and approval, its related party transactions. We are only
Standards Board for Accountants’ Code of Ethics for Professional Accountants as adopted by the Institute of Chartered
required and have ensured compliance of this requirement to the extent of the approval of the related party transactions Accountants of Pakistan (the Code) and we have fulfilled our other ethical responsibilities in accordance with the Code.
by the Board of Directors upon recommendation of the Audit Committee. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Based on our review, nothing has come to our attention which causes us to believe that the Statement of Compliance Key Audit Matter
does not appropriately reflect the Company’s compliance, in all material respects, with the requirements contained in the Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
Regulations as applicable to the Company for the year ended 31 December 2022. financial statements of the current period. These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Following are the key audit matters:
Key audit matters How the matter was addressed in our audit
Chartered Accountants
1. Going concern
Place: Lahore
The Company has suffered a loss of Rs. 2,169 million, for We performed following keyaudit procedures,
Date: 24th February 2023
the year ended 31 December 2022 (2021: Rs. 1,253 among other procedures, in this respect:
UDIN: CR202210079rJLH6hie4
million) and its accumulated loss as at the reporting date - Reviewed the business plan of the Company
amounts to Rs. 18,469 million (2021: Rs. 16,396 million). approved by the Board of Directors along with
In order to support the operations of the Company, the testing the appropriateness of underlying
parent company along with the ultimate parent and other assumptions and bases for projected financial
group companies have approved injection of additional information
equity amounting to Rs. 11,709 million into the Company,
as mentioned in Note 1.2 to the accompanying financial - Performed variance analysis of actual financial
statements. performance and budget
The assessment of the entity’s ability to continue as a going - Checked the planned equity injections in the business
concern is critical to the preparation of financial statements plan of the Company
as it is significant to the decision making of users of the - Assessed the financial capability of the prospective
entity’s financial statements. shareholders who have planned to inject further
equity into the Company to ascertain the feasibility of
their plan to inject equity
- Assessed the parent company’s commitment to
support the Company based on the conversion of
loan and related accrued mark-up into equity and its
letter of support given to the Company
62 63
INDEPENDENT AUDITOR’S REPORT
To the Members of Fauji Foods Limited
Report on the Audit of the Financial Statements
Key audit matters How the matter was addressed in our audit conditions that may cast significant doubt on the of cash flows together with the notes thereon have
Company’s ability to continue as a going concern. been drawn up in conformity with the Companies
In view of the substantial operating and accumulated - Assessed the adequacy of disclosures made in
If we conclude that a material uncertainty exists, we Act, 2017 (XIX of 2017) and are in agreement with the
losses and significance of assessment of the Company’s the financial statements in accordance with the
are required to draw attention in our auditors’ report books of account and returns;
ability to continue as a going concern to the financial requirements of the applicable accounting and
to the related disclosures in the financial statements
statements as a whole, it was considered a key audit reporting standards. c) investments made, expenditure incurred and
or, if such disclosures are inadequate, to modify our
matter. guarantees extended during the year were for the
opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditors’ purpose of the Company’s business; and
report. However, future events or conditions may
Information Other than the Financial Statements and Auditors’ Responsibilities for the Audit of the
cause the Company to cease to continue as a going d) no zakat was deductible at source under the Zakat
Auditors’ Report Thereon Financial Statements
concern. and Ushr Ordinance, 1980 (XVIII of 1980) .
Management is responsible for the other information. Our objectives are to obtain reasonable assurance about
The other information comprises the information included whether the financial statements as a whole are free from ï Evaluate the overall presentation, structure and The engagement partner on the audit resulting in this
in the Annual Report, but does not include the financial material misstatement, whether due to fraud or error, and content of the financial statements, including the independent auditors’ report is Ahsan Shahzad.
statements and our auditors’ report thereon. to issue an auditors’ report that includes our opinion. disclosures, and whether the financial statements
Reasonable assurance is a high level of assurance, but represent the underlying transactions and events in a
Our opinion on the financial statements does not cover is not a guarantee that an audit conducted in accordance manner that achieves fair presentation.
the other information and we do not express any form of with ISAs as applicable in Pakistan will always detect a
assurance conclusion thereon. material misstatement when it exists. Misstatements can We communicate with the board of directors regarding,
arise from fraud or error and are considered material if, among other matters, the planned scope and timing of EY Ford Rhodes
In connection with our audit of the financial statements, our individually or in the aggregate, they could reasonably be the audit and significant audit findings, including any Chartered Accountants Lahore:
responsibility is to read the other information and, in doing expected to influence the economic decisions of users significant deficiencies in internal control that we identify Date: 24th February 2023
so, consider whether the other information is materially taken on the basis of these financial statements. during our audit. UDIN: AR202210079dY1KUyAf8
inconsistent with the financial statements or our knowledge
obtained in the audit or otherwise appears to be materially As part of an audit in accordance with ISAs as applicable in We also provide the board of directors with a statement
misstated. If, based on the work we have performed, we Pakistan, we exercise professional judgment and maintain that we have complied with relevant ethical requirements
conclude that there is a material misstatement of this other professional skepticism throughout the audit. We also: regarding independence, and to communicate with them
information, we are required to report that fact. We have all relationships and other matters that may reasonably
nothing to report in this regard. ï Identify and assess the risks of material misstatement be thought to bear on our independence, and where
of the financial statements, whether due to fraud applicable, related safeguards.
Responsibilities of Management and Board of or error, design and perform audit procedures
Directors for the Financial Statements responsive to those risks, and obtain audit evidence From the matters communicated with the board of
Management is responsible for the preparation and that is sufficient and appropriate to provide a basis directors, we determine those matters that were of most
fair presentation of the financial statements in accordance for our opinion. The risk of not detecting a material significance in the audit of the financial statements of the
with the accounting and reporting standards as applicable misstatement resulting from fraud is higher than for current period and are therefore the key audit matters. We
in Pakistan and the requirements of Companies Act, 2017 one resulting from error, as fraud may involve collusion, describe these matters in our auditors’ report unless law
(XIX of 2017) and for such internal control as management forgery, intentional omissions, misrepresentations, or or regulation precludes public disclosure about the matter
determines is necessary to enable the preparation the override of internal control. or when, in extremely rare circumstances, we determine
of financial statements that are free from material that a matter should not be communicated in our report
misstatement, whether due to fraud or error. ï Obtain an understanding of internal control relevant because the adverse consequences of doing so would
to the audit in order to design audit procedures that reasonably be expected to outweigh the public interest
In preparing the financial statements, management are appropriate in the circumstances, but not for the benefits of such communication.
is responsible for assessing the Company’s ability to purpose of expressing an opinion on the effectiveness
continue as a going concern, disclosing, as applicable, of the Company’s internal control. Report on Other Legal and Regulatory Requirements
matters related to going concern and using the going Based on our audit, we further report that in our opinion:
concern basis of accounting unless management either ï Evaluate the appropriateness of accounting policies
intends to liquidate the Company or to cease operations, used and the reasonableness of accounting estimates
a) proper books of account have been kept by the
or has no realistic alternative but to do so. and related disclosures made by management.
Company as required by the Companies Act, 2017
(XIX of 2017) ;
Board of directors are responsible for overseeing the ï Conclude on the appropriateness of management’s
Company’s financial reporting process. use of the going concern basis of accounting and,
b) the statement of financial position, the statement of
based on the audit evidence obtained, whether
profit or loss, the statement of comprehensive income,
a material uncertainty exists related to events or
the statement of changes in equity and the statement
64 65
STATEMENT OF FINANCIAL POSITION
As at December 31, 2022
Note 2022 2021 Note 2022 2021

Rupees Rupees Rupees Rupees
EQUITY AND LIABILITIES ASSETS
Share capital and reserves Non-current assets

Property, plant and equipment 16 8,138,695,696 8,521,211,562
Authorized share capital 4 28,000,000,000 18,000,000,000 Intangible assets 17 5,929,326 1,572,247
Security deposits 9,539,947 6,606,122
Issued, subscribed and paid up share capital 4 15,840,881,590 15,840,881,590 Deferred taxation - net 18 – –
Capital Reserves 8,154,164,969 8,529,389,931
Share premium 5 1,835,148,153 1,854,498,097
Share deposit money 6 2,708,749,801 –
Surplus on revaluation of property, plant and
equipment - net of tax 7 2,131,898,795 2,225,644,056 Current assets
Revenue Reserve Stores, spares and loose tools 19 185,095,995 183,210,631
Accumulated loss (18,469,229,527) (16,395,504,505) Stock-in-trade 20 1,239,691,594 707,587,224
4,047,448,812 3,525,519,238 Trade debts - considered good 21 557,499,467 566,068,117
Non-current liabilities Loans and advances - considered good 22 149,550,153 122,430,288
Long term loans - secured 8 5,482,593,723 5,988,149,276 Deposits, prepayments and other receivables 23 198,461,867 82,155,615
Lease liabilities 9 53,570,131 129,188,382 Interest accrued 24 40,973,562 –
Employee retirement benefits 10 30,795,946 75,255,499 Sales tax refundable - net 1,275,508,594 740,111,000
5,566,959,800 6,192,593,157 Income tax recoverable 1,269,852,300 1,359,883,804
Current liabilities Cash and cash equivalents 25 1,145,482,229 1,873,907,189
Current portion of long term liabilities 11 579,001,285 112,260,832 6,062,115,761 5,635,353,868
Short term borrowings - secured 12 1,705,540,931 1,933,798,755
Trade and other payables 13 1,755,021,988 995,323,636
Unclaimed dividends 965,752 965,752
Accrued finance cost 14 402,289,522 1,267,924,682
Provision for taxation 159,052,640 136,357,747
4,601,872,118 4,446,631,404
Contingencies and commitments 15
14,216,280,730 14,164,743,799 14,216,280,730 14,164,743,799
The annexed notes from 1 to 46 form an integral part of these financial statements.
Chairman Chief Executive Officer Director Chief Financial Officer
66 67
STATEMENT OF PROFIT OR LOSS STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2022 For the year ended 31 December 2022
Note 2022 2021 2022 2021

Rupees Rupees Rupees Rupees
Revenue from contracts with customers - net 26 12,350,702,418 8,586,396,344 Loss for the year (2,168,510,518) (1,252,942,258)
Cost of revenue 27 (11,380,034,184) (7,663,661,981)
Gross profit 970,668,234 922,734,363 Other comprehensive income

Marketing and distribution expenses 28 (1,338,285,748) (1,019,059,263) Other comprehensive income that may be reclassified
Administrative expenses 29 (448,145,750) (360,822,937) to profit or loss in subsequent periods (net of tax) – –
Loss from operations (815,763,264) (457,147,837)
Other comprehensive income that will not be reclassified
Other income 30 199,400,052 76,233,076 to profit or loss in subsequent periods (net of tax):
Other expenses 31 (133,328,146) (523,991)
Finance cost 32 (1,259,766,520) (1,155,050,524) Remeasurement gain on defined benefit plans 1,040,235 9,331,092
Loss before taxation (2,009,457,878) (1,536,489,276)
Revaluation surplus during the year – 1,423,600,647
Income tax expense 33 (159,052,640) 283,547,018 Deferred tax on revaluation surplus during the year – (405,588,641)
– 1,018,012,006
Loss for the year (2,168,510,518) (1,252,942,258) Total comprehensive loss for the year (2,167,470,283) (225,599,160)

Loss per share - basic and diluted 34 (1.37) (0.79) The annexed notes from 1 to 46 form an integral part of these financial statements.

Chairman Chief Executive Officer Director Chief Financial Officer Chairman Chief Executive Officer Director Chief Financial Officer
68 69
STATEMENT OF CHANGES IN EQUITY STATEMENT OF CASH FLOWS
For the year ended 31 December 2022 For the year ended 31 December 2022
Revenue Note 2022 2021

Capital Reserve
reserves Rupees Rupees
Issued, sub-
scribed and Surplus on
paid-up revaluation of Total Cash flows from operating activities
Share Share deposit Accumulated
capital premium money
property, plant
loss Loss before taxation (2,009,457,878) (1,536,489,276)
and equipment-
net of tax Adjustments for non-cash items:
Rupees
Depreciation on property, plant and equipment 16.6 497,112,893 418,435,536
Amortization of intangible assets 29 402,418 18,780,896
As at 01 January 2021 8,032,935,630 1,922,317,157 – 1,243,724,345 (15,187,985,634) (3,989,008,502) Gain on disposal of property, plant and equipment 30 (1,393,407) (43,723,546)
Parent loan 5,925,000,000 – – – – 5,925,000,000 Provision / write off for obsolete stock 20 29,882,174 –
Accrued markup 1,882,945,960 – – – – 1,882,945,960
Profit on saving accounts 30 (37,974,751) (12,226,916)
Profit on Term Deposit Receipts (TDRs) 30 (141,124,932) –
Share issuance cost – (67,819,060) – – – (67,819,060)
Allowance for expected credit losses 21 89,444,266 –
Conversion of debt to equity (net of Provision for employee retirement benefits 26,810,003 29,650,329
transaction cost) 7,807,945,960 (67,819,060) – – 7,740,126,900 Finance cost 32 1,259,766,520 1,155,050,524
Loss for the year – – – – (1,252,942,258) (1,252,942,258) Operating profit / (loss) before working capital changes (286,532,694) 29,477,547
Effect on cash flows due to working capital changes
Other comprehensive income for the year – – – 1,018,012,006 9,331,092 1,027,343,098
(Increase) / decrease in current assets:
Total comprehensive loss – – – 1,018,012,006 (1,243,611,166) (225,599,160) Stores, spares and loose tools (1,885,364) 7,932,906
Disposal of plant and machinery - net of tax – – – (590,954) 590,954 – Stock-in-trade (561,986,544) (163,604,411)
Incremental depreciation relating to surplus Trade debts (80,875,616) (215,218,012)
on revaluation - net of tax – – – (35,501,341) 35,501,341 – Loans and advances (27,119,865) 12,820,901
Deposits, prepayments and other receivables (116,306,252) (3,106,601)
Surplus transferred to accumulated losses – – – (36,092,295) 36,092,295 –
Sales tax refundable (535,397,594) (103,461,617)
increase / (decrease) in current liabilities
Balance as at 31 December 2021 15,840,881,590 1,854,498,097 – 2,225,644,056 (16,395,504,505) 3,525,519,238 Trade and other payables 759,698,352 121,822,954
Loss for the year – – – – (2,168,510,518) (2,168,510,518) (563,872,883) (342,813,880)
Cash flows used in operations (850,405,577) (313,336,333)
Other comprehensive income for the year – – – – 1,040,235 1,040,235
Income tax paid (46,326,243) (45,512,732)
Total comprehensive loss – – – – (2,167,470,283) (2,167,470,283) Employee benefits paid (70,229,321) (22,233,682)
Share issuance cost – (19,349,944) – – – (19,349,944) Net cash flows used in operating activities (969,894,966) (381,082,747)
Share deposit money – – 2,708,749,801 – – 2,708,749,801 Cash flows from investing activities
Surplus transferred to accumulated losses Acquisition of property, plant and equipment (122,817,080) (34,598,712)
Sale proceeds from disposal of property, plant and equipment 4,853,963 128,317,148
Incremental depreciation relating to surplus
Profit on saving accounts 37,974,751 12,226,916
on revaluation - net of tax – – – (93,745,261) 93,745,261 – Profit on Term deposit receipts 100,151,370 –
Balance as at 31 December 2022 15,840,881,590 1,835,148,153 2,708,749,801 2,131,898,795 (18,469,229,527) 4,047,448,812 Net cash flows generated from investing activities 20,163,004 105,945,352
Cash flows from financing activities
The annexed notes from 1 to 46 form an integral part of these financial statements. Repayment of long term loans (50,457,824) (128,975,214)
Short term borrowings - net (228,974,159) (156,281)
Repayment of principal portion of lease liabilities (63,975,527) (63,738,308)
Finance cost paid (1,416,651,879) (420,758,227)
Proceeds received against issuance of right shares – 1,882,945,960
Share deposit money received from Fauji Foundation 2,000,000,000 –
Share issuance cost (19,349,944) (67,819,060)
Net cash flows generated from financing activities 43 220,590,667 1,201,498,870
Net (decrease) / increase in cash and cash equivalents (729,141,295) 926,361,475
Cash and cash equivalents - at beginning of the year 169,082,593 (757,278,882)
Cash and cash equivalents - at end of the year 35 (560,058,702) 169,082,593
Cash and cash equivalents comprise of the following:
Cash and bank balances 25 1,145,482,229 1,873,907,189
Running finances 12 (1,705,540,931) (1,704,824,596)
(560,058,702) 169,082,593
Chairman Chief Executive Officer Director Chief Financial Officer Chairman Chief Executive Officer Director Chief Financial Officer
70 71
NOTES TO THE FINANCIAL STATEMENTS
1 THE COMPANY AND ITS ACTIVITIES – International Financial Reporting Standards (IFRS Standards) issued by the International
1.1 Corporate and general information Accounting Standards Board (IASB) as notified under the Companies Act, 2017; and
Fauji Foods Limited (the Company) was incorporated in Pakistan on 26 September 1966 as a Public – Provisions of and directives issued under the Companies Act, 2017
Company under the Companies Act, 2017. The shares of the Company are listed on Pakistan Stock
Exchange. The Company is a subsidiary of Fauji Fertilizer Bin Qasim Limited (the Parent Company). The Where provisions of and directives issued under the Companies Act, 2017 differ from the IFRS Standards,
Company is principally engaged in processing and sale of toned milk, milk powder, fruit juices, allied dairy the provisions of and directives issued under the Companies Act, 2017 have been followed.
and food products. Following are the business units of the Company along with their respective locations:
2.2 Basis of measurement
Business Unit Location
These financial statements have been prepared under the historical cost convention except for the
Production Plant Bhalwal, District Sargodha measurement of certain items of property, plant and equipment as referred to in note 17 which are carried
Registered Office and Head Office 42 CCA, Ex Park View, DHA Phase-VIII, Lahore at revalued amounts, while recognition of lease liability and employee retirement benefits as referred to in
note 9 and 10 are carried at present value respectively.
1.2 During the year ended 31 December 2022, the Company has incurred a loss after tax of Rs. 2,168.51
million (2021: Rs. 1,252.94 million), resulting in accumulated losses of Rs. 18,469.23 million (31 December 2.3 Functional and presentation currency
2021: Rs. 16,395.50 million) as of that date. Accordingly, the Company’s operations are being financed
via further sponsor support / equity injection and high level of external debt. As of 31 December 2022, These financial statements are presented in Pakistan Rupees which is the Company’s functional currency
the Company’s total debt amounts to Rs. 7,693.69 million (31 December 2021: Rs. 7,972.41 million). The and all financial information presented has been rounded off to the nearest rupees, except otherwise stated.
Parent Company has committed the necessary continued financial support to the Company, including (but
not limited to) equity injections and providing working capital as and when required. Further, following are 2.4 Significant Estimates and Judgements
the key measures which have been taken by the Parent Company and the Sponsors of the Parent Company The preparation of financial statements in conformity with the accounting and reporting standards as
to support the Company: applicable in Pakistan requires management to make judgements, estimates and assumptions that affect
the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures,
1. Existing and potential shareholders of the Company, all entities under common control with the Company, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result
have also approved equity injection, through other than right issue, into the Company amounting to Rs. in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in
11,708.75 million, out of which Rs. 11,000 million will be in cash. The Ultimate Parent Company has already future periods.
injected Rs. 2,000 million. The aforesaid amount of equity shall be used to settle the borrowings of the
Company and for working capital support and capital expenditure of the Company. Estimates and assumptions
The assumptions concerning the future and other key sources of estimation uncertainty at the reporting
2. Interest accrued on loan to the Parent Company, is being converted into the share capital and approval date, that have a significant risk of causing a material adjustments to the carrying amounts of assets and
of shareholders of the Parent Company have been obtained and corporate compliances are in process. liabilities within the next financial year are described below. The Company based it’s assumptions and
estimates on the parameters under which these financial statements were prepared. Existing circumstances
3. Company’s Sponsors have also provided security, on behalf of the Company, in respect of the Company’s and assumptions about the future development may change due to market changes or circumstances
syndicate loan facility (amounting to Rs. 5,988.15 million, refer to note 8 in the form of (a) a letter of credit arising that are beyond the control of the Company. Such changes are reflected in the assumptions when
amounting to Rs. 1,000 million from Askari Bank Limited, a related party, and (b) a revolving corporate they occur.
guarantee.
2.5 Useful lives and residual value of property, plant and equipment
In addition to the above, the Company has formulated a formal business plan and is undertaking margin
improvement initiatives and a differentiated marketing strategy to build efficiencies in the distribution The Company reviews the useful lives and residual value of property, plant and equipment on a regular
channels. basis. Any change in estimates in future years might affect the carrying amounts of the respective items of
property, plant and equipment with a corresponding effect on the depreciation charge.
Based upon the above, the management has concluded that there is no material uncertainty regarding
going concern of the Company and accordingly, these financial statements have been prepared on a going 2.6 Revaluation of property, plant and equipment
concern basis. Revaluation of property, plant and equipment is carried out by independent professional valuers. Revalued
amounts of non-depreciable items are determined by reference to local market values and that of
2 BASIS OF PREPARATION depreciable items are determined by reference to present depreciated replacement values.
2.1 Statement of compliance
2.7 Valuation of stock in trade
These financial statements have been prepared in accordance with the accounting and reporting standards
as applicable in Pakistan. The accounting and reporting standards applicable in Pakistan comprise of: The Company reviews the carrying amount of stock in trade, stores and spares on an annual basis, and as
appropriate, inventory is written down to its net realizable value, or a provision is made for obsolescence if
there is any change in the usage pattern and physical form of related inventory. Net realizable value signifies
the estimated selling price in the ordinary course of business, less the estimated costs of completion and
the estimated costs necessary to make the sale.
72 73
2.8 Impairment of non financial assets 2.13 Staff retirement gratuity

Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable Defined benefit plan is provided for permanent employees of the Company. The plan is typically structured
amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less as a separate legal entity managed by trustees. Calculations in this respect require assumptions to be
costs of disposal calculation is based on available data from binding sales transactions, conducted at made of future outcomes, the principal ones being in respect of mortality rate, withdrawal rate, increase in
arm’s length, for similar assets or observable market prices less incremental costs of disposing of the remuneration and the discount rate used to convert future cash flows to current values. Calculations are
asset. The value in use calculation is based on a DCF model. The cash flows are derived from the budget sensitive to changes in the underlying assumptions.
for the next five years and do not include restructuring activities that the Company is not yet committed to or
significant future investments that will enhance the performance of the assets being tested. The recoverable 2.14 Sales tax refundable
amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows Management has classified the whole of the amount of sales tax refundable as current asset based on the
and the growth rate used for extrapolation purposes. assessment that either the amount will be refunded in the next year or related settlement of amounts due to
Government, within next twelve months will include refund of Sales tax.
2.9 Estimation of provisions
As the actual outflows can differ from estimates made for provisions due to changes in laws, regulations, 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
public expectations, technology, prices and conditions, and can take place many years in the future, the The significant accounting policies set out below have been consistently applied to all periods presented in
carrying amounts of provisions are reviewed at each reporting date and adjusted to take account of such these financial statements.
changes. Any adjustments to the amount of previously recognised provision is recognised in the statement
of profit or loss unless the provision was originally recognised as part of cost of an asset. 3.1 Taxation
2.10 Taxation Current
The Company takes into account the current income tax law and decisions taken by the taxation authorities. Provision for current tax is based on the taxable income for the year determined in accordance with the
Instances where the Company’s views differ from the views taken by the income tax department at the prevailing law for taxation of income. The charge for current tax is calculated using prevailing tax rates or tax
assessment stage and where the Company considers that its view on items of material nature is in rates expected to apply to the profit for the year if enacted, after taking into account tax credits, rebates and
accordance with law, the amounts are shown as contingent liabilities. exemptions, if any. The charge for current tax also includes adjustments, where considered necessary, to
provision for tax made in previous years arising from assessments framed during the year for such years.
2.11 Allowance for expected credit losses
The Company uses a provision matrix to calculate ECLs for trade receivables. The provision rates are Deferred
based on days past due for groupings of various customer segments that have similar loss patterns (i.e., Deferred tax is accounted for using the balance sheet method in respect of all temporary differences
by geography, product type, customer type and rating, and coverage by letters of credit and other forms of arising from differences between the carrying amount of assets and liabilities in the financial statements
credit insurance). and the corresponding tax bases used in the computation of the taxable profit. However, deferred tax
is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than
The provision matrix is initially based on the Company’s historical observed default rates. the Company a business combination that at the time of transaction neither affects accounting nor taxable profit or
will calibrate the matrix to adjust the historical credit loss experience with forward-looking information. For loss. Deferred tax liabilities are generally recognized for all taxable temporary differences and deferred tax
instance, if forecast economic conditions (i.e., gross domestic product) are expected to deteriorate over assets are recognized to the extent that it is probable that taxable profits will be available against which the
the next year which can lead to an increased number of defaults in the manufacturing sector, the historical deductible temporary differences, unused tax losses and tax credits can be utilized. The carrying amount
default rates are adjusted. At every reporting date, the historical observed default rates are updated and of all deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer
changes in the forward-looking estimates are analysed. probable that sufficient taxable profits will be available to allow all or part of the deferred tax assets to be
utilized.
The assessment of the correlation between historical observed default rates, forecast economic conditions
and ECLs is a significant estimate. The amount of ECLs is sensitive to changes in circumstances and of Deferred tax is calculated at the rates that are expected to apply to the period when the differences reverse
forecast economic conditions. the Company’s historical credit loss experience and forecast of economic based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
conditions may also not be representative of customer’s actual default in the future. Deferred tax is charged or credited in the statement of profit or loss, except in the case of items credited
or charged to other comprehensive income or equity in which case it is included in other comprehensive
2.12 Compensated absences income or equity.
Compensated absences is granted to all its permanent employees in accordance with the rules of the
Company. Calculations in respect of unutilized privileged leaves accumulated as on April 30, 2021 require 3.2 Leases
assumptions to be made of future outcomes, the principal ones being in respect of mortality rate, withdrawal At the inception of a contract, the Company assesses whether a contract is or contains lease. A contract
rate, increase in remuneration and the discount rate used to convert future cash flows to current values. is, or contains, a lease if the contract conveys a right to control the use of an identified asset for a period of
Calculations are sensitive to changes in the underlying assumptions. time in exchange for consideration. To assess whether a contract conveys the right to control the use of an
identified asset, the Company uses the definition of a lease in IFRS 16.
74 75
The Company recognizes a right of use asset and a lease liability at the lease commencement date. The Company uses the actuarial valuations carried out using the projected unit credit method for valuation
The right of use asset is initially measured at cost which comprises the initial amount of the lease liability of its accumulated compensating absences. The latest valuation was carried out on 31 December 2021.
adjusted for any lease payments made at or before the commencement date plus any initial direct cost Provisions are made annually to cover the obligation for accumulating compensated absences based
incurred less any lease incentive received. The right of use assets except for plant and machinery is on actuarial valuation and are charged to the statement of profit or loss. The amount recognized in the
subsequently measured at cost less accumulated depreciation and impairment losses, and adjusted for statement of financial position represents the present value of the defined benefit obligations. Actuarial
certain re-measurements of the lease liability, if any. Right of use assets in respect of plant and machinery gains and losses are charged to the statement of profit or loss immediately in the period when these occur.
are stated at revalued amount carried out by independent valuers by reference to current market price
less accumulated depreciation and any identified impairment loss. The right of use assets are depreciated 3.3.3 Defined benefit plan
using the straight line method from the commencement date to the end of the lease term, unless the lease The Company operates an funded defined benefit gratuity plan for all permanent employees, having
transfers ownership of the underlying asset to the Company by the end of the lease term or cost of the right a service period of more than three years for retired army officers and more than five years for other
of use asset reflects that the Company will exercise a purchase option. In that case the right of use asset employees. The Company recognizes expense in accordance with IAS 19 “Employee Benefits”.
will be depreciated over the useful life of the underlying asset, which is determined on the same basis as
those of property, plant and equipment. Right of use asset is disclosed in the property, plant and equipment The Company’s net obligation in respect of defined benefit plans is calculated by estimating the amount
as referred to in 17.1 of the financial statements. of future benefit that employees have earned in the current and prior periods and discounting that amount.
The calculation of defined benefit obligations is performed by a qualified actuary using the projected unit
The lease liability is initially measured at the present value of the lease payments that are not paid at the credit method. The latest valuation was carried out on 31 December 2022.
commencement date, discounted using the interest rate implicit in the lease or if that rate cannot be readily
determined, the Company’s incremental borrowing rate. The Company has used it incremental borrowing Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, are
rate as the discount rate for leases where rate is not readily available. The lease liability is subsequently recognized immediately in other comprehensive income. The Company determines the net interest expense
increased by the interest cost on the lease liability and decreased by lease payment made. on the net defined benefit liability for the period by applying the discount rate used to measure the defined
benefit obligation at the beginning of the annual period to the then net defined benefit liability, taking into
The lease liability is measured at amortized cost using the effective interest method. It is re-measured when account any changes in the net defined benefit liability during the period as a result of contributions and
there is a change in future lease payments arising from a change in rate or a change in the terms of the benefit payments. Net interest expense and other expenses related to defined benefit plan are recognized
lease arrangement, if there is change in the Company’s estimate of the amount expected to be payable in the statement of profit or loss. Past service costs are immediately recognized in statement of profit or
under a residual value guarantee, if the Company changes its assessment of whether it will exercise a loss.
purchase, extension or termination option or if there is a revised in-substance fixed lease payment. When
the lease liability is re-measured in this way, a corresponding adjustment is made to the carrying amount of 3.4 Trade and other payables
the right of use asset, or is recorded in statement of profit or loss if the carrying amount of the right of use
asset has been reduced to zero. Refer note 9 to these financial statements for disclosure of lease liability. Trade and other payables are obligations to pay for goods and services that have been acquired in the
ordinary course of business from suppliers. Account balances are classified as current liabilities if payment
Short term leases and leases of low value assets is due within one year or less (or in the normal operating cycles of business if longer). If not, they are
classified as non-current liabilities.
The Company has elected not to recognize right of use assets and liabilities for some leases of low value
assets (milk collection centers/sales offices). The Company recognizes the lease payments associated Trade and other payables are recognized initially at fair value and subsequently measured at amortized
with these leases as an expense on a straight line basis over the lease term. cost using the effective interest method. Exchange gains and losses arising on translation in respect of
liabilities in foreign currency are added to the carrying amount of the respective liabilities.
3.3 Employees’ retirement benefits
3.3.1 Defined contribution plan 3.5 Provisions
Provident fund Provisions are recognized when the Company has a present legal or constructive obligation as a result of
The Company is operating an approved provident fund scheme for all its employees since 01 May 1986. past events, it is probable, will result in an outflow of resources embodying economic benefits, to settle the
Equal monthly contributions are made by the employer and the employee to the fund in accordance with obligation and a reliable estimate of the amount can be made. Provisions are reviewed at each reporting
the fund rules at the rate of 10% of basic salary. date and adjusted to reflect the current best estimate.
3.3.2 Accumulated compensated absences 3.6 Contingent liabilities
The Company provides for compensated absences for all eligible employees in accordance with the rules A contingent liability is disclosed when:
of the Company. The Company accounts for these benefits in the year in which the absences are earned.
Retired army officers and other employees are entitled to earned leaves of 30 days and 20 days per annum – there is a possible obligation that arises from past events and whose existence will be confirmed
respectively. The unutilized leaves are accumulated subject to a maximum of 120 days for ex-servicemen only by the occurrence or non-occurrence of one or more uncertain future events not wholly within
and 20 days for management & 28 days for non-management employees. The unutilized accumulated the control of the Company; or
leaves can be enchased at the time the employee leaves Company service. The accumulated leave balance
in excess of above mentioned limits is ignored while determining benefit obligations. – there is present obligation that arises from past events but it is not probable that an outflow of
resources embodying economic benefits will be required to settle the obligation or the amount of
the obligation cannot be measured with sufficient reliability.
76 77
3.7 Borrowings Depreciation on additions to property, plant and equipment is charged from the month in which an asset is
Loans and borrowings are classified as financial liabilities at amortized cost. Borrowings are recognized acquired or capitalized while no depreciation is charged for the month in which the asset is disposed-off.
initially at fair value, net of transaction costs incurred and are subsequently measured at amortized cost Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as
using the effective interest rate method. Borrowings are classified as current liabilities unless the Company appropriate, only when it is probable that future economic benefits associated with the item will flow to the
has an unconditional / contractual right to defer settlement of the liability for at least twelve months after the Company and the cost of the item can be measured reliably. All other repairs and maintenance are charged
reporting date. to statement of profit or loss during the year in which these are incurred.
Finance cost are accounted for on an accrual basis and are included in accrued finance cost to the extent The gain or loss on disposal or retirement of an asset represented by the difference between the sale
of the remaining amount unpaid. proceeds and the carrying amount of the asset is recognized as an income or expense.
3.8 Borrowing costs The Company assesses at each reporting date whether there is any indication that property, plant and
equipment may be impaired. If such indication exists, the carrying amount of such assets are reviewed to
General and specific borrowing costs directly attributable to the acquisition, construction or production of assess whether they are recorded in excess of their recoverable amount. Where carrying values exceed
qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their the respective recoverable amount, assets are written down to their recoverable amounts and the resulting
intended use or sale, are added to the cost of those assets, until such time as the assets are substantially impairment is recognized in statement of profit or loss. The recoverable amount is the higher of an asset’s
ready for their intended use or sale. All other borrowing costs are recognized in statement of profit or loss fair value less cost to sell and value in use. Where an impairment loss is recognized, the depreciation
in the period in which they are incurred. charge is adjusted in the future periods to allocate the asset’s revised carrying amount over its estimated
useful life.
3.9 Property, plant and equipment
Property, plant and equipment except for freehold land, buildings on freehold land, plant and machinery, Capital work-in-progress
electric and gas installations, milk churns and other work equipment are stated at cost less accumulated Capital work-in-progress is stated at cost less identified impairment loss, if any. It consists of all expenditures
depreciation and identified impairment loss. Freehold land is stated at revalued amount carried out by and advances connected with specific assets incurred and made during installations and construction
independent valuers by reference to its current market price less any identified impairment loss. Buildings period. These are transferred to relevant property, plant and equipment as and when assets are available
on freehold land, plant and machinery, electric and gas installations, milk churns and other work equipment for use.
are stated at revalued amount carried out by independent valuers by reference to current market price
less accumulated depreciation and any identified impairment loss. Cost in relation to property, plant and 3.10 Intangible assets
equipment comprises acquisition and other directly attributable costs.
Expenditure incurred on intangible asset is capitalized and stated at cost less accumulated amortization
Surplus on revaluation is booked by restating gross carrying amounts of respective assets being revalued, and any identified impairment loss. Intangible assets with finite useful life are amortized using the straight-
proportionately to the change in their carrying amounts due to revaluation. The accumulated depreciation line method over the estimated useful life of three years. Amortization of intangible assets is commenced
at the date of revaluation is also adjusted to equal difference between gross carrying amounts and the from the date an asset is capitalized.
carrying amounts of the assets after taking into account accumulated impairment losses.
3.11 Stores, spares and loose tools
Increase in the carrying amount arising on revaluation of property, plant and equipment is recognized in Usable stores, spares and loose tools are valued principally at moving average cost, while items considered
other comprehensive income and accumulated in equity under the heading of revaluation surplus. Each obsolete are impaired. Items in transit are stated at cost comprising invoice value plus other charges paid
year the difference between depreciation based on the revalued carrying amount of the asset charged to thereon up to the reporting date. The Company reviews the carrying amount of stores, spares and loose
the statement of profit or loss, and depreciation based on the asset’s original cost is transferred to retained tools on a regular basis and provision is made for obsolescence, if there is any change in usage pattern
earnings. Upon disposal, any revaluation reserve relating to the particular assets being sold is transferred and physical form of related stores.
to retained earnings. All transfers to / from surplus on revaluation of property, plant and equipment are net
of applicable deferred tax. 3.12 Stock-in-trade
Stock of raw and packing materials, work-in-process and finished goods, except for those in transit,
Depreciation on all property, plant and equipment, except freehold land, building and plant & machinery is are valued principally at the lower of average cost and net realizable value. Cost in relation to raw and
charged to statement of profit or loss on the reducing balance method so as to write-off the depreciable packing materials is measured at moving average cost. Work-in-process and finished goods are measured
amount of an asset over its remaining estimated useful life after taking into account the impact of their at weighted average cost and cost comprises direct materials, labour and appropriate proportion of
residual value, if considered significant. The assets’ residual values and useful lives are reviewed at each manufacturing overheads.
financial year-end and adjusted if impact on depreciation is significant.
Stock in transit is stated at invoice value plus other charges incurred thereon up to the reporting date.
Useful lives are determined by the management based on expected usage of assets, expected physical
wear and tear, technical and commercial obsolescence, legal and similar limits on the use of the assets and Net realizable value signifies the estimated selling price in the ordinary course of business less estimated
other similar factors. cost of completion and the estimated cost necessary to be incurred to make the sale.
78 79
3.13 Financial instruments Equity Instrument - FVOCI

3.13.1 Recognition and initial measurement On initial recognition of an equity investment that is not held for trading, the Company may irrevocably
All financial assets and financial liabilities are initially recognized when the Company becomes a party to the elect to present subsequent changes in the investment’s fair value in OCI. This election is made on an
contractual provisions of the instruments. investment-by-investment basis.
A financial asset (unless it is a trade receivable without a significant financing component) or financial These assets are subsequently measured at fair value. Dividends are recognized as income in statement
liability is initially measured at fair value plus, for an item not at FVTPL, transaction costs that are directly of profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other
attributable to its acquisition or issue. A trade receivable without a significant financing component is initially net gains and losses are recognized in OCI and these investments are never reclassified to statement of
measured at the transaction price. profit or loss. However, the Company has no such instrument at the reporting date.
3.13.2 Classification and subsequent measurement Fair value through statement of profit or loss (FVTPL)
Financial assets All financial assets not classified as measured at amortized cost or FVOCI as described above are measured
at FVTPL.
On initial recognition, a financial asset is classified as measured at amortized cost, fair value through other
comprehensive income (FVOCI), fair value through statement of profit or loss (FVTPL) and in case of an On initial recognition, the Company may irrevocably designate a financial asset that otherwise meets
equity instrument it is classified as FVOCI or FVTPL. the requirements to be measured at amortized cost or at FVOCI as at FVTPL if doing so eliminates or
significantly reduces an accounting mismatch that would otherwise arise.
Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its
business model for managing financial assets in which case all affected financial assets are reclassified on These assets are subsequently measured at fair value. Net gains and losses, including any interest or
the first day of the first reporting period following the change in the business model. dividend income, are recognized in statement of profit or loss. The Company has no such investments at
the reporting date.
Amortized cost
A financial asset is measured at amortized cost if it meets both of the following conditions and is not Financial assets – Business model assessment
designated as at FVTPL: For the purposes of the assessment, ‘principal’ is defined as the fair value of the financial asset on
initial recognition. ‘Interest’ is defined as consideration for the time value of money and for the credit risk
– it is held within a business model whose objective is to hold assets to collect contractual cash associated with the principal amount outstanding during a particular period of time and for other basic
flows; and lending risks and costs (e.g. liquidity risk and administrative costs), as well as a profit margin.
– its contractual terms give rise on specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding. In assessing whether the contractual cash flows are solely payments of principal and interest, the Company
considers the contractual terms of the instrument. This includes assessing whether the financial asset
These assets are subsequently measured at amortized cost using the effective interest method. The contains a contractual term that could change the timing or amount of contractual cash flows such that it
amortized cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and would not meet this condition. In making this assessment, the Company considers:
impairment are recognized in statement of profit or loss. Any gain or loss on derecognition is recognized in
statement of profit or loss. – contingent events that would change the amount or timing of cash flows;
– terms that may adjust the contractual coupon rate, including variable-rate features;
Financial assets measured at amortized cost comprise of cash and bank balances, deposits, trade debts
and other receivables. – prepayment and extension features; and
– terms that limit the Company’s claim to cash flows from specified assets (e.g. non-recourse
Debt Instrument - FVOCI features).
A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated
as at FVTPL: Financial liabilities
Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified
– it is held within a business model whose objective is achieved by both collecting contractual cash as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial
flows and selling financial assets; and recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any
– its contractual terms give rise on specified dates to cash flows that are solely payments of principal interest expense, are recognized in statement of profit or loss. Other financial liabilities are subsequently
and interest on the principal amount outstanding. measured at amortized cost using the effective interest method, while the interest expense and foreign
exchange gains and losses are recognized in statement of profit or loss. Any gain or loss on derecognition
These assets are subsequently measured at fair value. Interest income calculated using the effective is also recognized in statement of profit or loss.
interest method, foreign exchange gains and losses and impairment are recognized in statement of profit or
loss. Other net gains and losses are recognized in OCI. On derecognition, gains and losses accumulated The Company’s financial liabilities comprise trade and other payables, long term and short term borrowings,
in OCI are reclassified to statement of profit or loss. However, the Company has no such instrument at the loan from the Parent Company, accrued markup and unclaimed dividend.
reporting date.
80 81
3.13.3 Derecognition The Company assumes that the credit risk on a financial asset has increased significantly if it is more
Financial assets than past due for a reasonable period of time. Loss allowances for trade receivables and contract assets
are always measured at an amount equal to lifetime ECLs. Lifetime ECLs are the ECLs that result from
The Company derecognizes a financial asset when the contractual rights to the cash flows from the all possible default events over the expected life of a financial instrument. 12-month ECLs are the portion
financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which of ECLs that result from default events that are possible within the 12 months after the reporting date
substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the (or a shorter period if the expected life of the instrument is less than 12 months). The maximum period
Company neither transfers nor retains substantially all of the risks and rewards of ownership and it does not considered when estimating ECLs is the maximum contractual period over which the Company is exposed
retain control of the financial asset. to credit risk.
The Company might enter into transactions whereby it transfers assets recognized in its statement of Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying
financial position, but retains either all or substantially all of the risks and rewards of the transferred assets. amount of the assets.
In these cases, the transferred assets are not derecognized.
The gross carrying amount of a financial asset is written off when the Company has no reasonable
Financial liabilities expectations of recovering of a financial asset in its entirety or a portion thereof. The Company individually
The Company derecognizes a financial liability when its contractual obligations are discharged or cancelled, makes an assessment with respect to the timing and amount of write-off based on whether there is a
or expire. The Company also derecognizes a financial liability when its terms are modified and the cash reasonable expectation of recovery. The Company expects no significant recovery from the amount written
flows of the modified liability are substantially different, in which case a new financial liability based on the off. However, financial assets that are written off could still be subject to enforcement activities in order to
modified terms is recognized at fair value. On derecognition of a financial liability, the difference between comply with the Company’s procedures for recovery of amounts due.
the carrying amount extinguished and the consideration paid (including any non-cash assets transferred or
liabilities assumed) is recognized in statement of profit or loss. Non - financial assets
The carrying amount of the Company’s non-financial assets, other than inventories and deferred tax assets
3.13.4 Offsetting of financial instruments are reviewed at each reporting date to determine whether there is any indication of impairment. If any such
Financial assets and financial liabilities are offset and the net amount is reported in the statement of financial indication exists, then the asset’s recoverable amount is estimated. The recoverable amount of an asset or
position only when the Company has a legally enforceable right to set off the recognized amounts and cash generating unit is the greater of its value in use and its fair value less cost to sell. In assessing value
intends to either settle on a net basis or realize the asset and settle the liability simultaneously. in use, the estimated future cash flows are discounted to their present values using a pre-tax discount rate
that reflects current market assessments of the time value of money and the risks specific to the asset or
3.13.5 Impairment cash generating unit.
Financial assets
An impairment loss is recognized if the carrying amount of the assets or its cash generating unit exceeds its
estimated recoverable amount. Impairment losses are recognized in statement of profit or loss. Impairment
The Company recognizes loss allowances for ECLs on: losses recognized in respect of cash generating units are allocated to reduce the carrying amounts of the
assets in a unit on a pro rata basis. Impairment losses recognized in prior periods are assessed at each
– financial assets measured at amortized cost; reporting date for any indications that the loss has decreased or no longer exists. An impairment loss
– debt investments measured at FVOCI; and is reversed if there has been a change in the estimates used to determine the recoverable amount. An
impairment loss is reversed only to that extent that the asset’s carrying amount after the reversal does not
– contract assets.
exceed the carrying amount that would have been determined, net of depreciation and amortization, if no
The Company measures loss allowances at an amount equal to lifetime ECLs, except for the impairment loss had been recognized.
following, which are measured at 12-month ECLs:
– debt securities that are determined to have low credit risk at the reporting date; and 3.14 Cash and cash equivalents
– other debt securities, bank balances and other receivables for which credit risk (i.e. the risk of Cash and cash equivalents are carried in the statement of financial position at cost. For the purpose of cash
default occurring over the expected life of the financial instrument) has not increased significantly flow statement, cash and cash equivalents comprise of cash in hand, balances at banks and outstanding
since initial recognition. balance of short term running finances.
12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 3.15 Foreign currency transactions and translation
months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 All monetary assets and liabilities in foreign currencies are translated into Pak Rupees using the exchange
months). rate at the reporting date. Exchange gains and losses resulting from the settlement of such transactions
and from the translations at the year end exchange rates of monetary assets and liabilities denominated in
When determining whether the credit risk of a financial asset has increased significantly since initial foreign currencies are taken to statement of profit or loss. Non-monetary assets and liabilities denominated
recognition and when estimating ECL, the Company considers reasonable and supportable information in foreign currency that are measured in terms of historical cost are translated using the exchange rates as
that is relevant and available without undue cost or effort. This includes both quantitative and qualitative at the dates of the initial transactions. Non-monetary assets and liabilities denominated in foreign currency
information and analysis, based on the Company’s historical experience and informed credit assessment that are measured at fair value are translated using the exchange rates at the date when the fair value was
and including forward-looking information. determined.
82 83
3.16 Revenue recognition Effective date

(annual periods
Revenue represents the fair value of consideration received or receivable for sale of goods, net of sales Standard beginning on or after)
tax, sales returns and related discounts and commissions. Revenue is recognized when or as performance
obligation is satisfied by transferring control of promised goods or services to a customer and control either Presentation of Financial Statements to clarify how to
transfers overtime or point in time. classify debt and other liabilities as current or non-current: In
January 2020, the IASB issued amendments to paragraphs
Return on bank deposits is accrued on a time proportion basis by reference to the principal outstanding 69 to 76 of IAS 1 to specify the requirements for classifying
and the applicable rate of return. liabilities as current or non-current. The amendments clarify:
• What is meant by a right to defer settlement
3.17 Contract liabilities • That a right to defer must exist at the end of the reporting period
• That classification is unaffected by the likelihood
A contract liability is the obligation of the Company to transfer goods or services to a customer for which that an entity will exercise its deferral right
the Company has received consideration (or an amount of consideration is due) from the customer. If a IAS 1 01 January 2024
• That only if an embedded derivative in a convertible
customer pays consideration before the Company transfers goods or services to the customer, a contract liability is itself an equity instrument would the
liability is recognized when the payment is made or the payment is due (whichever is earlier). Contract terms of a liability not impact its classification.
liabilities are recognized as revenue when the Company performs under the contract. It also includes refund • Only covenants with which an entity is required to comply on
liabilities arising out of customers‘ right to claim amounts from the Company on account of contractual or before the reporting date affect the classification of a liability
delays in delivery of performance obligations and incentive on target achievements. as current or non-current. In addition, an entity has to disclose
information in the notes that enables users of financial statements
3.18 Segment reporting to understand the risk that non-current liabilities with covenants
Operating segments are reported in a manner consistent with the internal reporting provided to the chief could become repayable within twelve months.
operating decision maker. The chief operating decision maker, who is responsible for allocating resources Disclosure of Accounting Policies - Amendments to IAS 1 and
and assessing performance of the operating segments, has been identified as the Board of Directors of IFRS Practice Statement 2: The amendments aim to help entities
the Company that makes strategic decisions. On the basis of its internal reporting structure, the Company IAS 1 and IFRS provide accounting policy disclosures that are more useful by:
considers itself to be a single reportable segment. All non-current assets of the Company are located in IFRS Practice • Replacing the requirement for entities to disclose their
Pakistan and 100% of the revenue is derived from sale of dairy and allied products. 01 January 2023
Statement 2 ‘significant’ accounting policies with a requirement to disclose
their ‘material’ accounting policies; and
3.19 Dividends and appropriations to reserves • Adding guidance on how entities apply the concept of materiality
Dividends and appropriations to reserves are recognized in the financial statements in the period in which in making decisions about accounting policy disclosures.
these are approved. Definition of Accounting Estimates - Amendments to IAS 8
- The amendments clarify the distinction between changes
3.20 Sales tax in accounting estimates and changes in accounting policies
IAS 8 01 January 2023
Expenses and assets are recognized net of the amount of sales tax, except: and the correction of errors. Also, they clarify how entities use
measurement techniques and inputs to develop accounting
– When the sales tax incurred on a purchase of assets or services is not recoverable from the estimates.
Taxation authority, in which case, the sales tax is recognized as part of the cost of acquisition of Consolidated Financial Statements & Investment in Associates
the asset or as part of the expense item, as applicable. and Joint Ventures - Sale or Contribution of Assets between an
Investor and its Associate or Joint Venture – (Amendment). The
– When receivables and payables are stated with the amount of sales tax included the net amount of effective date of Amendments to IFRS 10 and IAS 28 has been
IFRS 10
sales tax recoverable from, or payable to, the Taxation authority is included as part of receivables deferred indefinitely (until the research project of IASB, on the Not yet decided
& IAS 28
or payables in the unconsolidated statement of financial position. equity method, has been concluded. Earlier application of the
September 2014 amendments continues to be permitted. The
3.21 Share capital Company expects that the adoption of the amendments will have
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary no material effect on the Company’s financial statements.
shares are recognized as a deduction from equity, net of any related taxes. Leases - Lease Liability in a Sale and Leaseback - Amendments
requires a seller-lessee to subsequently measure lease liabilities
3.22 Amendments to Approved Accounting Standards That are Not Yet Effective arising from a leaseback in a way that it does not recognise
IFRS 16 any amount of the gain or loss that relates to the right of use 01 January 2024
The following amendments with respect to the approved accounting standards, as applicable in Pakistan,
it retains. The new requirements do not prevent a seller-lessee
would be effective from the dates mentioned below and have not been adopted early by the Company:
from recognising in profit or loss any gain or loss relating to the
partial or full termination of a lease.
84 85
Further, the following new standards have been issued by the IASB, which are yet to be notified by the SECP Provisions, Contingent Liabilities and Contingent Assets - Amendments to specify
for the purpose of applicability in Pakistan: that when assessing whether a contract is onerous or loss-making, an entity needs to
include costs that relate directly to a contract to provide goods or services including
Effective date
(annual periods both incremental costs (e.g., the costs of direct labour and materials) and an allocation
Standard beginning on or after) of costs directly related to contract activities (e.g., depreciation of equipment used to
fulfil the contract and costs of contract management and supervision). General and
IFRS 1 First-time Adoption of International Financial Reporting Standards 01 January 2004
administrative costs do not relate directly to a contract and are excluded unless they
IFRS 17 Insurance Contracts 01 January 2023 IAS 37 are explicitly chargeable to the counterparty under the contract. The Company applied
the amendments to the contracts for which it had not fulfilled all of its obligations
The Company expects that the adoption of the above standards will have no material effect on the at the beginning of the reporting period. These amendments had no impact on the
Company’s financial statements, in the period of initial application. financial statements of the Company, as prior to the application of the amendments, the
Company had not identified any contracts as being onerous and the unavoidable costs
3.23 Changes in Accounting Policies and Disclosures Resulting From Amendments in Standards under the contracts, which were the costs of fulfilling them, comprised of incremental
During the year costs directly related to the contracts and an allocation of costs directly related to
The accounting policies adopted in the preparation of these financial statements are consistent with those contract activities.
of the previous financial year, except for following amendments to accounting standards which are effective
for annual periods beginning on or after January 01, 2022 (unless otherwise stated). The Company has not The adoption of the above amendments to accounting standards did not have any material effect on the
early adopted any other standard, interpretation or amendment that has been issued but is not yet effective: financial statement.
In addition to the above amendments to standards, improvements to various accounting standards

Business Combinations – The amendment updates a reference in IFRS 3 to the
(under the annual improvements 2018 - 2020 cycle) have also been issued by the IASB in May 2020. Such
Conceptual Framework for Financial Reporting without changing the accounting
improvements were generally effective for accounting periods beginning on or after January 01, 2022:
requirements for business combinations. The amendments add an exception to the
recognition principle of IFRS 3 Business Combinations to avoid the issue of potential
‘day 2’ gains or losses arising for liabilities and contingent liabilities that would be within Financial Instruments: Fees in the ’10 per cent’ test for derecognition of financial liabilities
the scope of IAS 37 Provisions, Contingent Liabilities and Contingent Assets or IFRIC - The amendment clarifies the fees that an entity includes when assessing whether the
21 Levies, if incurred separately. The exception requires entities to apply the criteria in terms of a new or modified financial liability are substantially different from the terms of
IFRS 03 IAS 37 or IFRIC 21, respectively, instead of the Conceptual Framework, to determine the original financial liability. These fees include only those paid or received between
whether a present obligation exists at the acquisition date. The amendments also add a the borrower and the lender, including fees paid or received by either the borrower
new paragraph to IFRS 3 to clarify that contingent assets do not qualify for recognition or lender on the other’s behalf. There is no similar amendment proposed for IAS 39.
IFRS 9
at the acquisition date. In accordance with the transitional provisions, the Company In accordance with the transitional provisions, the Company applies the amendment
applies the amendments prospectively, i.e., to business combinations occurring after to financial liabilities that are modified or exchanged on or after the beginning of the
the beginning of the annual reporting period in which it first applies the amendments annual reporting period in which the entity first applies the amendment (the date of
(the date of initial application). These amendments had no impact on the financial initial application). These amendments had no impact on the financial statements of the
statements of the Company. Company as there were no modifications of the Company’s financial instruments during
the period.
Property, plant and equipment – Amendment to clarify the prohibition on an entity from
deducting from the cost of an item of property, plant and equipment any proceeds from Leases: Lease incentives – The amendment removes the illustration of payments from
selling items produced while bringing that asset to the location and condition necessary the lessor relating to leasehold improvements in Illustrative Example 13 accompanying
IFRS 16
for it to be capable of operating in the manner intended by management. Instead, an IFRS 16. This removes potential confusion regarding the treatment of lease incentives
entity recognizes the proceeds from selling such items, and the cost of producing those when applying IFRS 16 and had no impact on the financial statements of the Company.
items, in profit or loss. ‘In accordance with the transitional provisions, the Company Agriculture: Taxation in fair value measurements – The amendment removes the
IAS 16
applies the amendments retrospectively only to items of PP&E made available for use requirement in paragraph 22 of IAS 41 that entities exclude cash flows for taxation when
on or after the beginning of the earliest period presented when the entity first applies the IAS 41 measuring the fair value of assets within the scope of IAS 41. These amendments had
amendment (the date of initial application). These amendments had no impact on the no impact on the financial statements of the Company as it did not have assets in scope
financial statements of the Company as there were no sales of such items produced by of IAS 41 as at the reporting date.
property, plant and equipment made available for use on or after the beginning of the
earliest period presented.
86 87
4 ISSUED, SUBSCRIBED AND PAID UP SHARE CAPITAL 5 SHARE PREMIUM

2022 2021 2022 2021 This reserve can only be utilized by the Company for the purpose specified in Section 81(2) of the
(Number of shares) Rupees Rupees Companies Act, 2017. During the year ended, the Company utilized reserve against cost incurred for
increase in authorised share capital.
4.1 Authorized share capital
Shares of Rs. 10 each 2,800,000,000 1,800,000,000 28,000,000,000 18,000,000,000
Note 2022 2021
Rupees Rupees
2022 2021 2022 2021
Rupees 6 SHARE DEPOSIT MONEY
Fauji Foundation 2,000,000,000 –
4.2 Issued, subscribed and
Fauji Fertilizer Bin Qasim Limited 708,749,801 –
paid up capital
6.1 2,708,749,801 –
Ordinary share capital
6.1 These represent the share deposit money convertible into ordinary shares of the Company at Rs. 10 each.
Ordinary shares of Rs.10 each
fully paid in cash 692,228,762 692,228,762 6,922,287,620 6,922,287,620
2022 2021
Ordinary shares of Rs 10 each
Rupees Rupees
issued as fully paid bonus shares 2,639,200 2,639,200 26,392,000 26,392,000
Ordinary shares of Rs 10 each issued 7 SURPLUS ON REVALUATION OF PROPERTY, PLANT
on conversion of loans 882,020,197 882,020,197 8,820,201,970 8,820,201,970 AND EQUIPMENT - NET OF TAX
Voting ordinary shares of Rs.10 each
issued on conversion of 12% cumulative Revaluation surplus as at 01 January 2,857,700,098 1,484,933,668
convertible preference shares 7,200,000 7,200,000 72,000,000 72,000,000 Surplus during the year – 1,423,600,647
1,584,088,159 1,584,088,159 15,840,881,590 15,840,881,590 Surplus transferred to accumulated losses on account of:
- disposal of plant and machinery - net of deferred tax – (590,954)
2022 2021 - incremental depreciation charged during the year
Rupees Rupees - net of deferred tax (93,745,261) (35,501,341)
(93,745,261) (36,092,295)
4.3 Movement during the year is as follows:
Related deferred tax liability
Balance as at 01 January 1,584,088,159 803,293,563
- disposal of plant and machinery – (241,375)
Right shares issued against:
- incremental depreciation charged during the year (38,290,318) (14,500,547)
- Conversion of loan – 592,500,000
(38,290,318) (14,741,922)
- Cash – 188,294,596
Revaluation surplus as at 31 December 2,725,664,519 2,857,700,098
Balance as at 31 December 1,584,088,159 1,584,088,159
Less: Related deferred tax liability on revaluation
surplus at 01 January 632,056,042 241,209,323
4.4 Ordinary shares of the Company held by associated undertakings and directors at year end are
Deferred tax on surplus arisen during the year – 405,588,641
as follows:
Reduction in deferred tax liability due to:
2022 2021 2022 2021 - disposal of plant and machinery – (241,375)
Percentage held (Number of shares) - incremental depreciation charged during the year (38,290,318) (14,500,547)
Ordinary share capital (38,290,318) (14,741,922)
Fauji Fertilizer Bin Qasim Limited Deferred tax liability on revaluation surplus
- voting ordinary shares 71.63% 71.63% 1,134,701,257 1,134,701,257 as at 31 December 593,765,724 632,056,042
Fauji Foundation
- voting ordinary shares 4.25% 4.25% 67,371,916 67,371,916 Revaluation surplus as at 31 December - net of tax 2,131,898,795 2,225,644,056
Directors, Chief Executive, officers and
their spouse and minor children 7.1 The Company revalued its freehold land, buildings on freehold land, plant and machinery, electric and gas
- voting ordinary shares 0.01% 0.01% 148,923 148,923 installations and other works equipment during the financial years 1999, 2011, 2015, 2017 and 2021. The
FFBL Provident Fund latest revaluation was conducted by K.G Traders (independent valuers and consultants) as at 31 December
- voting ordinary shares 0.00% 0.00% – – 2021. Freehold land was revalued on the basis of current market value whereas other assets were revalued
FFBL Gratuity Fund on the basis of depreciated market values. The most significant input into this valuation approach is price
- voting ordinary shares 0.00% 0.00% – – per acre for land, price per square foot for buildings and present operational condition and age of plant and
1,202,222,096 1,202,222,096 machinery and other assets.
4.5 The holders of voting ordinary shares are entitled to receive dividends as declared (if any), and are entitled
to one vote per share at meetings of the Company.
88 89
2022 2021 8.5 The Company had availed a salary refinance facility under SBP circular number IH&SMEFD Circular No. 06
Rupees Rupees and 07 of 2020 dated 10 April 2020 from JS Bank Limited. As per the SBP circular and terms of the facility,
8LONG TERM LOANS - SECURED the facility is repaid in 8 equal quarterly installments starting from January 2021. The facility was priced
Long term loans at 3% and secured against a charge on current and fixed assets at a margin of 25%. During the year all
Syndicate Finance Facility 5,988,149,277 5,988,149,276 instalments under facility had been paid.
Salary Refinance Facility – 50,457,825
5,988,149,277 6,038,607,101 Note 2022 2021
Current maturity presented under current liabilities (505,555,554) (50,457,825) Rupees Rupees
5,482,593,723 5,988,149,276 9LEASE LIABILITIES
Leased vehicles - secured 9.1 – 1,010,561
8.1 A syndicate finance facility is jointly led by Faysal Bank Limited, National Bank of Pakistan, MCB Bank Leased machinery - unsecured 71,998,788 104,013,796
Limited and Allied Bank Limited and participated by Askari Bank Limited, Alfalah Bank Limited, Soneri Bank Leased building - unsecured 55,017,074 85,967,032
Limited, Dubai Islamic Bank Limited whereby the outstanding exposure of all the banks was restructured 127,015,862 190,991,389
into long term and short term exposure on prorata basis. The restructuring was done under the State Bank Current maturity presented under current liabilities 11 (73,445,731) (61,803,007)
of Pakistan’s circular No. BPRD Circular Letter No. 13 of 2020 dated 26 March 2020. 53,570,131 129,188,382
8.2 The bank wise exposure of participant and lead banks after restructuring is as follows: The Company has entered into lease agreements with different commercial banks for vehicles, with a supplier
Mark-up as Tenure and basis of for filling machines and with a landlord for building. The rentals under these agreements are repayable in 24
Note Bank Name Facility 2022 2021 per Agreement principal repayment to 60 monthly and quarterly instalments. The minimum lease payments have been discounted at an implicit
Rupees Rupees interest rate of 8.20% to 13.59% (2021: 8.20% to 13.59% ) per annum to arrive at their present value. At
Allied Bank
the end of the respective lease term, the assets other than building, shall be transferred in the name of the
8.2.1 Term Finance 568,026,750 568,026,750 Company. Taxes, repairs and insurance costs are to be borne by the Company. In case of early termination
Limited
of lease, the lessee shall pay entire amount of rentals for unexpired period of lease agreement.
National Bank of
8.2.2 Term Finance 941,976,909 941,976,909
Pakistan
2022 2021
MCB Bank Demand Up to From one to Up to From one to
8.2.3 1,084,158,027 1,084,158,027 Note Total Total
Limited Finance one year five year one year five year
The loan is repayable Rupees
Faysal Bank
8.2.4 Term Finance 1,733,459,001 1,733,459,001 in 7 years with a grace
Limited a) Leased vehicles - secured
period of 2.5 years.
Askari Bank 3 Months KIBOR plus Particulars
8.2.5 Term Finance 396,544,141 396,544,141 Repayment will be in
Limited 1.5% per annum, Minimum lease payments – – – 1,978,816 – 1,978,816
form of stepped up
Alfalah Bank payable quarterly. Less: Finance costs allocated
8.2.6 Term Finance 247,840,088 247,840,088 quarterly installment
Limited to future periods – – – (153,155) – (153,155)
starting from year 2023
Soneri Bank Demand – – – 1,825,661 – 1,825,661
8.2.7 495,680,176 495,680,176 and ending in year 2027
Limited Finance Less: Security deposits adjustable
on expiry of lease terms – – – (815,100) – (815,100)
JS Bank
8.2.8 Term Finance 247,840,088 247,840,088
limited
Present value of minimum
Dubai
lease payments 9.1 – – – 1,010,561 – 1,010,561
8.2.9 Islamic Bank Term Finance 272,624,097 272,624,097
Limited
b)
Leased machinery - unsecured
Particulars
8.3 The syndicate finance facility is secured by way of pari passu charge amounting to PKR 8,089 Million
Minimum lease payments 44,032,116 36,693,444 80,725,560 44,032,116 80,857,427 124,889,543
inclusive of 25% margin on fixed assets along with mortgage by constructive deposit of title deeds of
Less: Finance costs allocated
property / land measuring 120 kanals and building thereon situated in Mauza Purana Bhalwal, Tehsil
to future periods (6,951,580) (1,775,192) (8,726,772) (11,627,934) (9,247,813) (20,875,747)
Bhalwal, District Sargodha in favour of security agent (i.e. Faysal bank limited). The syndicate finance
37,080,536 34,918,252 71,998,788 32,404,182 71,609,614 104,013,796
facility is additionally secured through sponsor support in the form of Stand by letter of credit amounting to
PKR 1,000 Million from Askari bank limited and a revolving corporate guarantee.
c)
Leased building - unsecured
Particulars
8.4 All these facilities have been clubbed under Master Finance Agreement executed on 21 December 2020
Minimum lease payments 41,921,176 19,479,199 61,400,375 38,710,320 64,730,257 103,440,577
which became effective from 01 August 2020.
Less: Finance costs allocated
to future periods (5,555,981) (827,320) (6,383,301) (10,322,056) (7,151,489) (17,473,545)
36,365,195 18,651,879 55,017,074 28,388,264 57,578,768 85,967,032
90 91
9.1 This represented amount payable to Askari Bank Limited, an associated undertaking. Present value of liability at the year end
Due to increase in assumptions
Note 2022 2021 2022 2021
Rupees Rupees Rupees
10 EMPLOYEE RETIREMENT BENEFITS Discount rate 100 bps 21,121,202 24,766,270 21,588,312 25,822,805
Accumulated compensated absences 10.1 22,871,516 23,611,109 Salary increase 100 bps 24,766,879 21,121,461 25,823,439 21,588,577
Defined benefit plan 10.8 7,924,430 51,644,390
30,795,946 75,255,499 10.7 Maturity profile (Undiscounted payments)

The Company expects to contribute to the gratuity fund on the advice of the fund’s actuary. The contributions
10.1 Movement in accumulated
are equal to the current service cost with adjustment for any deficit
compensated absences
Balance as at 01 January 23,611,109 21,540,928
2022
Charge to statement of profit or loss 10.2 8,499,200 10,797,979
Rupees
Benefits paid during the year (9,238,793) (8,727,798)
Balance as at 31 December 22,871,516 23,611,109 Projected payments
Year 1 5,641,077
10.2 Charge to the statement of profit or loss Year 2 6,052,415
Current service cost 4,677,308 4,583,495 Year 3 7,429,372
Interest on defined benefit liability 997,065 858,851 Year 4 8,163,844
Remeasurement loss 10.3 2,824,827 5,355,633 Year 5 8,765,196
10.4 8,499,200 10,797,979 More than year 5 45,327,185
10.3 Remeasurement loss
Actuarial gain / losses due to changes in Note 2022 2021
financial assumptions 68,166 (3,316,389) Rupees Rupees
Actuarial gain / losses due to experience
10.8
Defined benefit plan
adjustments 2,756,661 8,672,022
Present value of defined benefit obligation 10.10 57,924,430 51,644,390
2,824,827 5,355,633
Fair value of plan assets 10.11 (50,000,000) –
10.4 Allocation of expense during the year
10.9 7,924,430 51,644,390
Cost of sales 3,399,680 4,319,192
Marketing and distribution expense 3,399,680 4,319,191
10.9 Movement in net defined benefit liability
Administrative expense 1,699,840 2,159,596
8,499,200 10,797,979
Current service cost 16,090,145 13,964,743
Interest on net defined benefit liability 2,220,658 4,887,607
2022 2021
Contribution by employer (60,990,528) (13,505,884)
10.5 The principal actuarial assumptions at Charge to other comprehensive income (1,040,235) (9,331,092)
the reporting date were as follows: Balance as at 31 December 7,924,430 51,644,390
Discount rate 13.25% 10.50%
Expected per annum growth rate in salaries 12.25% 9.50% 10.10 Reconciliation of present value of
Expected mortality rate SLIC (2001-2005) SLIC (2001-2005) defined benefit obligation
As at 31 December 2022, average accumulation of leaves is 8 days per annum (2021: 9 days per annum), Current service cost 16,090,145 –
subject to a maximum accumulation of 20 days for management employees, 28 days for non-management Interest on defined benefit liability 4,845,658 18,852,350
employees and 120 days for ex-servicemen (2021: 20 days for management employees, 28 days for non- Benefits paid during the year (10,990,528) (13,505,884)
management employees and 120 days for ex-servicemen). Charge to other comprehensive income (3,665,235) (9,331,092)
Balance as at 31 December 57,924,430 51,644,390
10.6 Sensitivity analysis
If the significant actuarial assumptions used to estimate the present value of liability at the reporting date, 10.11 Reconciliation of fair value of plan assets
had fluctuated by 100 bps with all other variables held constant, the present value of the liability as at 31 Balance as at 01 January – –
December 2022 would have been as follows: Contribution by employer 60,990,528 –
Interest income 2,625,000 –
Benefits paid during the year (10,990,528) –
Return on plan assets excluding interest income (2,625,000) –
Balance as at 31 December 50,000,000 –
92 93
Note 2022 2021 10.18 Sensitivity analysis

Rupees Rupees
If the significant actuarial assumptions used to estimate the defined benefit obligation at the reporting date,
10.12
Charge to the statement of profit or loss had fluctuated by 100 bps with all other variables held constant, the present value of the defined benefit
Current service cost 16,090,145 13,964,743 obligation as at 31 December 2022 would have been as follows:
Interest on defined benefit liability - net 2,220,658 4,887,607
10.13 18,310,803 18,852,350 Present value of defined benefit obligation at year end
Due to increase in assumptions
10.13
Allocation of expense during the year 2022 2021
Cost of sales 8,374,321 7,540,940 Rupees
Marketing and distribution expense 8,374,321 7,540,940
Administrative expense 1,562,161 3,770,470 Discount rate 100 bps 53,492,896 62,724,474 47,221,103 56,483,264
18,310,803 18,852,350 Salary increase 100 bps 62,723,087 53,492,239 56,482,015 47,220,522
10.14
Charge to other comprehensive income Note 2022 2021
- Actuarial (gain) / losses due to change in financial assumptions 131,109 (4,829,525) Rupees Rupees
- Actuarial (gain) / losses due to experience adjustments (3,796,344) (4,501,567) 11 CURRENT PORTION OF LONG
- Return on plan assets excluding Interest income 2,625,000 – TERM LIABILITIES
(1,040,235) (9,331,092) Long term loans - secured 8 505,555,554 –
Lease liabilities 9 73,445,731 61,803,007
10.15 Estimated expense to be charged to Salary refinance-JS bank 8 – 50,457,825
statement of profit or loss in next year 579,001,285 112,260,832
Current service cost 18,530,042
Interest cost on defined benefit obligation - (net) 1,049,987 12
SHORT TERM BORROWINGS - SECURED
19,580,029 Short term running finance 12.1 & 12.4 1,705,540,931 1,704,824,596
Islamic mode of financing 12.2 – 228,974,159
10.16 The principal actuarial assumptions at the reporting date were as follows: 1,705,540,931 1,933,798,755
2022 2021 12.1 Short term running finance

Discount rate 13.25% 10.50% This represents utilized amount of short term running finance facilities (“facilities”) under mark-up
Expected per annum growth rate in salaries 12.25% 9.50% arrangements available from various commercial banks aggregating to Rs 1,705.54 million (31 December
Expected mortality rate SLIC (2001-2005) SLIC (2001-2005) 2021: Rs 1,935.49 million). These facilities are secured against charge over current assets amounting to
PKR 2,500 million inclusive of 20% margin along with charge on fixed assets amounting to PKR 500 million.
As at 31 December 2022, the weighted average duration of the defined benefit obligation was 8 years The facilities carry markup of 3- months KIBOR plus spread of 1.0% per annum (2021: 3 months KIBOR
(2021: 9 years). plus spread of 1.00%) payable quarterly in arrears. These facilities will be expiring in October 2023.
10.17 Maturity profile (Undiscounted payments) 12.2 Islamic mode of financing

The Company expects to contribute to the gratuity fund on the advice of the fund’s actuary. The contributions This represented utilized amount of short term finance facility (Wakala Istithmar) availed from Dubai Islamic
are equal to the current service cost with adjustment for any deficit. bank Limited. The facility was secured against charge over all current assets amounting to PKR 2,500
Million inclusive of 25% margin along with charge on fixed assets (excluding land and building) amounting
2022 to PKR 500 Million. The facility carried mark-up of 3-months KIBOR plus spread of 1.0% per annum (2021:
Rupees 3 months KIBOR plus spread of 1.00%) per annum.
Projected payments
12.3 Unavailed credit facilities
Year 1 6,017,254
Year 2 7,194,739 Out of total facilities for opening of letters of credit of Rs. 150 million (2021: Rs 150 million) as at 31
Year 3 8,306,514 December 2022, unutilized amount as of that date was Rs. 150 million (2021: Rs 150 million).
Year 4 9,468,057
Year 5 10,613,873 12.4 Related party
More than year 5 62,285,460 This includes balance of Rs. 271.80 million (2021: Rs. 273.08 million) payable to Askari Bank Limited, an
associated undertaking.
94 95
Note 2022 2021 15 CONTINGENCIES AND COMMITMENTS

Rupees Rupees
15.1 Contingencies
13
TRADE AND OTHER PAYABLES 15.1.1 The Taxation Officer, after conducting audit under section 177 of the Income Tax Ordinance, 2001 (the
Trade and other creditors 13.1 901,663,249 453,078,380 Ordinance) for the tax year 2005, had passed an amended assessment order under section 122 of the
Contract liabilities 178,556,370 106,149,269 Ordinance raising tax demands of Rs. 34.99 million alleging that the Company suppressed its sales. The
Accrued expenses 622,008,413 386,790,073 Commissioner Inland Revenue-Appeals (CIR-A) annulled this assessment order whereas the Appellate
Retention money payable 2,325,832 2,325,832 Tribunal Inland Revenue (ATIR) had set aside the order of CIR-A and remanded the case back to CIR-A for
Due to employees 5,860,954 2,605,427 denovo proceedings. The CIR-A, vide his order dated 03 September 2012, has allowed partial relief of Rs.
Withholding income tax payable 16,096,715 23,010,176 11.32 million to the Company. The remaining disputed amount after rectification order under section 221 of
Withholding sales tax payable 12,066,996 9,927,557 the Income Tax Ordinance 2001 dated 16 May 2013 out of Rs. 34.99 million now stands at Rs. 18.28 million.
Payable to provident fund 13.2 15,271,097 9,834,572 Both the Company and the Department have filed appeals before the ATIR against the order of CIR-A,
Others 1,172,362 1,602,350 which are pending adjudications.
1,755,021,988 995,323,636
15.1.2 For the year ended June 30, 2012 i-e tax year 2012 amendment order was framed determining tax at Rs.
13.1 These include amounts due to 74,128,663 as against Rs. 22,753,512 conceded in the return. The CIR (Appeals) in his order under section
the following related parties: 129 dated December 31, 2018 has confirmed the action of the ACIR in respect of certain additions and set
Fauji Foundation 4,614,655 1,086,921 aside other matters with directions. The company being aggrieved with the order filled appeal before the
FFBL Power Company Limited – 11,451,017 ATIR, who decided the matter in favor of the Company. The department filed an appeal against the order of
Askari Bank 118,129 – the ATIR before the Honorable Lahore High Court, which is pending adjudication.
4,732,784 12,537,938
15.1.3 Company was selected for audit under section 214C for Tax year 2014 as per list published by FBR. For
13.1.1 These are un-secured, interest free and in the normal course of business for purchase of goods or services. the Tax year 2014, The Department order in this case has resulted in demand of Rs. 5,923,267 as against
refund of Rs. 2,108,564 claimed in the return. Further the Company obtained stay against recovery of
13.2 Employees’ provident fund above tax demand under section 140 of ITO 2001, and also filled appeal before CIR appeals Lahore, who
Investments out of provident fund have been made in accordance with the provisions of Section 218 of the remanded back the case. The Company has filed appeal before ATIR which is pending adjudication.
Companies Act, 2017 and the rules formulated there under.
15.1.4 During the year ended 31 December 2016, Assistant Commissioner Inland Revenue (ACIR) raised sales tax
Note 2022 2021 demand of Rs. 4.84 million under section 11(2) and 11(3) of the Sales Tax Act 1990 against inadmissible
Rupees Rupees refund claim and non-realization of sales tax on sale of scrap during the period from December 2012 to
March 2013. The Company filed an appeal before Commissioner Inland Revenue - Appeals (CIR - A) which
14 ACCRUED FINANCE COST
was decided against the Company dated November 14, 2016. Being aggrieved by the treatment meted
Mark-up based borrowings from conventional banks
out, the Company preferred an appeal before Appellate Tribunal Inland Revenue (ATIR). The ATIR decided
the case in favor of the Company and waived off the whole tax demand against which the Department filed
- Long term borrowings - secured 324,586,005 502,639,977
reference before the Honorable Lahore High Court which is pending adjudication.
- Short term borrowings - secured 14.1 47,703,515 11,166,237
372,289,520 513,806,214
15.1.5 During the year ended 31 December 2018, Assistant Commissioner Inland Revenue (ACIR) through its
Loan from Parent Company - unsecured 14.2 30,000,002 750,540,212
order dated 23 October 2018, raised a sales tax demand for the period from July 2016 to June 2017, under
Islamic mode of financing
section 11(2) and 11(3) of Sales Tax Act, 1990, amounting to Rs. 145.57 million along with penalty of Rs.
- Short term borrowings - secured – 3,578,256
7.28 million against inadmissible adjustment of input tax on goods not related to taxable supplies, non-
402,289,522 1,267,924,682
realization of sales tax on disposal of fixed assets and non-withholding of sales tax from payment made
against advertisement. The Company filed an appeal before Commissioner Inland Revenue - Appeals
14.1 This includes amount of Rs. 7.6 million (2021: 36.91) payable to Askari Bank Limited, an associated
(CIR-A) and demand was reduced to 13m, aggrieved by the order, company filled an appeal before ATIR
undertaking.
which is pending adjudication.
14.2 During the year, the shareholders of the Parent Company have approved to convert the accrued finance
15.1.6 The DCIR has concluded the assessment and proceeding through its order u/s 11(2) for the period from July
cost amounting to Rs. 708 million into ordinary shares of the Company at Rs.10 each and according, the
2019 to December 2019 has charged sales tax amounting Rs. 14,000,000. The company being aggrieved
amount has been reclassified to share deposit money.
by the order filled appeal before CIR appeals who, through order 08/2020 dated 29/10/2020 remanded the
case back to ACIR for re- assessment . The department have filled appeal before ATIR which is pending
adjudication.
96 97
98
16
15.2

farms.
adjudication.
Commitments
Operating fixed assets

(2021: Rs. 7.51 million).
Capital work-in-progress
PROPERTY, PLANT AND EQUIPMENT
before ATIR which is pending adjudication.
order. Department have filed an appeal before ATIR.

16.7
16.1
Note
with CIR appeals on 06 January 2022 which is pending adjudication.
accrue. Accordingly, no provision has been made in these financial statements.
290,839,583
8,138,695,696
7,847,856,113
Rupees
2022
8,521,211,562
239,083,225
8,282,128,337
Rupees
2021
15.2.1 Commitments, for purchase of raw / packing material, outstanding at the year end were for Rs. 66.50 million
of sales tax from payment made against advertisement . Against the show cause notice, the ADCIR raised a
15.1.9 For the Tax year 2013, Amendment order under section 122(5A) has framed on May 16, 2019 wherein
15.1.8 During the year ended 31 December 2018, Assistant Commissioner Inland Revenue (ACIR) issued a show
Based on the opinion of the legal and tax advisors handling the above litigations, the management believes
order in which all the additions mentioned in impugned order were maintained except of exchange gain
decided the case in favor of the company through order 10/2020 dated 29/10/2020 and annulled the ACIR
to Rs. 399.60 million. Against the show cause notice, the ACIR raised a sales tax demand of Rs. 135.34
to taxable supplies and non-withholding of sales tax from payment made against advertisement amounting
July 2016 to December 2016 has charged sales tax amounting Rs. 6,090,000. The company aggrieved by
15.2.2 Guarantees aggregating Rs. 161.61 million (2021: Rs. 17.61 million) have been issued by banks on behalf
that the Company has strong legal grounds against each case and that no financial liability is expected to
against inadmissible adjustment of input tax on goods not related to taxable supplies and non-withholding
to re-examine the issue and then pass speaking order. The Company being aggreived has filed an appeal
was filed before the CIR Appeals against the said additions and refusal to grant tax credit, who passed the
additions for alleged suppressed/Un- reconciled sales has been made at Rs. 43,770,576 and for in admissible
case back to ACIR for re- assessment. The department have filled appeal before ATIR which is pending
cause notice, dated 09 November 2018, against inadmissible adjustment of input tax on goods not related
the order filled appeal before CIR appeals who, through order 09/2020 dated 29/10/2020 remanded the
of the Company to Sui Northern Gas Pipeline Limited, Pakistan State Oil and Remount veterinary and corps
sales tax demand of Rs. 100 Million along with default surcharge and penalty. The Company filed an appeal
15.1.10 During the year ended 31 December 2021, ADCIR issued a show cause notice, dated 17 February 2021
and disallowance of credit under Sec 65 B where additional commissioner inland revenue was instructed
exchange loss amounting to Rs. 4,252,697. Further, turnover tax credit has also been disallowed. Appeal
million along with default surcharge and penalty. The Company filed an appeal with CIR appeals who
15.1.7 The DCIR has concluded the assessment and proceeding through its order u/s 11(2) for the period from
16.1 Operating fixed assets

2022
Cost / Revalued Amount Depreciation
Revaluation Rate of
As at 01 surplus As at 31 As at 01 Charge for As at 31 Book value depreciation
Additions Disposals Transfers Disposals Transfers (%)
January during the December January the year December
year
Rupees
Owned assets:
Freehold land 751,562,500 - - - - 751,562,500 - - - - - 751,562,500 -
Buildings on freehold land 1,343,616,906 154,610 - - - 1,343,771,516 392,240,506 60,476,251 - - 452,716,757 891,054,759 6
Plant and machinery 8,918,081,404 21,967,897 - - - 8,940,049,301 2,880,693,676 358,036,194 - - 3,238,729,870 5,701,319,431 6
Electric and gas installation 25,518,141 893,162 - - - 26,411,303 16,704,701 1,543,176 - - 18,247,877 8,163,426 10
Other works equipment 215,987,617 3,643,300 (2,576,407) - - 217,054,510 64,344,173 11,702,087 (1,705,876) - 74,340,384 142,714,126 10
Office and IT Equipment 132,132,467 19,013,107 - - - 151,145,574 53,477,572 15,734,795 - - 69,212,367 81,933,207 10 & 33.33
Furniture and fixture 49,179,294 381,245 - - - 49,560,539 21,885,716 2,465,354 - - 24,351,070 25,209,469 10
Vehicles 47,803,694 18,622,788 (179,424) - - 66,247,058 26,811,805 4,977,770 (104,710) - 31,684,865 34,562,193 20
11,483,882,023 64,676,109 (2,755,831) - - 11,545,802,301 3,456,158,149 454,935,627 (1,810,586) - 3,909,283,190 7,636,519,111
Right of use assets:
Building 133,686,254 - - - - 133,686,254 69,071,232 26,737,251 - - 95,808,483 37,877,771 20
Plant and Machinery 218,148,553 - - - - 218,148,553 39,232,413 10,862,545 - - 50,094,958 168,053,595 6
Vehicles 48,686,683 - (11,950,875) - - 36,735,808 37,813,382 2,952,355 (9,435,565) - 31,330,172 5,405,636 33.33
400,521,490 - (11,950,875) - - 388,570,615 146,117,027 40,552,151 (9,435,565) - 177,233,613 211,337,002
11,884,403,513 64,676,109 (14,706,706) - - 11,934,372,916 3,602,275,176 495,487,778 (11,246,151) - 4,086,516,803 7,847,856,113
2021
Cost / Revalued Amount Depreciation
Revaluation Rate of
As at 01 surplus As at 31 As at 01 Charge for As at 31 Book value depreciation
Additions Disposals Transfers Disposals Transfers (%)
January during the December January the year December
year
Rupees
Owned assets:
Freehold land 726,543,375 - - 25,019,125 - 751,562,500 - - - - - 751,562,500 -
Buildings on freehold land 1,170,928,431 2,607,388 - 170,081,087 - 1,343,616,906 341,977,831 50,262,675 - - 392,240,506 951,376,400 6
Plant and machinery 7,657,836,170 21,840,180 (104,898,801) 1,138,723,720 204,580,135 8,918,081,404 2,586,289,717 297,742,160 (42,591,069) 39,252,868 2,880,693,676 6,037,387,728 6
Electric and gas installation 23,818,152 - - 1,699,989 - 25,518,141 15,163,066 1,541,635 - - 16,704,701 8,813,440 10
Other works equipment 184,098,862 4,126,157 - 27,762,598 - 215,987,617 51,248,605 13,095,568 - - 64,344,173 151,643,444 10
Office and IT Equipment 126,500,967 5,631,500 - - - 132,132,467 47,470,431 6,007,141 - - 53,477,572 78,654,895 10 & 33.33
Furniture and fixture 48,540,808 638,486 - - - 49,179,294 19,200,983 2,684,733 - - 21,885,716 27,293,578 10
Vehicles 120,139,970 - (72,336,276) - - 47,803,694 86,814,575 2,426,274 (62,429,044) - 26,811,805 20,991,889 20
10,058,406,735 34,843,711 (177,235,077) 1,363,286,519 204,580,135 11,483,882,023 3,148,165,208 373,760,186 (105,020,113) 39,252,868 3,456,158,149 8,027,723,874
Right of use assets:
Building 133,686,254 - - - - 133,686,254 42,333,981 26,737,251 - - 69,071,232 64,615,022 20
Plant and Machinery 362,414,560 - - 60,314,128 (204,580,135) 218,148,553 70,303,501 8,181,780 - (39,252,868) 39,232,413 178,916,140 6
Vehicles 81,945,913 - (33,259,230) - - 48,686,683 48,937,656 9,756,318 (20,880,592) - 37,813,382 10,873,301 33.33
578,046,727 - (33,259,230) 60,314,128 (204,580,135) 400,521,490 161,575,138 44,675,349 (20,880,592) (39,252,868) 146,117,027 254,404,463
10,636,453,462 34,843,711 (210,494,307) 1,423,600,647 - 11,884,403,513 3,309,740,346 418,435,535 (125,900,705) - 3,602,275,176 8,282,128,337
99
16.2 Disposal of property, plant and equipment Note 2022 2021

Cost / Net Proceeds Rupees Rupees
Revalued book from Gain / Mode of Particulars
Amount value disposal (loss) disposal of buyers 16.7 Capital work-in-progress
Rupees
Plant and machinery 228,617,127 223,134,724
Advance against capital expenditure 16.7.1 62,222,456 15,948,501
Office Equipment 16.7.2 290,839,583 239,083,225
Generator 50kva 1,994,077 544,219 521,947 (22,272) Third Party Noon Sugar Mills
Limited 16.7.1 These include advance amounting to Rs.46.27 million (2021: Nil) paid to Foundation Solar Energy (Private)
Vehicles Limited for solar project at plant site.
Corolla Altis - LEC-19-9756 2,606,000 738,008 998,443 260,435 Company Policy Muhammad Ali
16.7.2 This includes Rs. 245.4 (2021: Rs. 245.4) million relating to construction of waste water treatment plant
Assets having net which is in progress. The management has assessed its recoverable value to be higher than the carrying
book value less amount and hence the amount is not impaired.
than Rs.500,000
10,106,629 2,178,328 3,333,572 1,155,244 Note 2022 2021
2022 14,706,706 3,460,555 4,853,962 1,393,407 Rupees Rupees
2021 210,494,307 84,593,602 128,317,148 43,723,546
17
INTANGIBLE ASSETS
16.3 The Company’s land, buildings on freehold land, plant and machinery, electric and gas installations, milk Software 17.1 – 402,421
churns and other work equipment are measured using revaluation model. Had these revaluations not been Capital work-in-progress 17.3 5,929,326 1,169,826
carried out, the carrying amount of freehold land, buildings on freehold land, pltant and machinery, electric 5,929,326 1,572,247
and gas installations and other work equipment would have been as follows:
17.1 Software
2022 2021 2022
Rupees Rupees Cost Depreciation Rate of

As at 01 As at 31 As at 01 Charge for As at 31 December amortization
Freehold land 73,365,999 73,365,999 January
Additions
December January the year December (%)
Buildings on freehold land 670,216,420 716,441,997 Rupees

Plant and machinery - Owned assets 3,942,851,154 4,065,542,191
Plant and machinery - Right of use asset 114,853,700 (39,232,413) Secondary sale system 1,983,860 – 1,983,860 1,983,860 – 1,983,860 –
Electric and gas Installations 5,174,458 5,492,365 Anti-virus 432,032 – 432,032 432,032 – 432,032 –
Other works equipment 107,815,794 115,619,687 Secondary sale system (Tally) 5,996,916 – 5,996,916 5,996,916 – 5,996,916 – 33.33
4,914,277,525 4,937,229,826 SAP - HCM Module 2,110,726 – 2,110,726 1,708,305 402,421 2,110,726 – 33.33
SAP - ERP 56,292,447 – 56,292,447 56,292,447 – 56,292,447 – 33.33
16.4 The latest revaluation was carried on at 31 December 2021 by K.G. Traders (Private) Limited. As per the 66,815,981 – 66,815,981 66,413,560 402,421 66,815,981 –‑
revaluation report, forced sale value of freehold land and buildings on free hold land was Rs. 638.83 million
and Rs. 808.67 million respectively and forced sales value of plant and machinery, milk churns, electric and 2021
gas installations and other works equipment was Rs. 4,776.79 million. Cost Depreciation Rate of
As at 01
Additions
As at 31 As at 01 Charge for As at 31 December amortization
(%)
January December January the year December
16.5 The manufacturing facility of the Company is located at Sargodha Road, Bhalwal, District Sargodha. Total
Rupees
owned area is 120 kanals and 5 marlas and covered area of building is 172,550 square feet.
Secondary sale system 1,983,860 – 1,983,860 1,983,860 – 1,983,860 –

Note 2022 2021
Anti-virus 432,032 – 432,032 432,032 – 432,032 –
Rupees Rupees
Secondary sale system (Tally) 5,996,916 – 5,996,916 5,996,916 – 5,996,916 – 33.33
16.6 The depreciation charge has been SAP - HCM Module 2,110,726 – 2,110,726 1,658,044 50,261 1,708,305 402,421 33.33
allocated as follows: SAP - ERP 56,292,447 – 56,292,447 37,561,812 18,730,635 56,292,447 – 33.33
Cost of sales 27 427,012,649 351,160,345 66,815,981 – 66,815,981 47,632,664 18,780,896 66,413,560 402,421
Marketing and distribution expenses 28 10,851,548 11,960,470
Administrative expenses 29 59,248,696 55,314,721 17.2 Amortization charge has been allocated to administrative expenses (note 29).
497,112,893 418,435,536
17.3 This represents cost in relation of development for a module for capturing data in relation to purchase of
milk which has not yet been integrated with the Company’s ERP.
17.4 Intangibles of Rs. 66,815,981 (2021: Rs. 64,705,255) have been fully amortized
100 101
Note 2022 2021 2021

Rupees Rupees Reversal from / (charge to)
Opening Profit or loss OCI Closing
18
DEFERRED TAXATION - NET Rupees
The deferred tax asset comprises of the following:
Deductible temporary differences: Deductible / (taxable) temporary
- Business losses 18.1 – 1,162,417,618 difference
Unused tax losses 789,405,453 (373,012,165) – 1,162,417,618
- unabsorbed depreciation losses 18.1 1,261,539,225 –
Unused tax credit – – – –
- minimum tax 18.1 – 136,357,747
Minimum Tax U/s 113 14,316,124 (122,041,623) – 136,357,747
- provisions 56,372,111 39,680,226 Provisions 99,206,787 59,526,561 – 39,680,226
1,317,911,336 1,338,455,591 Accelerated tax depreciation allowances (661,690,694) 44,708,854 – (706,399,548)
Less: Taxable temporary differences: Surplus on revaluation of property,
- accelerated tax depreciation allowances - net of lease liability 724,145,611 706,399,548 plant and equipment (241,237,670) 796,407,014 (405,588,641) (632,056,043)
- surplus on revaluation of property, plant and equipment 593,765,725 632,056,043 – 405,588,641 (405,588,641) –
1,317,911,336 1,338,455,591
Deferred taxation - net 18.2 – – Note 2022 2021
Rupees Rupees
18.1 The aggregate unused tax losses and minimum tax credit available to the Company for set off against
19 STORES, SPARES AND LOOSE TOOLS
future taxable profit as at 31 December 2022 amount to Rs. 18,948.90 million (2021: Rs. 20,179.41 million)
Stores 12,472,166 8,917,538
and Rs. 159.05 (2021: Rs. 136.36 million) respectively. The deferred tax asset on absorbed depreciation
Spares 181,236,630 182,905,894
losses amounting to Rs.1,261 (2021: Nil) million has been recognized. 193,708,796 191,823,432
Less: provision for obsolescence (8,612,801) (8,612,801)
18.2 The expiry of tax losses for which no deferred tax asset has been recognized is as follows: 185,095,995 183,210,631

2022 2021 20 STOCK-IN-TRADE
Expiry tax year Name Rupees Rupees Raw and packing material
- In hand 521,653,498 270,624,472
2024 Business loss - TY 2018 2,492,626,346 141,710,613
- In transit 17,225,350 22,463,675
2025 Business loss - TY 2019 2,671,290,831 2,671,290,831 538,878,848 293,088,147
2026 Business loss - TY 2020 3,487,579,099 3,487,579,099 Work-in-process 157,048,335 118,186,971
2027 Business loss - TY 2021 2,353,326,086 3,408,831,285 Finished goods 586,842,076 296,312,106
2028 Business loss - TY 2022 1,133,726,835 1,708,512,145 Less: Provision for obsolescence 20.1 (43,077,665) (30,504,149)
2029 Business loss - TY 2023 1,681,967,977 – 20.2 1,239,691,594 707,587,224
2026 Minimum tax - TY 2023 159,080,097 –
No expiry Unused depreciation loss 779,629,047 4,778,299,857 20.1 Movement in provision for obsolescence
18.3 Movement in deferred tax balances is as follows: Charge for the year 14,259,508 –
Written off during the year (1,685,992) (30,022,544)
2022
Balance as at 31 December 43,077,665 30,504,149
Reversal from / (charge to)
Opening Profit or loss OCI Closing 20.2 The amount charged to the statement of profit or loss on account of write down of finished goods and work-
Rupees in-process to net realizable value amounts to Rs. 3.64 million (2021: Rs. 2.3 million).
Deferred taxation Note 2022 2021

Rupees Rupees
Deductible / (taxable) temporary 21 TRADE DEBTS

difference Unsecured:
- Considered good 557,499,467 566,068,117
Unused tax losses 1,162,417,618 (1,162,417,618) – – - Considered doubtful 111,900,180 22,455,914
Unabsorbed depreciation losses – 1,261,539,225 – 1,261,539,225 Allowance for expected credit loss 21.1 (111,900,180) (22,455,914)
Minimum Tax U/s 113 136,357,747 (136,357,747) – – 557,499,467 566,068,117
21.1 Allowance for expected credit loss
Provisions 39,680,226 16,691,885 – 56,372,311
As at 01 January 22,455,914 22,455,914
Accelerated tax depreciation allowances (706,399,548) (17,746,063) – (724,145,611)
For the year 89,444,266 –
Surplus on revaluation of property,
As at 31 December 111,900,180 22,455,914
plant and equipment (632,056,043) 38,290,318 – (593,765,725)

– – – –
21.2 The agings of these trade debts have been disclosed in Note 40.8 to these financial statements.
102 103
Note 2022 2021 25.1 This carries profit at the rates ranging from 10.75% to 14.5% (2021: 6% to 7.8%) per annum.
Rupees Rupees
22 LOAN AND ADVANCES - UNSECURED 25.2 This includes amount of Rs. 108 million (2021: Rs. 1,453.99) at Askari Bank Limited, a related party.
Due from employees - Considered good 9,029,958 21,588,342
Advances to suppliers - Considered good 22.1 140,520,195 100,841,946 25.3 These carry mark-up at the rate of 15.8% per annum and have one year maturity with premature encashment
149,550,153 122,430,288 option without any surcharge.

22.1 These are interest free and in the normal course of business. 2022 2021
Rupees Rupees
22.2 No loan or advance has been given to Chief Executive or any other Director of the Company. 26 REVENUE FROM CONTRACTS
WITH CUSTOMERS - NET
Note 2022 2021 Gross sales 12,919,391,281 9,466,139,369
Rupees Rupees Less: Sales tax (289,355,529) (458,973,667)
23 DEPOSITS, PREPAYMENTS AND Trade discounts (279,333,334) (420,769,358)
OTHER RECEIVABLES (568,688,863) (879,743,025)
Security deposits 144,098,530 59,701,855 12,350,702,418 8,586,396,344
Prepayments 11,077,484 10,138,807
Other receivables 23.1 43,285,853 12,314,953 26.1 Revenue from contracts with customers relates to local (Pakistan) market and represents sale of dairy and
198,461,867 82,155,615 allied products. Timing of revenue recognition is at point of time.
23.1
Due from associated undertakings - unsecured 26.2 The Company receives consideration from its customers in advance. In rare case credit term of 30 to 90
Noon International (Private) Limited – 39,247 days is allowed.
Fauji Cereals 5,829,210 5,829,210
5,829,210 5,868,457 Note 2022 2021
Rupees Rupees
23.1.1 Maximum outstanding balance with reference to month end balances: 27COST OF SALES
Raw materials consumed 7,807,305,847 4,743,368,897
In the In the
Salaries, wages and other benefits 27.1 202,052,188 198,959,205
month of month of 2022 2021
Freight and forwarding 276,933,561 128,097,183
Rupees
Power and fuel 576,422,508 316,023,441
Fauji Cereals May 2021 May 2021 5,829,210 5,829,210 Packing materials consumed 1,996,705,445 1,741,298,323
Stores and spares consumed 85,632,938 92,801,667
Note 2022 2021 Repair and maintenance 234,457,305 189,835,083
Rupees Rupees Depreciation on property, plant and equipment 16.6 427,012,649 351,160,345
24 INTEREST ACCRUED 24.1 40,973,562 – Rent, rates and taxes 287,913 656,521
Travelling and conveyance 10,627,809 6,938,157
24.1 This represents interest accrued on Term Deposit Receipts (TDRs) of Askari Bank Limited, an associated Communication, establishment & others 874,365 795,677
undertaking. Printing and stationery 1,099,677 659,013
Insurance 4,859,210 8,025,370
Note 2022 2021
Others 11,572,286 998,753
11,635,843,701 7,779,617,635
Rupees Rupees
Adjustment of work-in-process
25 CASH AND CASH EQUIVALENTS Opening stock 118,186,971 173,006,590
Cash-in-hand 88,272 99,015 Closing stock 20 (157,048,335) (118,186,971)
Cash at banks on: (38,861,364) 54,819,619
- Current accounts 8,577,874 1,351,328,377 Cost of goods manufactured 11,596,982,337 7,834,437,254
- Saving accounts 25.1 166,594,592 522,258,306 Adjustment of finished goods
- Dividend accounts 221,491 221,491 Opening stock 326,816,255 156,040,982
25.2 175,393,957 1,873,808,174 Closing stock 20 (543,764,408) (326,816,255)
Term Deposit Receipts (TDRs): (216,948,153) (170,775,273)
- Askari Bank Limited (Associated undertaking) 25.3 970,000,000 – 11,380,034,184 7,663,661,981
1,145,482,229 1,873,907,189
104 105
27.1 Salaries, wages and other benefits include following in respect of employee benefits: Note 2022 2021
Rupees Rupees
2022 2021 Administrative expenses (Continued)
Rupees Rupees Subscription 25,914,145 7,901,722
Provident fund 10,375,862 9,473,900 Legal and professional charges 30,711,596 23,691,876
Long term accumulated compensated absences 3,399,677 4,319,192 Auditors’ remuneration 29.2 2,890,000 1,590,000
Gratuity 7,324,310 7,540,940 Cash security charges 4,717,221 3,995,440
21,099,849 21,334,032 Depreciation on property, plant and equipment 16.6 59,248,696 55,314,721
Amortization of intangible assets 17.2 402,418 18,780,896
In addition, salaries, wages and other benefits relating to milk procurement department amounts to Rs. Others 4,618,291 2,216,969
96.47 million (2021: Rs. 98.31 million) and provident fund amounts to Rs. 2.4 million (2021: Rs. 1.88 million). 448,145,750 360,822,937
Note 2022 2021 29.1 Salaries, wages and other benefits include following in respect of employee benefits:
Rupees Rupees
Note 2022 2021
28
MARKETING AND DISTRIBUTION EXPENSES
Rupees Rupees
Freight and forwarding 164,894,207 134,970,766
Salaries, wages and other benefits 28.1 293,438,640 261,278,989 Provident fund 7,202,203 5,680,024
Repair and maintenance 2,097,158 2,128,315 Long term accumulated compensated absences 1,699,843 2,159,596
Rent, rates and taxes 6,138,774 4,710,401 Gratuity 3,662,161 3,770,470
Travelling and conveyance 11,857,899 7,622,450 12,564,207 11,610,090
Vehicles’ running and maintenance 63,893,415 32,371,944
Advertisement and sales promotion 768,783,394 553,182,762 29.2
Auditors’ remuneration
Insurance 766,507 1,179,266 - Statutory audit fee 1,800,000 1,210,000
Depreciation on property, plant and equipment 16.6 10,851,548 11,960,470 - Half yearly review 315,000 150,000
Communication, establishment and others 15,564,206 9,653,900 - Certification charges 425,000 150,000
1,338,285,748 1,019,059,263 - Out-of-pocket expenses 350,000 80,000
2,890,000 1,590,000
28.1 Salaries, wages and other benefits include following in respect of employee benefits:
30
OTHER INCOME
2022 2021 Income from financial assets
Rupees Rupees Profit on TDRs 25.3 141,124,932 –
Profit on saving accounts 25.1 37,974,751 12,226,916
Provident fund 10,738,008 9,622,933
Income from non-financial assets
Long term accumulated compensated absences 3,399,686 4,319,191
Sale of scrap 18,906,962 20,282,614
Gratuity 7,324,325 7,540,940
Gain on disposal of property, plant and equipment 16.2 1,393,407 43,723,546
21,462,019 21,483,064
199,400,052 76,233,076
29 ADMINISTRATIVE EXPENSES
Salaries, wages and other benefits 29.1 233,904,166 191,949,952
31
OTHER EXPENSES
Travelling and conveyance 4,382,206 4,148,984
Exchange loss 2,351,890 523,991
Directors’ meeting fee 36 15,760,000 13,105,000
Contractual deductions 41,531,990 –
Rent, rates and taxes 1,817,031 1,314,130
Allowance for expected credit losses 21.1 89,444,266 –
Entertainment 2,893,475 1,212,748
133,328,146 523,991
Communication and establishment 14,472,814 13,527,697
Printing and stationery 2,802,506 2,262,153
32
FINANCE COST
Electricity, gas and water 13,500,947 7,926,724
Islamic mode of financing
Insurance 1,121,874 1,586,437
- Short term borrowings 20,818,876 19,359,116
Repair and maintenance 6,157,033 3,028,011
Interest / mark-up on interest / mark-up based loans
Vehicles’ running and maintenance 22,831,331 7,269,477
- Long term loans 910,432,136 493,113,151
- Short term borrowings 277,245,079 599,235,970
- Lease liabilities 22,117,040 30,427,897
Bank charges and commission 29,153,389 12,914,390
1,259,766,520 1,155,050,524
106 107
2022 2021 Factory employees Total employees

Rupees Rupees 2022 2021 2022 2021
Rupees
33TAXATION
Current: 37NUMBER OF EMPLOYEES
- For the year 159,052,640 122,041,623 Total number of employees as
at 31 December 392 430 583 617
Deferred: Average number of employees
- For the year – (405,588,641) during the year 415 500 604 681
159,052,640 (283,547,018)
Capacity Production
33.1 In view of minimum taxation, the reconciliation of accounting profit with tax charge is not considered 2022 2021 2022 2021
meaningful and hence not presented. Rupees
38 CAPACITY AND PRODUCTION

2022 2021 Liquid products - liters 221,312,000 221,312,000 59,041,145 57,077,538
34 LOSS PER SHARE Non - Liquid products - Kg 6,318,709 6,318,709 2,791,413 2,830,496
Loss per share - basic and diluted
Loss for the year Rupees (2,168,510,518) (1,252,942,258) The actual production is according to market demand.
Weighted average number of ordinary shares 39 RELATED PARTY TRANSACTIONS AND BALANCES
in issue during the year Number 1,584,088,159 1,584,088,159 Related parties comprise of parent company, associated companies, directors, entities with common
directorship, post employment plans and key management personnel. Balances are disclosed elsewhere
Loss per share - basic and diluted Rupees (1.37) (0.79) in these financial statements. The Company in the normal course of business carries out transactions with
related parties. Significant transactions with related parties are as follows:
Note 2022 2021
Rupees Rupees Name of Nature of
the Company Relationship transactions 2022 2021
35Cash and cash equivalents Rupees Rupees
Cash and cash equivalents included in the statement
of cash flows comprise the following: Associated Undertakings
Cash and bank balances 25 1,145,482,229 1,873,907,189 Fauji Fertilizer Bin Qasim Parent Company TA/DA, repair and maintenance
Running finance balances 12 (1,705,540,931) (1,704,824,596) Limited (FFBL) (Shareholding and and rent expense charged
(560,058,702) 169,082,593 common directorship) by related party 11,274 1,004,252
Expense of IT facilities charged
36 REMUNERATION OF CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVES by related party 10,468,680 6,000,000
Expense Charged to related
The aggregate amount charged in the financial statements for the year for remuneration, including certain
party by Company 8,200 660,998
benefits, to Chief Executive, directors and executives of the Company is as follows:
Consultancy fee charged
Chief Executive Non Executive Directors Executives by related party 557,500
2022 2021 2022 2021 2022 2021 Finance cost charged by
Rupees related party 15,000,000 457,466,704
Conversion of loan as
Managerial remuneration 20,479,350 19,920,000 – – 129,208,710 100,507,184 subscription received
Meeting fee – – 15,760,000 13,105,000 – – against right issue – 5,925,000,000
Provident fund 2,047,940 1,528,000 – – 12,919,324 10,151,345
House rent 9,215,710 5,940,000 – – 108,449,115 83,976,464 Fauji Foundation Associated Undertaking Management shared services
Utilities 2,047,940 1,320,000 – – 12,920,871 10,050,728 (Shareholding and charged by related party 4,992,486 6,069,741
Relocation allowance – – – – 925,000 3,042,221 common directorship)
Others 6,400,000 2,200,000 – – 33,604,913 19,164,679 Share deposit money received 2,000,000,000 –
40,190,940 30,908,000 15,760,000 13,105,000 298,027,933 226,892,621 Consultancy fee charged by
Number of persons 2 1 10 14 50 40 related party 847,500 –
TA/DA and boarding expenses
36.1 The Company also provides some of its executives with company maintained cars and other benefits in charged by related party 1,019,520 1,446,725
accordance with the Company’s policy.
108 109
Name of Nature of The Audit Committee oversees how management monitors compliance with the Company’s risk
the Company Relationship transactions 2022 2021
management policies and procedures, and reviews the adequacy of the risk management framework
Rupees Rupees in relation to the risks faced by the Company. The Audit Committee is assisted in its oversight role by
Askari Bank Limited Associated Undertaking Finance cost charged by Internal Audit. Internal Audit undertakes both regular and ad hoc reviews of risk management controls and
(Common directorship) related party 103,107,131 58,777,408 procedures, the results of which are reported to the Audit Committee.
Profit on TDR 141,124,932 –
Interest income on saving The Company’s exposure to financial risk, the way these risks affects the financial position and performance
accounts 22,748,520 8,272,438 and the manner in which such risks are managed is as follows:
FFBL Power Company Associated Undertaking Purchase of coal 5,294,322 94,749,089 40.2 Market risk
Limited (Common directorship) 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 value of its holding of financial instruments. The objective
Fauji Cereals Associated Undertaking Salary of executive charged to of market risk management is to manage and control market risk exposures within acceptable parameters,
the related party – 4,938,165 while optimizing return.
(Common directorship) Travelling expense charged to
the related party – 442,458 40.3 Foreign exchange risk
Foreign exchange risk is the risk that value of a financial instrument will fluctuate due to changes in
Fauji Security Services
foreign exchange rates. Foreign exchange risk arises mainly where receivables and payables exist due to
(Private) Limited Associated Undertaking Expenses paid against
transactions with foreign buyers and suppliers.
(Common directorship) security services – 232,000

The Company is exposed to exchange risk arising from currency exposures mainly with respect to the
Employee’s Provident
Euro and US Dollar on import of raw material, packing material and stores and spares. Currently, the
Fund Trust Post employee benefit plan Contribution for the year 60,535,059 52,328,260
Company’s foreign exchange risk exposure is restricted to the amounts payable to the foreign entities.
The Company’s is not exposed to foreign exchange risk as at 31 December 2022 as it has no financial
Employee’s Gratuity
instruments denominated in foreign currency.
Fund Post employee benefit plan Payment to gratuity fund 50,000,000 –
40.4 Price risk

Directors Meeting fee 15,760,000 13,105,000
Price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate as a result
Key Management of changes in market prices (other than those arising from interest rate risk or currency risk), whether those
Personnel Remuneration and benefits 138,202,273 100,053,584 changes are caused by factors specific to the individual financial instruments or its issuer or factors affecting
all similar financial instruments traded in the market. The Company is not exposed to any significant price
39.1 Associated companies / related parties percentage of shareholding has been disclosed in note 4.4. risk.
40 FINANCIAL RISK MANAGEMENT 40.5 Interest rate risk

40.1 Financial risk factors Interest rate risk represents the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of change in market interest rates. Sensitivity to interest rate risk arises from mismatch of
The Company’s activities expose it to a variety of financial risks: market risk (including interest rate risk, price
financial assets and liabilities that mature or reprice in a given period.
risk and currency risk), credit risk and liquidity risk. The Company’s overall risk management focuses on
the unpredictability of financial markets and seeks to minimize potential adverse effects on the Company’s
At the reporting date, the interest rate profile of the Company’s interest bearing financial instruments is as
financial performance.
follows:
The Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk
2022 2021 2022 2021
management framework. The Board is also responsible for developing and monitoring the Company’s risk
management policies. Effective rate Rupees Rupees
Financial assets
The Company’s risk management policies are established to identify and analyze the risks faced by the Fixed rate instruments
Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk
management policies and systems are reviewed regularly to reflect changes in market conditions and the Saving accounts 10.75% to 14.5% 6% to 7.8% 166,594,592 522,258,306
Company’s activities. The Company, through its training and management standards and procedures, Term Deposit Receipts 15.80% – 970,000,000 –
aims to develop a disciplined and constructive control environment in which all employees understand their 1,136,594,592 522,258,306
roles and obligations.
110 111
2022 2021 2022 2021 Counter parties with external credit ratings
Effective rate Rupees Rupees
These include banking companies and financial institutions, which are counterparties to bank balances,
Financial liabilities TDRs and interest accrued. Credit risk is considered minimal as these counterparties have reasonably high
Variable rate instruments credit ratings as determined by various credit rating agencies. Due to long standing business relationships
with these counterparties and considering their strong financial standing, management does not expect
Lease liabilities 8.20% to 13.51% 8.20% to 13.51% 127,015,862 190,991,389 non-performance by these counterparties on their obligations to the Company. Following are the credit
Long term loans 9.85% to 17.26% 8.79% to 9.85% 5,482,593,723 6,038,607,101 ratings of counterparties with external credit ratings:
Short term borrowings 9.35% to 16.76% 8.29% to 9.35% 1,705,540,931 1,933,798,755
Total exposure 7,315,150,516 8,163,397,245 Rating Rating 2022 2021
Institutions Short term Long term Agency Rupees Rupees
Fair value sensitivity analysis for fixed rate instruments
Bank balances and TDRs
The Company does not account for any fixed rate financial assets and liabilities at fair value through profit or National Bank Of Pakistan AAA A1+ PACRA 233,432 4,845,721
loss. Therefore, a change in interest rate at the reporting date would not affect profit or loss of the Company. United Bank Limited AAA A1+ JCR-VIS 294,719 294,722
Askari Bank Limited AA+ A1+ PACRA 873,515,891 1,453,999,677
Cash flow sensitivity analysis for variable rate instruments JS Bank AA- A1+ PACRA 133,116 218,679
At 31 December 2022, if interest rate on variable rate financial instruments has been 1% higher / lower with Bank Alfalah Limited AA+ A1+ PACRA – 5,738
all other variables held constant, loss before tax for the year would have been Rs. 93.15 million (2021: Rs. MCB Bank Limited AAA A1+ PACRA 29,927,268 109,379,836
76.41 million) higher / lower, mainly as a result of higher / lower interest expense on variable rate financial Habib Bank Limited AAA A1+ JCR-VIS 540,000 421,094
liabilities. Faysal Bank Limited AA A1+ PACRA 240,263,493 156,218,756
Bank Islami Pakistan A+ A1 PACRA 284,999 284,999
40.6 Credit risk Bank Al-Habib Limited AAA A1+ PACRA 7,747 7,827
Soneri Bank Limited AA- A1+ PACRA 139,343 148,056,183
Credit risk represents the risk of a financial loss if a customer or counter party to a financial instrument fails
Dubai Islamic Bank AA A1+ JCR-VIS 53,949 74,942
to discharge its contractual obligation. The Company’s credit risk arises from trade debts, other receivables,
1,145,393,957 1,873,808,174
and balances with banks. The Company has no significant concentration of credit risk as its exposure is
Interest accrued
spread over a large number of counter parties.
Askari Bank Limited AA+ A1+ PACRA 40,973,562 –
40.7 Exposure to credit risk

Counter parties without external credit ratings
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure
- Trade debts
to credit risk at the reporting date is as follows:
These mainly include customers which are counter parties to trade debts. As explained in note 2.11,
Note 2022 2021 the Company applies the IFRS 9 simplified approach to measure expected credit losses which uses a
Rupees Rupees lifetime expected loss allowance for all trade debts. Trade debts are written off when there is no reasonable
expectation of recovery. Management uses an allowance matrix to measure “Expected Credit losses” (ECL)
Financial assets at amortized cost of trade debtors. The aging of trade debts at the reporting date is as follows:
Security deposits 153,638,477 66,307,977
Trade debts 21 557,499,467 566,068,117 2022 2021
Due from employees 22 9,029,958 21,588,342 Rupees Rupees
Other receivables 23 43,285,853 12,314,953
Interest accrued 24 40,973,562 – 0 - 90 days 412,295,555 151,784,031
Bank balances 25 175,393,957 1,873,808,174 91 - 180 days 10,326,886 305,595,961
Term Deposit Receipts (TDRs) 25 970,000,000 – 181 - 365 days 32,871,289 29,358,913
1,949,821,274 2,540,087,563 Above 365 days 213,905,917 101,785,126
669,399,647 588,524,031
40.8 Credit quality and impairment Allowance for expected credit loss (111,900,180) (22,455,914)
557,499,467 566,068,117
Credit quality of financial assets is assessed by reference to external credit ratings, where available, or to
historical information about counterparty default rates. All counterparties, with the exception of customers
- Security deposits, other receivables and due from employees
and utility Companies, have external credit ratings determined by various credit rating agencies. Credit
quality of customers is assessed by reference to historical defaults rates and present ages. The Company has assessed, based on historical experience and available securities, that the expected
credit loss associated with these financial assets is trivial and therefore no impairment charge has been
accounted for
112 113
40.9 Concentration of credit risk 41 FAIR VALUE MEASUREMENTS

Concentration of credit risk exists when the changes in economic or industry factors similarly affect groups Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
of counterparties whose aggregate credit exposure is significant in relation to the Company’s total credit transaction between market participants at the measurement date.
exposure. The Company’s portfolio of financial instruments is broadly diversified and all other transactions
are entered into with credit-worthy counterparties there-by mitigating any significant concentrations of The carrying values of all financial assets and liabilities reflected in the financial statements approximate fair
credit risk. values. The fair values of financial assets and liabilities, together with the carrying amounts shown in the
statement of financial position are as follows:
40.10 Liquidity risk
2022 2021
Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with
Carrying Fair Carrying Fair
financial liabilities, that are settled by delivering cash or other financial asset as they fall due. The Company’s Note amount value amount value
approach is to ensure, as far as possible, to always have sufficient liquidity to meet its liabilities when Rupees
due, under both normal and stressed conditions. Prudent liquidity risk management implies maintaining
sufficient cash and marketable securities and ensuring the availability of adequate credit facilities. The Assets carried at amortized cost
Company finances its operations through equity, borrowings and working capital with a view to maintain Security deposits 153,638,477 153,638,477 66,307,977 66,307,977
an appropriate mix between various sources of finance to minimize risk. As explained in note 1.2, the Trade debts - net of allowance 21 557,499,467 557,499,467 566,068,117 566,068,117
Company has continuously been supported by sponsors and providers for finance for efficient working Due from employees 22 9,029,958 9,029,958 21,588,342 21,588,342
capital management and for meeting its contractual obligations. The Company’s finance department aims Other receivables 23 43,285,853 13,829,210 12,314,953 12,314,953
at maintaining flexibility in funding by keeping regular committed credit lines available. Interest accrued 24 40,973,562 40,973,562 – –
Cash and bank balances 25 1,145,482,229 1,191,863,389 1,873,907,189 1,873,907,189
The table below analyses the Company’s financial liabilities into relevant maturity groupings based on the Term Deposit Receipts 25 970,000,000 – – –
remaining period at the reporting to the contractual maturity date. The amounts disclosed in the table are 2,919,909,546 2,936,844,072 2,540,186,578 2,540,186,578
the contractual undiscounted cash flows.
2022 2021
Carrying Contractual Less than Between Carrying Fair Carrying Fair

amount cash flows 1 year 1 to 5 years Note amount value amount value
Rupees Rupees
At 31 December 2022 Liabilities carried at amortized cost

Lease liabilities 127,015,862 142,125,935 85,953,292 56,172,643 Long term loans 7 5,988,149,277 5,988,149,277 6,038,607,101 12,026,756,378
Long term loans 5,988,149,277 5,988,149,277 505,555,554 5,482,593,723 Lease liabilities 9 127,015,862 127,015,862 190,991,389 318,007,251
Trade and other payables 1,548,301,907 1,548,301,907 1,548,301,907 – Short term borrowing 12 1,705,540,931 1,705,540,931 1,933,798,755 3,639,339,686
Accrued finance cost 402,289,522 402,289,522 402,289,522 – Loan from Parent Company 13 2,000,000,000 2,000,000,000 – 2,000,000,000
Short term borrowings 1,705,540,931 1,705,540,931 1,705,540,931 – Trade and other payables 13 1,548,301,907 1,548,301,907 853,631,207 2,401,933,114
9,771,297,499 9,786,407,572 4,247,641,206 5,538,766,366 Accrued finance cost 14 402,289,522 402,289,522 1,267,924,682 1,670,214,204
11,771,297,499 11,771,297,499 10,284,953,134 22,056,250,633
Carrying Contractual Less than Between
amount cash flows 1 year 1 to 5 years The basis for determining fair values is as follows:
Rupees
At 31 December 2021 Interest rate used for determining fair values of financial instruments
Lease liabilities 190,991,389 229,493,836 84,721,252 144,772,584 For financial instruments carried at amortized cost, since the majority of the interest bearing investments
Long term loans 6,038,607,101 6,038,607,101 50,457,824 5,988,149,277 are variable rate based instruments, there is no difference in carrying amount and the fair value. Further, for
Trade and other payables 853,631,207 853,631,207 853,631,207 – fixed rate instruments, since there is no significant difference in the market rate and rate of the instruments
Accrued finance cost 1,267,924,682 1,267,924,682 1,267,924,682 – and most of the fixed rate instruments are short term in nature, therefore fair value significantly approximates
Short term borrowings 1,933,798,755 1,933,798,755 1,933,798,755 – to carrying value
10,284,953,134 10,323,455,581 4,190,533,720 6,132,921,861
It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at
significantly different amounts.
The contractual cash flows relating to the above financial liabilities have been determined on the basis of
interest / mark-up rates effective at the respective year-ends. The rates of interest / mark-up have been
disclosed in the respective notes to these financial statements.
114 115
116
42

based on:
Gearing ratio
Lease liabilities
Long term loans
Accrued mark-up
Fair value hierarchy
Short term borrowings

Property. plant and equipment
Trade and other payables
Cash and cash equivalents

CAPITAL RISK MANAGEMENT
-
Rupees
Level 1

Level 2
Equity and net debt

Equity
Net debt
Total debt
9
8
7,662,867,837
25
12
14
13
Note

Level 1: Quoted prices in active markets for identical assets or liabilities
-
Level 3
77%
12,879,984,163
4,047,448,812
8,832,535,351
9,978,017,580
1,705,540,931
402,289,522
127,015,862
1,755,021,988
5,988,149,277
Rupees
2022
(1,145,482,229)
maintain a strong capital base to support the sustained development of its business.
Level 3: Inputs for the asset or liability that are not based on observable market data.
of statement of financial position, the Company was financed through debt and equity.
Total
7,662,867,837
the asset or liability, either directly (as prices) or indirectly (derived from prices); and
Level 2: Those involving Inputs other than quoted prices included in Level 1 that are observable for
86%
12,078,257,612
3,525,519,238
8,552,738,374
10,426,645,563
1,933,798,755
1,267,924,682
190,991,389
995,323,636
6,038,607,101
Rupees
2021
Total
2022 2021
8,079,699,652
to the financial statements may cause changes in the Company’s approach to capital management.
(1,873,907,189)
The Company manages its capital structure by monitoring return on net assets and makes adjustments
The Company’s prime objective when managing capital is to safeguard its ability to continue as a going
accumulated losses of Rs. 18,469.23 million. These indicators and other matters as explained in note 1.2
There was no change to the Company’s approach to capital management during the year. The Company
concern so that it can continue to provide returns for shareholders, benefits for other stakeholders and to
The following table shows assets recognized at fair value, analyzed between those whose fair value is
Company may adjust the amount of dividend paid to shareholders and / or issue new shares. As of the date
to it in the light of changes in economic conditions. In order to maintain or adjust the capital structure, the
is not subject to externally imposed capital requirements. As at the reporting date, the Company has
43 RECONCILIATION OF MOVEMENTS OF LIABILITIES TO CASH FLOWS ARISING FROM FINANCING ACTIVITIES.
2022
Liabilities Equity
Short term Share capital / Total

Long term loans Accrued finance cost Lease liabilities Unclaimed dividend Share deposit money
borrowings share premium
Rupees
Balance as at 01 January 2022 6,038,607,101 1,933,798,755 1,267,924,682 190,991,389 965,752 – 17,695,379,687 27,127,667,366
Cash flows
Short term borrowings - net – (228,974,159) – – – – – (228,974,159)
Receipt of share deposit money – – – – – 2,000,000,000 – 2,000,000,000
Repayment of long term loans (50,457,824) – – – – – – (50,457,824)
Repayment of lease rentals – – – (63,975,527) – – – (63,975,527)
Finance cost paid – – (1,416,651,879) – – – – (1,416,651,879)
Share issuance cost adjusted
against share premium – – – – – – (19,349,944) (19,349,944)
Total changes from financing
cash flows (50,457,824) (228,974,159) (1,416,651,879) (63,975,527) – 2,000,000,000 (19,349,944) 220,590,667
Other changes including non-cash
Changes in running finance – 716,335 – – – – – 716,335
Finance cost – – 1,259,766,520 – – – – 1,259,766,520
Conversion of accrued finance cost to
share deposit money – – (708,749,801) – – 708,749,801 – –
Assets acquired on lease – – – – – – – –
Total liability related other changes – 716,335 551,016,719 – – 708,749,801 – 1,260,482,855
Closing as at 31 December 2022 5,988,149,277 1,705,540,931 402,289,522 127,015,862 965,752 2,708,749,801 17,676,029,743 28,608,740,888
2021
Liabilities Equity
Short term Share capital / Total

Long term loans Accrued finance cost Lease liabilities Unclaimed dividend Share deposit money
borrowings share premium
Rupees
Balance as at 01 January 2021 6,167,582,315 1,875,297,551 5,925,000,000 533,632,385 254,729,697 965,752 9,955,252,787 24,712,460,487
Cash flows
Short term borrowings repaid
net of receipts – (156,281) – – – – – (156,281)
Repayment of long term loans (128,975,214) – – – – – – (128,975,214)
Repayment of lease rentals – – – – (63,738,308) – – (63,738,308)
Share issuance cost adjusted
against share premium – – – – – – 1,882,945,960 1,882,945,960
Finance cost paid – – – (420,758,227) – – – (420,758,227)
Dividends paid – – – – – – (67,819,060) (67,819,060)
Total changes from financing
cash flows (128,975,214) (156,281) – (420,758,227) (63,738,308) – 1,815,126,900 1,201,498,870
Other changes including non-cash
Changes in running finance – 58,657,485 – – – – – 58,657,485
Finance cost – – – 1,155,050,524 – – – 1,155,050,524
Sponsor support converted to equity – – (5,925,000,000) – – – 5,925,000,000 –
Assets acquired on lease – – – – – – – –
Total liability related other changes – 58,657,485 (5,925,000,000) 1,155,050,524 – – 5,925,000,000 1,213,708,009
Closing as at 31 December 2021 6,038,607,101 1,933,798,755 – 1,267,924,682 190,991,389 965,752 17,695,379,687 27,127,667,366
117
FORM 34
THE COMPANIES ACT, 2017
For the year ended December 31, 2022 (Section 227(2)(f))
PATTERN OF SHAREHOLDING
44 DATE OF AUTHORIZATION OF ISSUE 1.1 Name of the Company FAUJI FOODS LIMITED
These financial statements have been authorized for issue by the Board of Directors of the Company on
January 26, 2023. 2.1. Pattern of holding of the shares held by the shareholders as at 31-12-2022
45 EVENTS AFTER THE REPORTING DATE 2.2 Number Of Shareholding Total Shares

Shareholders From To Held
There are no subsequent events occurring after reporting date.
992 1 100 49,427
46 CORRESPONDING FIGURES 1489 101 500 651,234
Corresponding figures have been re-arranged and re-classified, wherever necessary, for the purpose of 1716 501 1,000 1,644,919
comparison and better presentation as per reporting framework. However, no significant reclassification
3961 1,001 5,000 11,763,862
has been made.
1714 5,001 10,000 13,925,554
692 10,001 15,000 9,011,118
530 15,001 20,000 9,860,751
349 20,001 25,000 8,230,094
245 25,001 30,000 7,010,150
159 30,001 35,000 5,258,265
162 35,001 40,000 6,266,718
95 40,001 45,000 4,093,373
147 45,001 50,000 7,267,510
56 50,001 55,000 2,975,737
87 55,001 60,000 5,093,489
34 60,001 65,000 2,140,025
51 65,001 70,000 3,513,009
48 70,001 75,000 3,520,247
43 75,001 80,000 3,391,061
18 80,001 85,000 1,503,550
24 85,001 90,000 2,122,454
21 90,001 95,000 1,963,977
125 95,001 100,000 12,457,869
20 100,001 105,000 2,056,540
19 105,001 110,000 2,058,760
8 110,001 115,000 903,500
11 115,001 120,000 1,305,031
25 120,001 125,000 3,096,643
16 125,001 130,000 2,059,942
5 130,001 135,000 664,641
4 135,001 140,000 553,840
5 140,001 145,000 716,700
26 145,001 150,000 3,889,718
8 150,001 155,000 1,220,028
6 155,001 160,000 948,616
5 160,001 165,000 813,313
Chairman Chief Executive Officer Director Chief Financial Officer
118 119
FORM 34
(Section 227(2)(f))
2.2 Number Of Shareholding Total Shares 2.2 Number Of Shareholding Total Shares

Shareholders From To Held Shareholders From To Held
8 165,001 170,000 1,340,710 2 370,001 375,000 745,678

7 170,001 175,000 1,211,351 4 375,001 380,000 1,515,560
5 175,001 180,000 894,390 2 390,001 395,000 789,003
2 180,001 185,000 366,000 6 395,001 400,000 2,393,745
3 185,001 190,000 568,599 2 400,001 405,000 808,272
3 190,001 195,000 582,248 1 410,001 415,000 412,090
29 195,001 200,000 5,780,984 1 420,001 425,000 425,000
12 200,001 205,000 2,434,776 1 430,001 435,000 432,500
4 205,001 210,000 831,000 2 440,001 445,000 885,000
4 210,001 215,000 850,264 3 445,001 450,000 1,350,000
2 215,001 220,000 438,001 3 450,001 455,000 1,358,000
6 220,001 225,000 1,339,500 1 465,001 470,000 467,242
4 225,001 230,000 912,324 1 480,001 485,000 481,135
4 230,001 235,000 933,716 12 495,001 500,000 5,998,357
3 235,001 240,000 715,000 1 500,001 505,000 503,000
2 240,001 245,000 486,500 1 515,001 520,000 516,741
7 245,001 250,000 1,750,000 4 525,001 530,000 2,113,400
4 250,001 255,000 1,008,436 1 530,001 535,000 533,500
4 255,001 260,000 1,032,158 2 535,001 540,000 1,077,500
7 260,001 265,000 1,844,989 2 545,001 550,000 1,092,968
2 265,001 270,000 540,000 2 555,001 560,000 1,114,965
1 270,001 275,000 275,000 1 565,001 570,000 566,850
4 275,001 280,000 1,111,092 2 595,001 600,000 1,196,500
2 280,001 285,000 566,317 1 610,001 615,000 610,666
4 285,001 290,000 1,151,500 1 620,001 625,000 623,000
2 290,001 295,000 583,500 2 630,001 635,000 1,268,000
8 295,001 300,000 2,400,000 1 640,001 645,000 645,000
2 300,001 305,000 602,027 2 660,001 665,000 1,329,900
2 305,001 310,000 615,658 2 675,001 680,000 1,356,043
5 310,001 315,000 1,564,500 1 680,001 685,000 681,600
2 315,001 320,000 634,877 4 695,001 700,000 2,800,000
1 320,001 325,000 325,000 1 700,001 705,000 701,000
2 325,001 330,000 656,000 1 715,001 720,000 719,000
3 335,001 340,000 1,017,500 1 740,001 745,000 741,568
1 340,001 345,000 344,500 1 745,001 750,000 750,000
3 345,001 350,000 1,050,000 2 785,001 790,000 1,577,592
2 350,001 355,000 703,500 2 795,001 800,000 1,600,000
2 360,001 365,000 724,500 1 835,001 840,000 837,000
1 365,001 370,000 367,000 1 885,001 890,000 887,683
120 121
FORM 34
(Section 227(2)(f))
2.2 Number Of Shareholding Total Shares 2.2 Number Of Shareholding Total Shares

Shareholders From To Held Shareholders From To Held
3 895,001 900,000 2,700,000 1 8,695,001 8,700,000 8,697,557

1 920,001 925,000 920,798 1 8,880,001 8,885,000 8,883,660
1 925,001 930,000 926,742 1 9,995,001 10,000,000 10,000,000
1 965,001 970,000 965,817 1 26,400,001 26,405,000 26,401,583
2 985,001 990,000 1,975,293 1 67,370,001 67,375,000 67,371,916
5 995,001 1,000,000 5,000,000 1 1,134,700,001 1,134,705,000 1,134,701,257
1 1,045,001 1,050,000 1,050,000 13223 1,584,088,159
1 1,125,001 1,130,000 1,130,000 2.3 Categories of shareholders
Share held Percentage
1 1,135,001 1,140,000 1,140,000
4 1,195,001 1,200,000 4,799,477 2.3.1 Directors, Chief Executive Officers, 148,923 0.0094%
and their spouse and minor children
1 1,295,001 1,300,000 1,300,000
1 1,310,001 1,315,000 1,314,500 2.3.2 Associated Companies, 1,202,073,173 75.8842%
1 1,325,001 1,330,000 1,328,122 undertakings and related
1 1,450,001 1,455,000 1,455,000 parties. (Parent Company)
1 1,465,001 1,470,000 1,470,000

2.3.3 NIT and ICP 8,300 0.0005%
2 1,495,001 1,500,000 3,000,000
1 1,540,001 1,545,000 1,544,000 2.3.4 Banks Development 1,845,784 0.1165%
Financial Institutions, Non
1 1,655,001 1,660,000 1,660,000
Banking Financial Institutions.
2 1,695,001 1,700,000 3,400,000
1 1,745,001 1,750,000 1,749,500 2.3.5 Insurance Companies 26,401,655 1.6667%
1 1,750,001 1,755,000 1,751,483
2.3.6 Modarabas and Mutual 467,876 0.0295%
1 1,780,001 1,785,000 1,784,500
Funds
1 1,845,001 1,850,000 1,845,784
1 1,855,001 1,860,000 1,857,698 2.3.7 Shareholders holding 10% 1,134,701,257 71.6312%
or more
1 1,920,001 1,925,000 1,925,000
1 2,005,001 2,010,000 2,008,460 2.3.8 General Public
1 2,095,001 2,100,000 2,098,621 a. Local 313,291,290 19.7774%
1 2,405,001 2,410,000 2,407,857 b. Foreign 283,900 0.0179%
1 2,515,001 2,520,000 2,515,500

2.3.9 Others (to be specified)
1 2,920,001 2,925,000 2,920,743 1- Investment Companies 448,000 0.0283%
1 3,000,001 3,005,000 3,001,497 2- Joint Stock Companies 37,710,219 2.3806%
1 3,055,001 3,060,000 3,056,000 3- Other Companies 1,409,039 0.0889%
1 3,125,001 3,130,000 3,129,500

1 3,210,001 3,215,000 3,210,852
1 3,440,001 3,445,000 3,445,000
3. Signature of Company Secretary
1 4,595,001 4,600,000 4,600,000
4. Name of Signatory Brig Hamid Mahmood Dar (Retd)
1 5,230,001 5,235,000 5,231,000
1 6,685,001 6,690,000 6,687,302 5. Designation Company Secretary
1 7,265,001 7,270,000 7,266,000 6. CNIC Number 35201-7127628-1

7. Date December 31, 2022
122 123
124 125
Revenue
(mn)
8,586
12,351
2022 2021
Gross Profit
(mn)
923
971
2022 2021
Loss after Taxation

(mn)
(1,253)
(2,168)
2022 2021
126 127
Quarterly EBITDA 2022
(PKR mn)
383
77
(71)
(156) (143)
(181)
(237)
(308)
Q1-2022 Q2-2022 Q3-2022 Q4-2022
128 129
FAUJI FOODS LIMITED
FORM OF PROXY
56th Annual General Meeting
Registered Folio No.

CDC Account No.
I/We ____________________________________________________________________________________________________
(Name)
of ______________________________________________________________________________________________________
(Address)
being a member of F A U J I F O O D S L I M I T E D, hereby appoint
_________________________________________________________________________________________________________
(Name)
of ______________________________________________________________________________________________________
(Address)
or failing him _____________________________________________________________________________________________
(Name)
of ______________________________________________________________________________________________________
(Address)
(also being a member of the Company) as my/ our proxy to attend, act and vote for me/ us and on my/ our behalf, at the
56th Annual General Meeting of the Company to be held on Tuesday, March 21, 2023 at 11:00 a.m. at FFL Head Office, 42
CCA, Ex Park View, DHA Phase-VIII, Lahore and also virtually through video-link and at any adjournment thereof.
As witness my hand this __________________ day of ______________ 2023.
Revenue
Stamp Rs. 50/-
Signature of the Shareholder / Appointer
Witness 1 Witness 2
Signature Signature
Name Name
Address Address
CNIC # CNIC #
NOTE:
Proxies in order to be effective must reach the Company’s Registered Office not less than 48 hours before the time for
holding the meeting and must be duly stamped, signed and witnessed. Proxies of the Members through CDC shall be
accompanied with attested copies of their CNIC.
SECP’s Circular No. 1 dated 26th January, 2000 is on the reverse side of the form.
130 131
� ‫ل�ی ٹ‬
SECURITIES AND EXCHANGE
COMMISSION OF PAKISTAN
‫وفیجوفڈز یم��ڈ‬
Blue Area, Islamabad
January 26, 2000
Circular No. 1 of 2000
Sub: Guidelines For Attenting General Meetings and Appointment Of Proxies
The shares of a number of listed Companies are now being maintained as “book entry Security” on the Central Depository
System (CDS) of the Central Depository Company of Pakistan Limited (CDC). It has come to the notice of the Commission
that there is some confusion about the authenticity of relevant documents in the matter of beneficial owners of the shares
registered in the name of CDC for purposes of attending the general meetings and for verification of instruments of
proxies. The issue has been examined and pending the further instruction to be issued in this regard, the following
guideline for the convenience of the listed Companies and the beneficial owners are laid down:
A. Attending of meeting in person by account holders and / or sub-account holders and persons whose
securities are in group account and their registration details are uploads to CDS:
1) The Company shall obtain list of beneficial owners from the CDC as per Regulation # 12.3.5 of the CDC
Regulations.
2) In case of individuals, the account holder or sub-account holder and / or the person whose securities are in
group account and their registration details are up-loaded as per the Regulations, shall authenticate his identity
by showing his original Computerized National Identity Card (CNIC) or original passport at the time of attending
the meeting.
3) In case of corporate entity, the Board of Directors’ resolution / power of attorney with specimen signature of the
nominee shall be produced at the time of the meeting.
B. Appointment of Proxies:
1) In case of individual, the account holder or sub-account holder and / or the person whose securities are in group
account and their registration details are uploaded as per the Regulation, shall submit the proxy form as per
requirement notified by the Company.
2) The proxy form shall be witnessed by the two persons whose names, addresses and CNIC numbers shall be
mentioned on the form.
3) Attested copies of CNIC or the passport of the beneficial owners and the proxy shall be furnished with the proxy
form.
4) The proxy shall produce his original CNIC or original passport at the time of the meeting.
5) In case of corporate entity, the Board of Directors’ resolution / power of attorney with specimen signature shall
be submitted along with proxy form to the Company.
132 133
SECURITIES AND EXCHANGE
COMMISSION OF PAKISTAN
Blue Area, Islamabad
January 26, 2000
Circular No. 1 of 2000
Sub: Guidelines For Attenting General Meetings and Appointment Of Proxies
The shares of a number of listed Companies are now being maintained as “book entry Security” on the Central Depository
System (CDS) of the Central Depository Company of Pakistan Limited (CDC). It has come to the notice of the Commission
that there is some confusion about the authenticity of relevant documents in the matter of beneficial owners of the shares
registered in the name of CDC for purposes of attending the general meetings and for verification of instruments of
proxies. The issue has been examined and pending the further instruction to be issued in this regard, the following
guideline for the convenience of the listed Companies and the beneficial owners are laid down:
A. Attending of meeting in person by account holders and / or sub-account holders and persons whose
securities are in group account and their registration details are uploads to CDS:
1) The Company shall obtain list of beneficial owners from the CDC as per Regulation # 12.3.5 of the CDC
Regulations.
2) In case of individuals, the account holder or sub-account holder and / or the person whose securities are in
group account and their registration details are up-loaded as per the Regulations, shall authenticate his identity
by showing his original Computerized National Identity Card (CNIC) or original passport at the time of attending
the meeting.
3) In case of corporate entity, the Board of Directors’ resolution / power of attorney with specimen signature of the
nominee shall be produced at the time of the meeting.
B. Appointment of Proxies:
1) In case of individual, the account holder or sub-account holder and / or the person whose securities are in group
account and their registration details are uploaded as per the Regulation, shall submit the proxy form as per
requirement notified by the Company.
2) The proxy form shall be witnessed by the two persons whose names, addresses and CNIC numbers shall be
mentioned on the form.
3) Attested copies of CNIC or the passport of the beneficial owners and the proxy shall be furnished with the proxy
form.
4) The proxy shall produce his original CNIC or original passport at the time of the meeting.
5) In case of corporate entity, the Board of Directors’ resolution / power of attorney with specimen signature shall
be submitted along with proxy form to the Company.
134

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TOWARDS A

Our cover this year reflects this enduring transition.

Just as a seed grows to become a mighty tree,

130 131 133

Portfolio Sustainable Route to

57% to 68% 44% 30,000+

Energy Mix Packaging

1 MW 170 Million+ 1500 ml

100% Integrated Business

Mr. Basharat Ahmad Bhatti

*Appointed/Elected as Director/Chairman w.e.f. January 26, 2023

• Director – State Bank of Pakistan (Central Bank of Pakistan)

Leading the Example of Arts.

We recognize that our greatest strength lies in our

Q1-2022 Q2-2022 Q3-2022 Q4-2022

Sitting From Left To Right Standing From Left To Right

Lt Col M. Babar Rashid (Retd) Head Admin

Muhammad Ifzal Akhtar Factory Manager

Closure of Share Transfer (a) For attending the meeting:

Economic Overview of currency and increasing energy costs, Tetra Pakistan

witnessed significant production losses. The textile sector, 2022 2021

Business Review o Company has invested heavily in the automation

Future outlook Principle Risks and

Annual General Meeting:

Audit Committee 18. The statutory auditors of the Company have

Mr. Usman Zaheer Ahmad terms and conditions of employment.

Capital Market / Capital Structure Analysis

Gross Profit/(Loss) Ratio

Operating Profit Ratio

-679 -7000 -120.0%

Year Ended Year Ended Year Ended Year Ended

Operating Profit Ratio

Year Ended Year Ended Year Ended Equity Debt

Distribution Expense Ratio

Spread NURPUR’s Slightly Salted Butter

Nurpur Flavoured Milk is a sweetened dairy product

OUR CERTIFICATIONS & LICENSES

YUM! Certification PFA Approval

Following are the key audit matters:

Note 2022 2021 Note 2022 2021

EQUITY AND LIABILITIES ASSETS

Share capital and reserves Non-current assets

Chairman Chief Executive Officer Director Chief Financial Officer

Note 2022 2021 2022 2021

Revenue Note 2022 2021

2.8 Impairment of non financial assets 2.13 Staff retirement gratuity

2.10 Taxation Current

3.3.2 Accumulated compensated absences 3.6 Contingent liabilities

3.13 Financial instruments Equity Instrument - FVOCI

3.16 Revenue recognition Effective date

In addition to the above amendments to standards, improvements to various accounting standards

4 ISSUED, SUBSCRIBED AND PAID UP SHARE CAPITAL 5 SHARE PREMIUM

Note 2022 2021 10.18 Sensitivity analysis

2022 2021 12.1 Short term running finance

10.17 Maturity profile (Undiscounted payments) 12.2 Islamic mode of financing

Note 2022 2021 15 CONTINGENCIES AND COMMITMENTS

Operating fixed assets

order. Department have filed an appeal before ATIR.

accrue. Accordingly, no provision has been made in these financial statements.

16.1 Operating fixed assets

As witness my hand this ____ day of 2023.