JD W Annual Report 30 Sep 2022

OUR VISION IS
to Create Opportunities for the Future.

Before bringing life to a vision we have to see it first and for that we need people
who specialize in seeing the impossible. Here at JDW, we are proud of the visionary
people we have who take up the responsibility of creating opportunities for the future,
not only for our Company but for the whole community we operate in.
We believe life is about the betterment of the human condition; it’s about social
awareness, and random acts of kindness that weave the soul of humanity. Together,
we all participate in weaving the social fabric; we should all therefore be patching
the fabric when it develops holes. The change has begun, here at JDW, as we have
started to unpack the challenges that encounter us, realizing that we each have
a role that requires us to change and become more responsible for shaping our
community and creating magic under JDW’s vision. A vision in which everyone is
benefited, be it our shareholders, the farmers or you.
CONTENTS
01
Company
Review
06 Corporate Information
08 Mission, Strategy & Values
10 High Pressure Co-Generation Power Plants
12 Corporate Farming
16 Corporate Social Responsibility
02 03
Financial
Performance
24 Operating Highlights
25 Production Data
Directors’
Review
28 Chairman’s Review
30 Directors’ Report
02 2022 Annual Report

04
Unconsolidated
Financial Statements
48 Independent Auditors’ Review Report

49 Statement of Compliance
51 Independent Auditors’ Report
58 Unconsolidated Statement of Financial Position
60 Unconsolidated Statement of Profit or Loss
61 Unconsolidated Statement of Comprehensive Income
62 Unconsolidated Statement of Cash Flows
63 Unconsolidated Statement of Changes in Equity
64 Notes to the Unconsolidated Financial Statements
05 06
Consolidated
Financial Statements

Shareholders’
Information
248 Notice of Annual General Meeting
252 Pattern of Shareholding
154 Consolidated Statement of Financial Position 254 Categories of Shareholding
156 Consolidated Statement of Profit or Loss 255 Form of Proxy
157 Consolidated Statement of Comprehensive Income
158 Consolidated Statement of Cash Flows
159 Consolidated Statement of Changes in Equity
160 Notes to the Consolidated Financial Statements
JDW SUGAR MILLS LIMITED 03

01
COMPANY REVIEW
06 Corporate Information
08 Mission, Strategy & Values
10 High Pressure Co-Generation Power Plants
12 Corporate Farming
16 Corporate Social Responsibility
CORPORATE
INFORMATION
Board of Directors Audit Committee Risk Management
Mr. Jahangir Khan Tareen Mr. Zafar Iqbal Committee
Director Chairman / Member Mr. Jahangir Khan Tareen
Makhdoom Syed Ahmad Mahmud Mrs. Samira Mahmud Chairman / Member
Director / Chairman Member Mr. Asim Nisar Bajwa

Mr. Raheal Masud Mr. Ijaz Ahmed Member
Chief Executive Member
Mrs. Samira Mahmud

Registrar
HR & R Committee Corplink (Pvt.) Limited
Syed Mustafa Mehmud
Mr. Asim Nisar Bajwa
Mr. Ijaz Ahmed
Chairman / Member Bankers
Mrs. Samira Mahmud Conventional
Mr. Zafar Iqbal Member
MCB Bank Limited
Mr. Ijaz Ahmed
Chief Operating Member The Bank of Punjab
Officer Habib Bank Limited
Rana Nasim Ahmed Nomination Committee Pak Kuwait Investment Company
Mr. Jahangir Khan Tareen Limited
Group Director Chairman / Member
Askari Bank Limited
(Finance) & CFO Mr. Asim Nisar Bajwa
Standard Chartered Bank (Pakistan)
Mr. Muhammad Rafique Member
Limited
Company Secretary &

Legal Head
Mr. Maqsood Ahmad Malhi

National Bank of Pakistan
Allied Bank Limited
Soneri Bank Limited
United Bank Limited
Auditors Registered Office
Islamic Riaz Ahmad, Saqib, Gohar & Co. 17-Abid Majeed Road, Lahore
Chartered Accountants Cantonment, Lahore, Pakistan
Dubai Islamic Bank Pakistan
Limited
MCB Islamic Bank Limited
Bank Alfalah Limited
BankIslami (Pakistan) Limited
Askari Bank Limited
Legal Advisor
National Bank of Pakistan
Cornelius, Lane & Mufti
Mills
Unit-I: Mauza Shirin, Jamal Din Wali,
District Rahim Yar Khan.
Unit-II: Machi Goth, Sadiqabad.
District Rahim Yar Khan.
Web Presence Unit-III: Mauza Laluwali, Near Village
www.jdw-group.com Islamabad, District Ghotki.

MISSION
• To be the market leader and a world-class organization by meeting
and proactively anticipating customer needs.
• To maximize the wealth of stakeholders by optimizing the long term
returns and growth of the business.
• To be amongst the most efficient and lowest cost producers in the
industry.
• To ensure a safe, harmonious and challenging working environment
for the employees.
STRATEGY
• To grow our base business in sugar and build those related activities
where there is opportunity to smooth the impact of sugar price
cycles.
• To produce sugar which is of highest international standards.
• To make investment in sugarcane crop to ensure regular supply of
cane and profitability of growers.
• To offer equal and fair growth opportunities to all employees.
• To undertake and support community development and welfare
projects in order to fulfil social commitments.

VALUES
Innovating & Protecting our Acting with

Improving People & Growers Integrity
Working Community
Together Empowerment

HIGH PRESSURE
CO-GENERATION
POWER PLANTS
2022, was another satisfactory year for the pioneering Co- exchange for the country compared to imported fuels such
Generation Power projects which effectively achieved its as furnace oil or imported coal.
generation capacity levels, maintaining it throughout the
year. The plants ran smoothly contributing its share to the The Company’s power plants are the first to materialize
National Grid. under NEPRA’s upfront bagasse tariff. As various other
sugar mills are now following suit, it is hoped that the
The first 26.6 MW power plant at JDW Unit-II, Sadiqabad, Company’s initiatives will serve as a catalyst for the
District Rahim Yar Khan, Punjab achieved Commercial realization of the sugar industry’s 2,500 MW power
Operations Date (COD) on June 12, 2014 after completing potential.
all independent testing and certification requirements,
while the second 26.8 MW plant at JDW Unit-III, District The Company in the larger national interest and
Ghotki, Sindh achieved COD on October 3, 2014. sustainability of the power sector, voluntarily agreed to alter
its existing contractual arrangements with the CPPA-G for
Both power plants are fully operational and supplying the sale of electricity. In this respect, the Company entered
affordable and renewable electricity under Energy Purchase into a “Master Agreement” and an “EPA Amendment
Agreements. The plants efficiently utilize indigenous Agreement” (hereinafter referred to as the ‘Agreements’)
bagasse as fuel, which besides being environment friendly, on February 12, 2021.
also has the major benefit of saving precious foreign
Gross Revenue from

Co-Generation 4,018
Rs. in million 2021-22
Energy Units
Delivered 326,245 MWh 2021-22

CORPORATE
FARMING
Human resource is undoubtedly the backbone of our
industry business. With sound farming knowledge,
Automation and
distinctive agronomic strategies and modern machinery, Mechanization
our people help us building highly efficient and eco-friendly
farms with higher yields. Our innovative farming techniques Large scale farming operations cannot be managed
have also led us to build the capacity of existing farmers effectively without mechanization. We have managed to
resulting in improved and reliable cane supply to JDW. acquire latest tractors and other farming equipment’s from
local as well as foreign sources. In addition to that, we have
JDW believes in investing in our future by undertaking large rationalized farm layouts and combined the traditional
scale research and development activities such as: farming techniques with newly acquired technologies
to achieve maximum yield in the region. Few of our
• Varietal screening and selection. mechanized operations are given below:
• Soil and water testing laboratory.
• Bio-laboratory facility. • Using semi-mechanized planting techniques.
• Hot water treatment facility. • Fertilizing (2 and 3 row coulter applicators),
• Disease free Seed Screening Program. • Magnum 340 HP tractors with GPS Scrappers for
• Transfer of technology. levelling.
• Application of GIS (Geographic Information System) • Magnum 340 HP tractors with GPS enable cultivation.
• Application of precision agriculture methodologies • Puma 140 HP tractors with hydraulic tilting blade to
make drains.
• CNH 140 HP tractors for Zonal Ripper.
• Gypsum spreaders.

•
•
Inter row herbicide sprayers.
High clearance tractor spraying.
Sustaining Field
• Granular pesticide applicator. Operations by Replacing
•
•
Harvesting.
Designing and manufacturing of stubble cultivator or Rotary HOE with Stumble
bed de-generator to replace rotary hoe. Cultivator
• Well-equipped workshop for high tech maintenance.
Designing and fabrication of bed de-generator at site
Precision Agriculture workshop is now ready to work in the fields. This will create
revolution in term of time and energy saving in offset and
Precision Agriculture (PA) is the act of managing different seed bed operations. Replacement of rotary hoe will stop
land variables using latest technology such as Global deterioration of soil structure which leads to improve soil
Positioning Systems (GPS), geographic Information by maintaining soil porosity, water holding capacity, soil
Systems (GIS), Remote Sensing (RS) and Yield Mapping. drainage and reduction of surface sealing.
Adoption of PA practices can improve the efficiency and
profitability of farming operations to a great extent. Under Crop Varieties
the supervision of foreign consultants, our engineering
team is making full use of these techniques to achieve Promising Sugarcane varieties play an important role
higher yield at lower costs. in crop improvement and sustainable farming. We are
progressing with some promising sugarcane varietal lines
at JDW Research Farm. These lines have been selected
in 2021-22 from J12, J15 and J16 nurseries which were

produced from JDW sugarcane breeding station located at are doing hot water treatment every year and keep building
Thatha. At this stage, these varieties are under multiplication the healthy seed nurseries at our farms. This practice is very
process at JDW corporate farms for further testing on a important to keep the disease pressure under economic
larger area. These have been planted on different soil types threshold level.
for adoptive trials in 2022. More qualitative and quantitative
data will be taken to see their adoptability on larger fields.
Further sugarcane seedlings have been produced every
Weed Management
year through breeding of selected parents. We are utilizing Creeping weeds like morning glory and twine vine is
both local and foreign germplasm in breeding having good going serious problem among farms. These weeds are
traits. introduced around flood areas around Indus river bank in
2010. A serious efforts of herbicide trials are underway to
Production of disease free seed for corporate farms control and check the further spread of these weeds. JDW
and local growers and Production of certified seed is making long and short term strategies which are now at
(Disease free seed playing vital role in sugar industry). final stage.
Recent tests revealed ratoon stunting RSD and White leaf

disease WLD is found common in commercial cultivars Hot Water Treatment
of the area. In this scenario seed certification is important
to keep sustain cane production through these locally
(HWT) Facility
adopted cultivars. Hot water treatment of the seed is the Hot water treatment is primarily required to ensure disease
only solution to minimize the impact of above mentioned free seed for farms. Small portable HWT plant was setup
diseases. JDW have constructed large heat treatment in 2014 under crop improvement (R&D), new portable
facilities at each mill and seed treatment has been done setup was imported last year and HWT started in 2016-17.
successfully. Disease free seed nurseries have established Fixed hot water treatment plants of bigger capacity is now
at JDW corporate farms. This is a continuous process. We constructed at unit I and DSM. These plants are now in
operation.

Irrigation
JDW has always emphasized on improving irrigation over 450,000 tons of cane over 13,000 acres per season.
efficiency in the region. Over the years, irrigation using The mechanical harvest and transport system continues
poor quality tube well water has led to serious soiled to evolve into a world class operation as efficiencies
gradation that resulted in loss of yield. At JDW, all ground improve with new innovations, improved infrastructure and
water sources are constantly tested in the laboratory improved farm designs.
to ensure that suitable water is supplied to crops. The
farms are designed using latest laser levelling technology Cane production is affected by both harvesting and field
to ensure improved irrigation, at reduced costs and issues which can impact on sugar quality and quantity.
increasing yield potential. In recent times, addition of Both harvesting efficiency and crop presentation affect
flow-meters on irrigation sources started to quantify the cane yield, cane quality and ratooning. Foreign consultants
efficiency of irrigation. In addition, early hill up technique are working with JDW and have developed Harvesting
is developed to conserve moisture which leads to improve Best Practice (HBP) guidelines to reduce cane loss,
water use efficiency. improve cane quality, and reduce stool damage. The HBP
guidelines also focus on the impact that crop presentation
Harvesting Operations has on harvesting efficiency. Information available covers
topics such as farming for efficient harvesting; the effect of
JDW has adopted the use of mechanical harvesters extractor fan speed on cane loss, crop yield, Commercial
and prime mover cane transport systems for harvesting Cane Sugar (CCS), reduction in base cutter/chopper
and transporting cane from farm to mill on timely basis. losses; and improvement in billet quality for planting.
This saves a lot of harvesting and transportation costs
and crucial cane nutrition. JDW currently operates 16
harvesters and has the capacity to mechanically harvest

CORPORATE SOCIAL
RESPONSIBILITY
Sugarcane Crop We are investing huge budget for provision of pesticides to
growers for the management of these pests. Field teams
Improvement Program consisting of development and cane departments have
rigorously followed the crop of every grower to control
Variety Development these pests. Alhamdolillah with coordinated efforts of field
staff and with patronage of JDW Group’s management we
Sugarcane variety is a basis for successful business of have ideally managed the populations of above mentioned
production of white refined sugar because every variety all insect pests. For managing these pests we are using
has different sugar accumulation potential. The Major best chemistries of pesticides and organize the group
threat to sugarcane varieties is outback of disease meetings with Growers regarding pest management.
particularly disease of mature stalk like “Red Rot”. In
recent past our main variety i.e. SPF-234 was hitted by this
disease and now another variety i.e. CPF-246 is damaging Livestock Support Project
due to Red Rot disease. Due to this reason replacement of
varieties becomes most important task for any sugar mills Services to our growers, JDW Sugar Mills Ltd. owns a
of this area. In recent past we have introduced two disease dedicated Livestock (Dairy and fattening animals) has
resistant varieties i.e. CP.77-400 and CPF-253 in our area. a major share in economy of rural community residing
in our crushing zone. But due to lack of awareness, skill
and resources growers are not harnessing full potential of
Disease Management
animals either in form of milk or meat. For providing efficient
Most important diseases which have destructive impact and economical and skilled team of Veterinary Assistants
on sugarcane varieties are “Red Rot”, “White Leaf” and and A. I. Technicians for providing following facilities to our
“Smut” disease. Crushing zone of JDW Group Mills are growers at their door step.
facing problem of all these diseases. To save our crop from
these diseases we are fighting on following frontiers: 1. Artificial Insemination by using high quality semen for
breed improvement.
(i) Introduction of disease resistant varieties. 2. Deworming of animals for control of endo and ecto
(ii) Managing insect vectors responsible for spreading parasites.
WLD. (White Leaf Disease) 3. Vaccination for control of diseases like FMD, HS and
(iii) Spray of fungicides for control of disease outbreaks. ETV etc.
4. All kind of emergency treatment on phone call.
Insect Pest Management 5. Special care of model animals for increasing meat
and milk production by use of balanced nutrition.
As far as insect pests are concerned; Pyrilla and Black bug
are major sucking pests in our crushing zone and stem and
All medicines are provided to the growers without any
top borers are among the major chewing type insect pests.
profit at purchase price and operational cost is borne by
the JDW Sugar Mills Ltd.

Sugarcane Productivity The following activities have been
carried out in the SPEP area
Enhancement Project
(SPEP) •
•
Community Mobilization carried out by NRSP
Organization of small farmers into Community
SPEP was initiated with combined efforts of JDW Sugar Organization (CO)
Mills and NRSP in 2000 with the objective of enabling • Providing them planning and management training
10,000 farmers with small landholdings to double their per
acre yield of sugarcane, and thereby raise their incomes • Development of marketing channels
and standard of living, over three years. The project was
launched in District Rahim Yar Khan in areas adjacent to the Extension services carried out
JDW Mill. We have intervened in one hundred eleven (111)
by JDW Mills
union councils and 846 revenue villages within these union
councils, 193,026 acres of land and 109,311 households in • Arrangement of quality inputs
four (04) tehsils namely ‘Rahim Yar Khan’, ‘Khan Pur’, ‘Liaqat
• Giving technical advice
Pur’ and ‘Sadiqabad’. It is a comprehensive and intended
intervention for agriculture production expansion and the • Better agronomic practices
living standards of poor people. Its need was felt when the
statistics of the region showed the declining trends in the Financial Services carried out both by
acreage of sugarcane. The declining trend was attributed NRSP and JDW Mills i.e., SPEP
to poor seed quality, low yields, nonscientific agronomic
practices, lack of access to credit and delayed payment • CO savings
to small growers by the Mills which discouraged the small • Credit for fertilizer
farmers and growers. Therefore, another objective of SPEP
was to double the production of sugarcane of 10,000 small • Credit for agriculture machinery and implements
farmers living in designated Union Council around the
JDW Mills in RYK. SPEP has been designed to enhance With continued support from JDW Sugar Mills, NRSP
small farm (<20 acres) profitability through agriculture & expanded its operation in 111 union councils. The
livestock extension services and provision of credit without number of active COs grew in 2021-22 up to 11,905 with a
collateral. The community organizations (COs) receive membership of 121,181 farmers. The main features of the
SPEP support from a professional team consisting of SPEP include:
a social organizer, an agricultural extension officer, and
a veterinary officer. The SPEP program had a significant
positive impact on total household income, farm income,
sugarcane income, and household expenditures.

• Increase income of poor rural people by the increase NRSP has distributed loans of Rs. 1,103 million in the year
in per acre yield of sugarcane, through: 2021-22 to raise the productivity & income of the farming
communities, which is really helping to increase the social
• Improvement in production technology and economic life of the rural communities.
• Resource use efficiency
SPEP program has a significant impact on the income of
• Need-based support (credit, agri-machinery, participating households in treatment villages especially
inputs, seed etc.) for those rural households that participate in CO over
• Assurance of timely payments by sugar mills. longer periods.
• Ensure enough quality sugarcane in the catchment

area of sugar mills. Flood Relief Activities
• Social mobilization and organization of the rural poor
JDW has a strong commitment towards our social
into Community Organizations (COs)
responsibility and keep trying to contribute whenever such
• Provision of agricultural extension services; agricultural a situation arises, JDW considers this as a duty to help our
graduates employed by JDW Sugar Mills provide fellow brethren during these hard times. In the year 2022,
services through direct advice in CO meetings, the natural calamity played havoc in most parts of the
published literature and farm visits. country. In view of the higher scale of devastation caused
• Credit facility from JDW Sugar Mills and NRSP for the by the floods, JDW contributed in PM’s & KPK CM’s
purchase of seed and other agricultural inputs on the flood relief funds and also provided relief activities in the
guarantee of the COs. flood effected areas of the country by providing Rashans,
Water proof tents & Mosquito nets. JDW on Group basis
• Small farmers have access to new Seeds, Pesticides/ contributed approx. Rs. 98 million for the relief activities in
farm machinery provided by JDW Sugar Mills on credit the flood effected areas of the Country.
at subsidized rates.

02
FINANCIAL
PERFORMANCE
24 Operating Highlights
25 Production Data
WE DELIVERED
Gross Earnings per

Revenue Share
67 66.09
Rs. in billion Rs. per share
Profit after Cash

Tax Dividend
3,951
Rs. in million
275%
% age per share
Share
Price
260
Rs. per share
30 Sep 2022

AS COMMITTED
2021-2022
Shareholders’ Growers’ Payment

Equity on Group Basis
16.9 56
Rs. in billion Rs. in billion
Total Current
Assets Ratio
46.5
Rs. in billion
1.11
Times
Contribution
to National
Exchequer
8,892
Rs. in million

OPERATING
HIGHLIGHTS
(Rupees in thousand)
2022 2021 2020 2019 2018 2017
Gross revenue 67,027,986 64,908,275 60,754,018 54,724,042 40,251,476 49,962,325

Revenue from contracts with customers 58,887,908 56,800,292 52,457,860 49,119,853 37,264,506 45,431,957
Cost of revenue 49,737,504 46,664,716 44,867,941 43,903,668 34,517,475 40,807,425
Administrative and selling expenses 2,207,964 1,954,335 1,706,550 1,303,568 1,088,427 1,184,061
Finance cost 3,404,137 2,251,743 3,550,397 3,511,601 2,269,761 1,665,294
Other expenses 393,288 3,692,881 584,371 754,316 5,238 166,528
Other income (1,967,634) (2,210,705) (672,739) (593,359) (475,637) (571,049)
Profit from operations 8,516,787 6,699,065 5,971,737 3,751,660 2,129,003 3,844,992
Profit / (loss) before taxation 5,112,649 4,447,322 2,421,340 240,060 (140,758) 2,179,698
Profit / (loss) after taxation 3,950,558 4,878,296 1,398,517 553,296 (203,441) 1,588,396

Basic earnings / (loss) per share Rs. 66.09 81.61 23.40 9.26 (3.40) 26.57
Interim Dividend - cash % 150 – – – – 100
Final Dividend - cash % 125 100 – 100 – 30
Total Dividend - cash % 275 100 – 100 – 130
Gross Revenue Operations Profit

Rupees in Million Rupees in Million
64,908 67,028
60,754
8,517
54,724
49,962
6,699
40,251 5,972
3,845 3,752
2,129
2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022
Years Years
Profit / (loss) for the Year Earnings / (Loss) Per Share

Rupees in Million (Rupees)
4,878
81.61
3,951
66.09
1,588
1,399 26.57
23.40
553 9.26
(203) (3.40)
2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022
Years Years

PRODUCTION
DATA
2022 2021 2020 2019 2018 2017
Unit - I
Sugar production M.Tons 336,630 255,396 260,845 287,394 409,507 357,733
Sugar recovery % age 10.16 10.06 10.58 11.61 10.91 10.14
Molasses production M.Tons 156,887 112,167 102,835 96,101 175,655 154,437
Molasses recovery % age 4.74 4.42 4.17 3.88 4.68 4.38
Unit - II
Unit - III
JDW Sugar Mills Limited
Sugar Production Sucrose Recovery

(M.Tons) (%age)
11.29
888,711 10.55
10.27 10.36
9.98 10.01
813,406
781,634
640,277
548,219 556,142
2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022
Years Years

03
DIRECTORS’
REVIEW
28 Chairman’s Review
CHAIRMAN’S REVIEW
On Board’s overall Performance u/s 192
of the Companies Act, 2017
JDW Sugar Mills Limited complies with all the requirements over the next three to five years. Further, the Board sets
set out in the Companies Act, 2017 (‘‘the Act’’) and the Listed annual goals and targets for the management in all major
Companies (Code of Corporate Governance) Regulations, performance areas.
2019 (‘‘Regulations’’) with respect to the composition,
procedures and meetings of the Board of Directors The Board members diligently performed their duties
and its committees. As required under Regulations, an and thoroughly reviewed, discussed and approved
annual evaluation of the Board of the Directors (‘‘the business strategies, corporate objectives, budget plans,
Board”) of JDW Sugar Mills Limited (‘‘the Company”) is financial statements and other reports. It received clear
carried out. The purpose of this evaluation is to ensure and succinct agendas and supporting written material in
that the Board’s overall performance and effectiveness is sufficient time prior to Board and committee meetings. The
measured and benchmarked against expectations in the Board met frequently enough to adequately discharge its
context of objectives set for the Company. Areas, where responsibilities. The Board remained updated with respect
improvements are required, are duly considered and to achievement of Company’s objectives, goals, strategies
action plans are framed and implemented. and financial performance through regular presentations
by the management, internal and external auditors and
For the purpose of Board evaluation, a comprehensive other independent consultants. The Board provided
criteria has been developed. The Board has recently appropriate direction and oversight on a timely basis.
completed its annual self-evaluation for the year ended
September 30, 2022 and I report that: The Board members effectively bring diversity to the Board
and constitute a mix of Independent and Non-Executive
The overall performance of the Board measured on the Directors. The Non-Executive and Independent Directors
basis of approved criteria for the year was satisfactory. were equally involved in important Board decisions. The
Board has effectively set the tone at the top, by putting in
The overall assessment, as satisfactory, is based on an place a transparent and robust system of governance. This
evaluation of the following integral components, which is reflected by setting up an effective control environment,
have a direct bearing on the Board’s role in achievement compliance with best practices of Regulations and by
of Company’s objectives: promoting ethical and fair behaviour across the Company.
The Board members are familiar with the current vision,

mission and values and support them. The Board revisits
the mission and vision statement from time to time. The
Board has a clear understanding of the stakeholders
(shareholders, customers, employees, vendors, society
at large) whom the Company serves. The Board has a 05 January 2023 Chairman
strategic vision of how the organization should evolve Lahore

2019
2022
٢٠٢٣ ٥

DIRECTORS’
REPORT
We, on behalf of the Board of Directors of JDW Sugar Mills Limited, are pleased to
present the Company’s 33rd Annual Report together with the Audited Financial
Statements for the year ended 30 September 2022.
Overview
JDW Sugar Mills Limited (“the Company”) was incorporated in Pakistan on 31 May 1990 as a private limited Company and was subsequently
converted into a public limited Company on 24 August 1991. Shares of the Company are listed on the Pakistan Stock Exchange Limited.
The Registered Office of the Company is situated at 17 - Abid Majeed Road, Lahore Cantonment, Lahore. The principal activities of the
Company are production and sale of crystalline Sugar, Electricity and managing Corporate Farms.
Operating Results
Operating results of the Company for the year under review are summarized below:
2021-22 2020-21
Description
JDW-I JDW-II JDW-III COMBINED JDW-I JDW-II JDW-III COMBINED
Sugarcane Crushed M. Tons 3,311,789 2,408,562 2,091,205 7,811,556 2,537,605 1,621,775 1,411,576 5,570,956
Sugar Production M. Tons 336,630 235,506 209,498 781,634 255,396 159,800 140,946 556,142
Sucrose Recovery %age 10.16 9.78 10.02 10.01 10.06 9.85 9.99 9.98
Molasses Production M. Tons 156,887 124,116 102,488 383,491 112,167 78,991 65,104 256,262
Molasses Recovery %age 4.74 5.15 4.90 4.91 4.42 4.87 4.61 4.60

The comments on above operating results
are as under:
Sugarcane crushed in the current crushing season was higher by 40% whereas sugar produced was 41% higher with just 3 bps increase
in the sucrose recovery, however molasses recovery was up by 31 bps compared to last year. Crop size this time was approx. 36% more
and the country has produced 41% additional sugar taking it from 5.619 million tons to 7.911 million tons.
Deharki Sugar Mills (Pvt.) Limited (“DSML”) being wholly owned subsidiary of the Company has achieved the following operating results
in its 11th year of operations:
Operating Results – Subsidiary Company

2021-22 2020-21
Sugarcane Crushed M. Tons 1,953,090 1,270,152
Sugar Production M. Tons 196,560 125,757
Sucrose Recovery %age 10.06 9.90
Molasses Production M. Tons 96,603 60,000
Molasses Recovery %age 4.95 4.72
For DSML, sugarcane crushed was 54% higher whereas increase in sugar production was 56% with 16 bps increase in the sucrose
recovery as compared to last crushing season. Molasses recovery this time is also 23 bps more than last year.

DIRECTORS’
REPORT
Overview of Financial Results:
An analysis of the key operating results of the Company is given below:
(Rs. in Million)
30 Sep 2022 30 Sep 2021
Gross Revenue 67,028 64,908
Revenue from Contracts with Customers 58,888 56,800
Profit from Operations 8,517 6,699
Finance Cost 3,404 2,252
Profit before Tax 5,113 4,447
Profit after Tax 3,951 4,878
Earnings per Share 66.09 81.61
• There has been increase of 3% in the gross turnover of the We are pleased to inform our shareholders that all the
Company which is primarily due to more sale of molasses three business segments of the company i.e., sugar, co-
and some additional sugar stock both at better average gen power projects and corporate sugarcane farms were
prices. However, there is a drop in the gross profit ratio in profit this year and Corporate Farms and Co-Gen power
from 18% to 16% mainly attributable to increase in the projects have also contributed reasonably in achieving
average sugarcane procurement cost caused by cane profitability after tax of Rs. 4.0 billion. Consolidated
procurement competition started in the beginning of Profit After Tax (PAT) on Group basis is Rs. 4.3 billion as
the crushing season despite better sugarcane crop and compared to Rs. 4.6 billion last year. In Corporate Farms
highest ever sugar production in the country. we have an area of approximately 25,000 acres of leased
and owned agricultural land contributing up to approx.
• Profit from operations has registered increase of 27%
8% of the total sugarcane procurement of the Group.
over last year which has increased from Rs. 6.7 billion to
Rs. 8.5 billion because of no major provision this time as • There has been 13% increase in the administrative
against provision of Rs. 3.3 billion accounted for last year expenses of the company over last year which was
on account of receivables from CPPA-G. mainly due to annual increase in the salaries, wages
and other benefits, donations for flood relief activities
• In spite of good increase in profit from operations as
and depreciation expense. Selling expenses have also
stated above there has been 19 % reduction in profit after
increased from Rs. 38 million to Rs. 50 million owing to
tax of the Company which has reduced from Rs. 4,878
annual increments and rising inflation factor.
million to Rs. 3,951 million resultantly earnings per share
of the Company have also dropped from Rs. 81.61 to • Other income has decreased from Rs. 2,211 million to
Rs. 66.09 which is mainly attributable to the following two Rs. 1,968 million mainly because of decrease in mark up
reasons: on delayed payments by CPPA-G in the current year.
i) Substantial increase in the financial cost of • There has been substantial decrease in Other Expenses
the company i.e., Rs. 1,153 million caused by due to write off of Rs. 3.3 billion accounted for last year
periodically rising discount rates by the SBP from on account of energy receivables from CPPA-G against
time to time during the period of last 12 months. electricity supplied to the national grid.
Discount rate was 7.25% per annum in the month
• In view of the consistent better performance of the
of Nov-21 which at the balance sheet date was
Company, all financial covenants are improving every
15% per annum i.e., higher by more than 100%.
year. This year too, the Company is fully compliant with
Subsequent to the balance sheet date there has
all financial covenants agreed upon with the financial
also been another 1% increase in the discount rate
institutions from time to time and fulfilling it’s all financial
by the SBP.
obligations on time and enjoys good relationship with all
ii) Increase in the provision of deferred tax by Rs. 1.9 the financial institutions it’s dealing with.
billion due to reduction in available carry forward tax
• At year end our energy receivables stand at Rs. 2.3 billion
credits, depreciation losses and imposition of 4%
from Central Power Purchasing Agency (Guarantee)
super tax on taxable profits of the company through
Limited (CPPA-G) which have considerably come down
Finance Act 2022.
from the level of Rs. 7.3 billion in the year 2018-19. These

receivables are equivalent to our six months’ sales. As has major impact on cost of production. On Group basis
compared to previous years there has been considerable approximately Rs. 3.4 billion was extra paid to growers
improvement in sales collections from CPPA-G and over and above the enhanced sugarcane support prices
Company is regularly receiving good amounts of money as stated earlier. Growers were happy for getting better
every month. We are thankful to CPPA-G for their co- sugarcane prices and timely payments (100%) through
operation. their bank accounts only. Growers now have started
enjoying payments through their bank accounts because
• Further to the above, the bagasse pricing issue of
of various comforts available in this system.
Bagasse Based Co-Gen Power Projects (Total 8 in
numbers and aggregate plant capacity is 259.10 MW) • As usual growers’ payment has remained our top priority
is still pending since October 2018 with National Electric being one of the main keys of our success. This was the
Power Regulatory Authority (NEPRA). The company was 4th consecutive crushing season in which all the growers
in litigation with NEPRA for its Order passed relating to of the Company were successfully fully paid through
bagasse pricing based on its Suo moto action in the year bank accounts throughout the season which was very
2019. The case was pending with honourable Islamabad well appreciated by the growers. Further Company also
High Court since last more than three years. The Court regularly provides financial assistance and technical
has recently referred this case to the newly constituted support to its growers. Due to these policies and
Appellate Tribunal of NEPRA which has remanded this preferential treatment with growers, the Company enjoys
case back to NEPRA for its review. We are expecting excellent relationship with all of them.
hearing notice from NEPRA soon and are very hopeful
• Through Finance Act, 2022 super tax has been levied
that this long outstanding issue would be resolved
under section 4C of the Income Tax Ordinance, 2001
mutually between NEPRA and Bagasse based IPPs in
which is applicable on high earning persons at the rate
2022-23.
of 4% for Tax Year 2022 and onwards. However, entities
• The balance sheet size has increased to Rs. 46 billion operating in various sectors, including sugar sector,
from Rs. 36 billion last year and accumulated reserves are liable to pay super tax at the rate of 10% of taxable
are now 27 times of the paid-up capital of the Company. income for the financial period ended 30 September
2021 (i.e., Tax Year 2022).
Other points of your The Company has filed Writ Petition before the
interest are summarized

Honourable Lahore High Court challenging the ultra vires
of section 4C of the Income Tax Ordinance, 2001. The
below: Honourable Lahore High Court has granted interim-relief
in the afore-mentioned petition till the final decision of
• JDW Group’s contribution in the overall country’s sugar the Court. The financial impact of super tax for the year
production was 17% in year 2017-18 which now has ended 30 September 2021 (Tax Year 2022) amounting
dropped to 12% because of various measure taken by to Rs. 132.6 million has not been recognized in these
Federal Board of Revenue (“FBR”) since last three years financial statements.
to curb sales tax evasion in the sugar industry that is why However, financial impact of super tax under section 4C of
country has recorded highest ever sugar production in the Income Tax Ordinance, 2001 has been accounted for
2021-22. Credit goes to FBR. in provision for current and deferred taxes in the financial
• For crushing season 2021-22, notified support prices statements for the year ended 30 September 2022.
of sugarcane were revised to Rs. 225 from Rs. 200 • Alhamdulillah, VIS Credit Rating Company Limited (VIS)
per 40 kgs by the Provincial Govt. in Punjab whereas has upgraded the entity ratings of JDW Sugar Mills
it was increased to Rs. 250 from Rs. 202 per 40 kgs Limited (JDWS) from ‘A/A-2’ (Single A/A-Two) to ‘A+/A-
in the Province of Sindh whereas despite bumper 1’ (Single A Plus/A-One) on 15 April 2022. The medium
sugarcane crop in the country there was a price war for to long-term rating of ‘A+’ denotes good credit quality
sugarcane procurement among all sugar mills started coupled with adequate protection factors. Moreover, risk
in the beginning of the crushing season for reasons factors may vary with possible changes in the economy.
still unknown to us. The actual average sugarcane cost The short-term rating of ‘A-1’ denotes high certainty of
was around Rs. 250 per 40 kgs which has resulted timely payment, excellent liquidity factors and supported
in increasing the sugar production cost. This cost by good fundamental protection factors. Outlook on the
component alone constitutes approx. 82% of the total assigned ratings is ‘Stable’.
production cost of the sugar so any variation in this cost

DIRECTORS’
REPORT
• Faruki Pulp Mills Limited (“the subsidiary company”) has Mills (Pvt.) Limited. Consequently, the Group will be taxed
been, for the considerable number of years, unable to as one fiscal unit and a combined Income tax return of
commence its commercial operations and considering JDW Sugar Mills Limited and Deharki Sugar Mills (Pvt.)
this fact management of the Company has principally Limited would be filed for the accounting year 2021-22
decided not to inject further funds in the subsidiary under Group Taxation.
company as significant capital expenditures are required.
Moreover, keeping in view commercial viability of the
plant as well as the substantial accumulated losses
Relationship with Growers
the management of the Subsidiary Company has The Company enjoys cordial relationship with the farmers’
determined that the company might not be able to realize community as it considers the growers to be its backbone. To
its assets and discharge its liabilities in the normal course maintain and further strengthen the relationship, the Company
of business. During the last year, the FPML through a as a matter of principle gives priority and endeavours to;
special resolution passed in its Extraordinary General
Meeting “EOGM” held on 25 March 2020 resolved to • Consistently follow the policy of timely payments of
dispose of its property, plant and equipment either in sugarcane to growers through their bank accounts.
parts or in their entirety to prospective buyers after due • Fulfill farmers’ financial requirements by providing them
process, but due to COVID-19 situation in the country financial assistance from own sources & by arranging
this was not completed during the current year and loans for them from banks. During period under review,
the said arrangement was re-approved by the FPML huge amount of Agri loans were advanced to growers in
shareholders in its EOGM held on 13 December 2021. the form of cash, seed, agricultural implements, turbines
However, subsequent to year end, the management of & tube wells, fertilizers and pesticides.
FPML has initiated the tendering process for disposal of
• Procure and provide latest agricultural equipment on
assets. We are expecting to complete this process in the
subsidized rates to growers on easy installment basis.
year 2022-23.
• Enhance technical skills through various extension and
• Federal Board of Revenue “FBR” has issued Sales
advisory programs.
Tax General Order No. 05 of 2021-22 on 11 November
2021, with subject of Implementation of Track & Trace • Provide better quality and better yield varieties of
System. As per order, no sugar bags shall be allowed sugarcane resulting in increased productivity in
to be removed from production site or factory without sugarcane yield per acre.
affixation of Tax Stamps / Unique Identification Marking
(UIMs) with effect from 11 November 2021, which are
to be obtained / procured from FBR Licensed vendor
Future Outlook
only. However, Automatic Applicators provided by • Crushing season 2022-23 was started on 25 November
Authentix the vendor, neither work successfully last year 2022 in our units in Punjab and in Sindh DSML was
nor this year and all sugar mills are affixing tax stamps started on 27 November 2022 and Unit III was started on
manually. FBR should continue its efforts for the ongoing 28 November 2022 and on Group basis up to 4th January,
crushing season 2022-23 and also try to come over the 2023 sugar produced was 308,629 tons with average
shortcomings it faced during the last crushing season. sucrose recovery of 9.91%. (Comparatively in 2021-22 as
Apparently, implementation of TTS this year is not as reported in the last balance sheet: crushing season was
effective as it was last year. FBR needs to work on it with started in Punjab Units on 15th November, 2021 and in
same letter and spirit to increase its revenue and provide Sindh Units on 21 November 2021 on group basis up to
level playing field to fully compliant sugar mills. Now FBR 4th January, 2022 sugar produced by the Company was
should also find out practical ways out to document the 308,539 tons with average sucrose recovery of 9.08%).
sugar trade which is also another uphill task.
• In November 2022, State Bank of Pakistan (SBP) has
• During the year, the Company has filed an application to further increased base rate from 15% to 16% which will
Securities & Exchange Commission of Pakistan (‘SECP’) result in increasing the financial cost of the Company and
for Group Taxation under regulation 8 of the Group may adversely affect the profitability of the Company in
Companies Registration Regulation 2008. The above- future.
mentioned application has been considered by the
SECP and issued the designation letter to the Company
for Group Taxation for the Group which comprises of the
Company and its wholly owned subsidiary, Deharki Sugar

DIRECTORS’
REPORT
• The crop size for crushing season 2022-23 is lessor for recovery of this amount from the Sindh Government.
than last year due to floods 2022, The Pakistan’s Approx. Rs. 3 billion of all sugar mills in Sindh is stuck up
Sindh Province accounts for 20% to 25% losses of the causing liquidity issues for the mills. Federal Government
sugarcane production due to 2022 Pakistan floods. Also, and Government of Punjab have already released their
growers are experiencing low yield per acre ranging from share of export subsidies almost four (04) years ago.
10% to 20% from area to area. Better sucrose recoveries Sugar mills in Sindh have filed a writ petition in the Sindh
being achieved in crushing season 2022-23 and increase High Court for recovery of this amount.
in area under cultivation last year are the positive factors
• Financial year 2022-2023 seems to be more challenging
which can mitigate to a large extent the negative impact
due to prevailing economic conditions of the country,
of floods and low yields per acre. It is expected that even
increase in discount rate by SBP may cause drastic
this year country will produce sugar in excess of its annual
increase in finance cost of the Company and increase
requirement and expected range of sugar production for
in sugarcane support prices by the provinces which
crushing season 2022-23 is 7.0 million tons to 7.5 million
increases the production cost of sugar with no adequate
tons.
corresponding increase in the sugar prices. On 21
• For ongoing crushing season 2022-23, notified support December 2022, Government initially allowed sugar
prices of sugarcane have again been increased to Rs. export quantity of 100,000 tons only out of surplus of 1.0
300 from Rs. 225 per 40 kgs in Punjab and to Rs. 302 million tons with fortnightly review to increase the quota
from Rs. 250 per 40 kgs in the Province of Sindh. This after reviewing the domestic sugar prices and stock
increase in support price of sugarcane will ultimately levels at each fortnight. During first week of January,
result in increasing the production cost of the sugar. 2023, Federal Government has allowed another lot of
Prices of sugarcane which is a major cost component 150,000 tons making total permission to 250,000 tons.
are determined by the Provincial Governments every year On 25 November 2022 just before start of crushing
whereas prices of sugar are left on the market forces season 2022-23 surplus sugar of 1.0 million tons was
causing big issue for the sugar industry. Gap between available in the country but Federal Government has not
prices of imported sugar and local sugar is now more taken timely and good decisions to export this surplus.
than 100%. If we today import sugar in the country it Consequently, international prices now have dropped
will cost around Rs. 175 per kg as against local sugar from US $ 700 per ton to US $ 547 per ton causing loss
which is being sold at ex-mill price of Rs. 85 per kg to the sugar industry as well as to the country for foreign
because of surplus sugar in the country. There is a need exchange. Allowing export of just 250,000 tons as against
to stabilize sugar prices by taking measures to reduce carryover surplus of 1.0 million tons of sugar stock plus
the gap between imported and local sugar prices so that more surplus is in the pipeline for ongoing crushing
growers can get better prices of their produce according season is a highly disappointing decision for the sugar
to the international prices of the commodity and sugar industry. Poor decision making at Government level is not
industry can make reasonable profits to further improve letting this industry to grow at its real potential.
its profitability.
• We are maintaining continued good performance and
• Further, there has been no improvement in the case of want to focus more on reduction of debt to further
amount due from TDAP on account of Inland Freight reduce the financial cost of the company and sugarcane
Subsidy of Rs. 306 million for JDWSML and DSML development in the vicinity of all our mills by introducing
which is still awaited. Company has completed all its new varieties & working more on pest controls.
formalities relating to documentation and in certain
cases instructions to banks were also issued by TDAP
to release payments but as of today not a single penny
has been received. On overall industry basis an amount
of Rs. 2.6 billion is stuck up since last more than nine (09)
years. The company has decided to file a writ petition in
Lahore High Court for recovery of this amount.
• On Group basis an amount of Rs. 405 million is also due
from the Government of Sindh on account of subsidy for
sugar exports made in the year 2017-18. Sugar Mills in
Sindh province has filed a petition in Sindh High Court

Corporate and Financial Sr.
No.
Name of Directors Designation
Meetings
Attended
Reporting Framework 1
Mr. Jahangir Khan
Executive Director 6
Tareen
The Directors are pleased to state that the Company is
Makhdoom Syed Chairman / Non-
compliant with the provisions of the Listed Companies (Code 2 7
Ahmad Mahmud Executive Director
of Corporate Governance) Regulations, 2019 (CCG) as
Chief Executive
required by Securities & Exchange Commission of Pakistan 3 Mr. Raheal Masud* 9
Officer (Ex-Director)
(SECP).
Mrs. Sameera Female / Non-
4 7
Mahmud Executive Director
Following are the statements on Corporate and Financial
Non-Executive
Reporting Framework; 5 Mr. Ijaz Ahmed 9
Director
6 Mr. Asim Nisar Bajwa Independent Director 9
• The financial statements present fairly the state of affairs
of the Company, the results of its operations, cash flow 7 Mr. Zafar Iqbal Independent Director 9
and changes in equity;
*Subsequent to financial year end 30 September 2022, Mr.
• Proper books of accounts of the Company have been
Raheal Masud resigned as Director of the Company on 8
maintained;
October 2022 and same was accepted by the Board on 10
• Accounting policies as stated in the notes to the financial October 2022, however Mr. Raheal Masud will continue to act
statements have been consistently applied in preparation as Chief Executive of the Company. Syed Mustafa Mehmud
of financial statements and accounting estimates are was appointed in his place as Director of the Company on 19
based on reasonable prudent judgment; October 2022.
• International Financial Reporting Standards, as applicable
in Pakistan and the requirements of Companies Act,
2017 have been followed in preparation of the financial
Audit Committee
statements; The Board has constituted an Audit Committee consisting of
• The system of internal control is sound in design and has three Non-Executive Directors and including an Independent
been effectively implemented and monitored; Director as its Chairman of the Committee. The Committee
regularly meets as per requirement of the CCG. The Committee
• There are no doubts about the Company’s ability to assists the Board in reviewing internal audit manual and
continue as going concern; internal audit system.
• There has been no material departure from the best
practices of corporate governance as detailed in the
listing regulations;
Human Resource &
• A statement regarding key financial data for the last six Remuneration Committee
years is annexed to this report;
The Board has constituted a Human Resource & Remuneration
• Information about taxes and levies is given in the notes to in compliance with the CCG.
the financial statements;
• There is no likelihood of any delayed payments or default
in respect of all loans availed by the Company; and
Nomination Committee
• During the year, 9 Board meetings were held. The The Board has constituted a Nomination Committee in
minutes of the meetings were appropriately recorded and compliance with the CCG.
circulated. Attendance was as under:

DIRECTORS’
REPORT
Risk Management Composition of Board
Committee The total number of directors are 7 as per the following:
The Board has constituted a Risk Management Committee in

a) Male: 06
compliance with CCG.
b) Female: 01
For composition of all Committees, please refer to Statement

The composition of the Board is as under:
of Compliance.
Sr.
Directors’ Remuneration No.
Category Names
Independent Mr. Asim Nisar Bajwa

The Company has formal policy and transparent procedure (i)
Directors Mr. Zafar Iqbal
for determining the remuneration of Executive Directors,
Mr. Jahangir Khan Tareen
Non-Executive and Independent Directors. Executive & (ii) Executive Directors
Non-Executive Directors are paid remuneration with view Mr. Raheal Masud (CEO)
of attracting and retaining Directors needed to govern the Makhdoom Syed Ahmad
Non-Executive Mahmud
Company successfully while Independent Directors are (iii)
Directors
entitled for the fee for attending the meetings. For information Mr. Ijaz Ahmed
on remuneration of Directors and CEO, please refer relevant Female Director
(iv) Mrs. Samira Mahmud
note to the financial statements. Further, Remuneration (Non-Executive)
packages of Directors and Chief Executive are given below:
(Rs. in million) Subsequent Events /

Name of
Designations
Remuneration Package Material Changes
Directors 2021-22 2020-21
Subsequent to year ended 30 September 2022, the Company,
Mr. Jahangir
Director 425 400 with the approval of the Company’s shareholders in Extra-
Khan Tareen
Ordinary General Meeting held on 03 November 2022 and in
Makhdoom
Director / compliance of Section 88 of the Companies Act, 2017 read in
Syed Ahmad 255 229
Chairman conjunction with the Listed Companies (Buy-Back of Shares)
Mahmud
Regulations, 2019, accorded to buy-back up to a maximum of
Mr. Ijaz Ahmed Director 11 10
Company’s 2,000,000 paid-up ordinary shares for cancellation
Mr. Raheal
Chief Executive 8 6 purpose through the Pakistan Stock Exchange Limited at the
Masud
spot/current price prevailing during purchase period i.e. 11
Directors’ Training
November 2022 to 02 May 2023 (both days inclusive) or till
such date that the purchase is complete, whichever is earlier.
Program The Company duly completed buy back of 2,000,000 shares
at average price of Rs. 446.10 per share of the Company on
All Directors are either exempted or have attended the training 02 January 2023. This will result in increasing earnings per
in prior years. share and break-up value per share of the Company.
Adequacy of Internal
Financial Controls
The Directors are aware of their responsibility with respect
to internal financial controls. Through discussions with
management and Auditors (both internal and external), they
confirm that adequate controls have been implemented by the
Company.

Dividend contributions to the fund are made both by the Company
and its employees in accordance with Fund’s Rules. As per
The Board of Directors of the Company has recommended audited accounts of the Employees Provident Fund, the value
a final cash dividend @ Rs. 12.50 (125%) per share for the of its investments as on 30 June 2022 is aggregating to Rs.
year ended 30 September 2022. This is in addition to the 893 million (2021: Rs. 760 million).
already declared and paid interim cash dividend @ Rs. 15
(150%) per share, thus making a total cash dividend to Rs. The Company also operates an Approved Funded Gratuity
27.50 (275%) per share for the year ended 30 September 2022 Fund Scheme covering all its eligible permanent employees
subject to approval of the shareholders in the Annual General in accordance with Gratuity Fund Rules. The value of its
Meeting. If you look at the track record of dividend payouts investments as on 30 June 2022 is aggregating to Rs. 253
of the Company, you will find that except for three years, the million (2021: Rs. 192 million).
Company has been making regular payments of dividends
since year 2000-01. National Exchequer
Pattern of Shareholding The Company has contributed a sum of Rs. 8,892 million
approximately to the national exchequer in the form of taxes &
There were 1,173 shareholders of the Company as of 30 duties during the year under review.
September 2022 (2020-21: 1,172) A statement of pattern of
shareholding is enclosed in this report. Corporate Social
Statement of transaction in shares of the Company by the Responsibility Activities
Directors, CEO, CFO and Company Secretary and their
spouses and minor children during the year is enclosed in this The Company undertook the Corporate Social Responsibility
report. Activities which are discussed in detail on pages from 16 to 19
during the year under review.

Environmental Policy Auditors
The Company has a comprehensive policy that is in strict
compliance with relevant environmental protocols. The present auditors M/s. Riaz Ahmad, Saqib, Gohar &
Co., Chartered Accountants retire and being eligible, offer
themselves for appointment for the Audit of the year ending
Principal Risks 30 September 2023.
Following are the potential risks which the Company may face;
• Higher sugarcane prices & other input costs
Acknowledgement
• Foreign currency fluctuations The Directors would like to express their appreciation for the
dedication, hard work of the workers, staff and members of the
• Delay in payments of subsidies & Government dues
management team for achieving better financial results in the
• Increase in mark-up rates current year. Growers are the key element of our industry and
• Coercive measures by the Provincial Governments we thank them for their continued support and co-operation.
The Directors of the Company are also thankful to the financial
• Surplus sugar in the country may keep sugar prices
institutions for their financial assistance and co-operation
depressed
they have always extended in providing finances especially
when it was going through difficult times of various inquiries
Value of Provident conducted by numbers of Government Departments.
Fund & Gratuity Fund

Investments
Chief Executive Director
The Company operates a Recognized Provident Fund Scheme
covering its eligible permanent employees. Equal monthly 05 January 2023
Lahore

04
UNCONSOLIDATED
FINANCIAL STATEMENTS
48 Independent Auditors’ Review Report
49 Statement of Compliance
58 Unconsolidated Statement of Financial Position
60 Unconsolidated Statement of Profit or Loss
61 Unconsolidated Statement of Comprehensive Income
62 Unconsolidated Statement of Cash Flows
63 Unconsolidated Statement of Changes in Equity
64 Notes to the Unconsolidated Financial Statements

INDEPENDENT AUDITORS’
REVIEW REPORT
To the Members of JDW Sugar Mills Limited
Review Report on the Statement of Compliance contained in Listed Companies (Code of
Corporate Governance) Regulations, 2019
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 JDW Sugar Mills Limited for the year ended
September 30, 2022 in accordance with the requirements of Regulation 36 of the Regulations.
The responsibility for compliance with the Regulations is that of the Board of Directors of the Company. Our responsibility
is to review whether the Statement of Compliance reflects the status of the Company’s compliance with the provisions of
the Regulations and report if it does not and to highlight any non-compliance with the requirements of the Regulations.
A review is limited primarily to inquiries of the Company’s personnel and review of various documents prepared by the
Company to comply with the Regulations.
As a part of our audit of the financial statements we are required to obtain an understanding of the accounting and internal
control systems sufficient to plan the audit and develop an effective audit approach. We are not required to consider
whether the Board of Directors’ statement on internal control covers all risks and controls or to form an opinion on the
effectiveness of such internal controls, the Company’s corporate governance procedures and risks.
The Regulations require the Company to place before the Audit Committee, and upon recommendation of the Audit
Committee, place before the Board of Directors for their review and approval, its related party transactions. We are only
required and have ensured compliance of this requirement to the extent of the approval of the related party transactions by
the Board of Directors upon recommendation of the Audit Committee.
Based on our review, nothing has come to our attention which causes us to believe that the Statement of Compliance
does not appropriately reflect the Company’s compliance, in all material respects, with the requirements contained in the
Regulations as applicable to the Company for the year ended September 30, 2022.

05 January 2023 Riaz Ahmad, Saqib, Gohar & Company
Lahore Chartered Accountants
UDIN: CR202210098gCdI0c1MY
RIAZ AHMAD, SAQIB, GOHAR & CO.

Chartered Accountants
Building No.35 - D / E, Ali Block, New Garden Town, Lahore.

Tel: (92-42) 35940246-7, Fax: (92-42) 35940248
Email: [email protected], Website: www.rasgco.com
Corporate Office at Karachi & Regional Office at Islamabad.
48
STATEMENT OF COMPLIANCE
With Listed Companies (Code of Corporate Governance) Regulations, 2019
Name of Company: JDW Sugar Mills Limited

Year Ended: 30 SEPTEMBER 2022
The Company has complied with the requirements of the Listed Companies (Code of Corporate Governance) Regulations,
2019 (the “Regulations”) in the following manner:
1) The total number of Directors are 07 as per the following:
a) Male: 06
b) Female: 01
2) The composition of the Board is as follows:
Sr. # Category Names

(i) Independent Directors*
Mr. Zafar Iqbal
Mr. Jahangir Khan Tareen
(ii) Executive Directors
Mr. Raheal Masud**
Makhdoom Syed Ahmad Mahmud
(iii) Non-Executive Directors
Mr. Ijaz Ahmed
Female Director
(iv) Mrs. Samira Mahmud
(Non-Executive)
*Fraction (0.33) related to the requirement for number of independent directors is less than 0.5 and therefore, has
not rounded up as one (01).
** Subsequent to financial year end 30 September 2022, Mr. Raheal Masud resigned as Director of the Company
on 8th October, 2022 and same was accepted by the Board on 10 October 2022, however Mr. Raheal Masud will
continue to act as Chief Executive of the Company. Syed Mustafa Mehmud was appointed in his place as Director
of the Company on 19 October 2022.
3) The Directors have confirmed that none of them is serving as a Director in more than seven listed companies,
including this Company.
4) The Company has prepared a Code of Conduct and has ensured that appropriate steps have been taken to
disseminate it throughout the Company along with its supporting policies and procedures.
5) The Board has developed a vision/mission statement, overall corporate strategy and significant policies of the
Company. The Board has ensured that complete record of particulars of significant policies along with their date
of approval or updating is maintained by the Company.
6) All the powers of the Board have been duly exercised and decisions on relevant matters have been taken by
Board / shareholders as empowered by the relevant provisions of the Companies Act, 2017 (the “Act”) and the
Regulations.
7) The meetings of the Board were presided over by the Chairman and, in his absence, by a Director elected by
the Board for this purpose. The Board has complied with the requirements of the Act and the Regulations with
respect to frequency, recording and circulating minutes of meeting of the Board.
8) The Board of Directors have a formal policy and transparent procedures for remuneration of Directors in
accordance with the Act and the Regulations.
9) All Directors are either exempted or have attended the training in prior years.
10) All appointments (including remuneration, terms and conditions of employment) of Chief Executive Officer (CEO),
Chief Financial Officer (CFO), Company Secretary and Head of Internal Audit have been duly approved by the
Board as per the requirements of applicable provisions of the Act and the Regulations.
11) Chief Financial Officer and Chief Executive Officer duly endorsed the financial statements before approval of the
Board.

12) The Board has formed Committees comprising of following:

Composition
Sr. # Name of Committee
Name Designation
Mr. Zafar Iqbal Chairman/Member
(i) Audit Committee Mrs. Samira Mahmud Member
Mr. Ijaz Ahmed Member
Mr. Asim Nisar Bajwa Chairman/Member
Human Resource &
(ii) Mrs. Samira Mahmud Member
Remuneration Committee
Mr. Ijaz Ahmed Member
Mr. Jahangir Khan Tareen Chairman/Member
(iii) Nomination Committee
Mr. Asim Nisar Bajwa Member
Mr. Jahangir Khan Tareen Chairman/Member
(vi) Risk Management Committee
Mr. Asim Nisar Bajwa Member
13) The Terms of Reference of the aforesaid committees have been formed, documented and advised to the
committees for compliance.
14) The frequency of meetings of the committees’ were as per following:
Sr. # Name of Committee Frequency of Meeting(s)

(i) Audit Committee 4
(ii) Human Resource & Remuneration Committee 8
15) The Board has set up an effective internal audit function controlled by internal audit department, which is
comprised of qualified and experienced professionals for the purpose and are conversant with the policies and
procedures of the Company.
16) The statutory auditors of the Company have confirmed that they have been given a satisfactory rating under the
quality control review program of the Institute of Chartered Accountants of Pakistan and registered with Audit
Oversight Board of Pakistan, that they and all their partners are in compliance with International Federation of
Accountants (the “IFAC”) guidelines on code of ethics as adopted by the Institute of Chartered Accountants of
Pakistan and that they and the partners of the firm involved in the audit are not a close relatives (spouse, parent,
dependent and non-dependent children) of the Chief Executive Officer, Chief Financial Officer, Head of Internal
Audit, Company Secretary or any Director of the Company.
17) The statutory auditors or the persons associated with them have not been appointed to provide other services
except in accordance with the Act, the Regulations or any other regulatory requirement and the auditors have
confirmed that they have observed IFAC guidelines in this regard.
18) We confirm that all other requirements of Regulations 3, 6, 7, 8, 27, 32, 33 and 36 of the Regulations have been
complied with.
05 January, 2023 (Makhdoom Syed Ahmad Mahmud)

Lahore Chairman
50
INDEPENDENT AUDITORS’ REPORT
To the members of JDW Sugar Mills Limited
Report on the Audit of the Unconsolidated Financial Statements
Opinion
We have audited the annexed unconsolidated financial statements of JDW Sugar Mills Limited (“the Company”), which
comprise the unconsolidated statement of financial position as at 30 September 2022, and the unconsolidated statement
of profit or loss, the unconsolidated statement of comprehensive income, the unconsolidated statement of changes in
equity, the unconsolidated statement of cash flows for the year then ended, and notes to the unconsolidated financial
statements, including a summary of significant accounting policies and other explanatory information, and we state that
we have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for
the purposes of the audit.
In our opinion and to the best of our information and according to the explanations given to us, the unconsolidated
statement of financial position, unconsolidated statement of profit or loss, unconsolidated statement of comprehensive
income, the unconsolidated statement of changes in equity and the unconsolidated 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 required and respectively give a true and
fair view of the state of the Company’s affairs as at 30 September 2022 and of the profit and other comprehensive income,
the changes in equity and its cash flows for the year then ended.
Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs) as applicable in Pakistan.
Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the
unconsolidated financial statements section of our report. We are independent of the Company in accordance with
the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants as adopted by
the Institute of Chartered Accountants of Pakistan (the Code) and we have fulfilled our other ethical responsibilities in
accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Emphasis of Matters
We draw attention to note 19.1.19 to these unconsolidated financial statements, which describes the Commission of
Inquiry has highlighted discrepancies with respect to crushing capacity of the Company and standard business practice
of Pakistan sugar industry. Our opinion is not modified in respect of above matters.
Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
unconsolidated financial statements of the current period. These matters were addressed in the context of our audit of the
unconsolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.


Tel: (92-42) 35940246-7, Fax: (92-42) 35940248

Following are the Key Audit Matters:
Sr. No. Key Audit Matters How the matters were addressed in our audit
1 Revenue recognition
Refer to notes 4.12 and 33 to these unconsolidated Our audit procedures, amongst others, included the
financial statements. following:
• obtained an understanding of the process relating
The Company principally generates revenue from sale to recording of revenue and testing the design,
of crystalline sugar, agriculture produce and electricity. implementation and operating effectiveness of
relevant key internal controls over recording of
We identified revenue recognition as a key audit matter revenue;
because it is one of the key performance indicator
• assessed the appropriateness of the Company’s
of the Company and gives rise to an inherent risk of
accounting policy for recording of revenue and
misstatement to meet expectations or targets. compliance of the policy with International
Financial Reporting Standard 15 (IFRS 15)
Revenue from contract with customers;
• reviewed the management procedures carried
out for evaluation of contractual arrangements
with customers (oral and written) with respect
to identification of each party’s rights regarding
the goods to be transferred and revenue has
been recognized after meeting the conditions of
IFRS 15;
• reviewed a sample of contractual arrangement
entered into by the Company with its customers
and checking the Company’s obligation to
transfer goods to a customer; for which the
Company has received consideration, has been
satisfied before recognition of revenue;
• compared a sample of sale transactions recorded
during the year with sales orders, sales invoices,
delivery orders and other relevant underlying
documents;
before and after reporting period and near the
year end with relevant underlying documentation
to assess whether revenue has been recorded in
the appropriate accounting period;
• compared a sample of energy sales transactions
with energy invoices duly verified by Central
Power Purchasing Agency (Guarantee) Limited
(“CPPA-G”) and assess whether the revenue has
been recorded in the appropriate accounting
period;
• for a sample of invoices, recalculated the invoice
amount based on fixed and variable component
provided by National Electric Power Regulatory
Authority (NEPRA);
• scanned for any manual journal entries relating
to sales recorded during and near the year end
which were considered to be material or met
other specific risk based criteria for inspecting
underlying documentation; and
• assessed the adequacy of disclosures in the
unconsolidated financial statements to be in
accordance with the applicable accounting and
reporting standards.
52
2 Valuation of biological assets (standing
sugarcane)
Refer to notes 4.6 & 27 to these unconsolidated Our procedures performed in considering the
financial statements. appropriateness of the valuation of standing
sugarcane included the following:
Significant judgement and estimates are used in • management’s representation with regards to the
determining the fair value of biological assets. At valuation techniques and fair presentation of the
30 September 2022, the fair value of the standing biological assets were obtained and evaluated;
sugarcane is Rs. 2,853 million which constitutes a • critically evaluated the fair value methodology
significant balance on the unconsolidated statement against criteria in IAS 41 ‘Agriculture’ and IFRS
of financial position. 13 ‘Fair Value Measurement’, measurements
and key assumptions applied by management
The value of standing sugarcane is based on the in determining the fair value of the standing
current estimated cane price for the following season sugarcane;
and sucrose content less the estimated cost of • examined the professional qualification of
harvesting, transport and other related cost. management’s expert and assessed the
independence, competence and experience of
Significant judgement is required in estimating the the management’s expert in the field;
expected cane yield, the maturity of the cane and the
• performed sensitivities to assess the impact of
estimated sucrose content for the various operating changes in the significant inputs;
locations and is also considered subjective since it
is based on executive management, its experience, • reviewed the principles used in the valuation
expectations and relevant current external factors. of standing sugarcane and analysed the key
assumptions used in the valuation model;
Given the value of the biological assets, together • detailed testing on the key inputs into the
with the significant judgement and estimates that are standing sugarcane valuation model including
required in determining the fair value, the valuation of estimated yields, estimated sucrose content and
biological assets is considered a key audit matter. forecast price to confirm the validity, accuracy
and completeness of the data by comparing the
data to market and other external data where
applicable;
• compared the prior year’s estimated yields,
estimated sucrose content and forecast price to
the current year actuals attained to assess the
reasonableness and accuracy of management’
estimates;
• reviewed the formulae as per the model and
recalculating for mathematical accuracy; and
• evaluated the adequacy of the unconsolidated
financial statements disclosures, including
disclosures of key assumptions, judgments and
sensitivities to ensure that they are in compliance
with the IAS 41 and IFRS 13.
3 Recognition of deferred tax assets relating to
Minimum Turnover Tax and Alternative Corporate
Tax (tax credits)
Refer to notes 4.9.2 & 10 to these unconsolidated Our audit procedures amongst others included the
• obtained understanding of management process
Under International Accounting Standard 12 of preparation of taxable income and liability
“Income Taxes”, the Company is required to review forecast and deferred tax calculation;
recoverability of the deferred tax assets recognized in
the unconsolidated statement of financial position at • tested management’s computation of un-used
tax credits for which deferred tax assets has been
each reporting period.
recognized;
• analyzed the requirements of Income Tax
Ordinance, 2001, in relation to above and
considered the ageing analysis, expiry periods of
relevant deferred tax assets and tax rates enacted
in consultation with our internal tax professionals;

Recognition of deferred tax assets is dependent on • assessed the reasonableness of assumptions
management’s estimate of availability of sufficient such as growth rate, future revenue and costs
future taxable profits against which carried forward and other relevant information for assessing
un-used tax credits can be utilized. The future taxable the quality of Company’s forecasting process in
profits are based on approved projections. determining the future taxable profits;
• tested mathematical accuracy of future
This estimation involves a degree of uncertainty and projections and the use of appropriate tax rate
requires judgement in relation to the future cash flows applicable on temporary differences; and
and also involves assessment of timing of reversal of
• assessed the appropriateness of management’s
un-used tax credits.
accounting for deferred taxes and the accuracy
of related disclosures in accordance with the
As at 30 September 2022, the Company has applicable accounting and reporting standards.
recognized deferred tax assets amounting to Rs.
1,811 million mainly on account of un-used tax credits.
We considered this as a key audit matter due to the

inherent uncertainty in forecasting the amount and
timing of future taxable profits and the reversal of
deductible temporary differences and management
judgement regarding assumptions used in this area.
4 Valuation of stock-in-trade
Refer to note 29 to these unconsolidated financial We assessed the appropriateness of management
statements. assumptions applied in calculating the value of stock-in-
trade and validated the valuation by taking following steps:
Stock-in-trade at the reporting date mainly included • assessed whether the Company’s accounting
bagasse and finished goods (sugar bags). policy for inventory valuation is in line with the
International Accounting Standards 2 “Inventories”;
The value of stock-in-trade at the reporting date
aggregated to Rs. 12,146 million representing 51% of • attended inventory count at the year-end and
the Company’s total current assets. reconciled physical inventory with inventory lists
provided to ensure completeness of data;
The valuation of finished goods at cost has different • assessed historical cost recorded in inventory
components, which includes judgment and valuation by checking purchase invoices on
assumptions in relation to the allocation of labour sample basis;
and other various overheads incurred in bringing the
inventories to their present location and conditions. • re-calculated the value of stock in trade by
allocating the fixed and variable overheads and
Judgment has also been exercised by the reviewed the adequacy of costing methodology;
management in determining the net realisable value of • performed net realisable value test to assess
finished goods and estimating the stock of bagasse. whether cost of inventories exceeded its net
realisable value by detailed review of subsequent
We identified this matter as key in our audit due to the sale invoices; and
judgment and assumptions applied by the Company
in determining the cost and net realisable value of • assessed the adequacy of disclosures in these
stock-in-trade at the reporting date. unconsolidated financial statements to be in
5 Financing obligations and compliance with
related covenant requirements
Refer notes 8 & 13 to these unconsolidated financial Our audit procedures in relation to verification of long
statements. and short term financing mainly included the following:
• reviewed terms and conditions of financing
At the reporting date, the Company has outstanding
agreements entered into by the Company with
financing facilities (both long and short term)
various banks and financial institutions;
aggregating Rs. 20,321 million which constitutes 69%
of total liabilities of the Company. • obtained direct balance confirmations from banks
and financial institutions and verified outstanding
obligations and certain other information from
such confirmations;
• reviewed maturity analysis of financing to
ascertain the classification of financing as per
their remaining maturities;
54
The Company’s key operating / performance • assessed the status of compliance with
indicators including liquidity, gearing and finance cost financing covenants and also inquired from the
are directly influenced by the additions to the portfolio management with regard to their ability to ensure
of financing. Further, new financing arrangements future compliance with the covenants;
entail additional financial and non-financial covenants
• assessed the adequacy of disclosures made
for the Company to comply with.
in respect of the long and short term financing
/ borrowings in these unconsolidated financial
The significance level of financing facilities obtained
statements; and
along with the sensitivity of compliance with
underlying financing covenants are considered a key • checked on test basis the calculations of finance
area of focus during the audit and therefore, we have cost recognised in the unconsolidated statement
identified this as a key audit matter. of profit or loss.
6 Contingencies
Refer to note 19.1 to these unconsolidated financial Our audit procedures in this area included, amongst
statements. others, the following:
• obtained an understanding of the Company’s
The Company is exposed to different laws, regulations
processes and controls over litigations through
and interpretations thereof and hence, there is a
meeting with the management, review of the
litigation risk.
minutes of the Board of Directors;
Given the nature and amounts involved in such cases • reviewing the correspondence of the Company
and the appellate forums at which these are pending, with the relevant authorities and legal advisors
the ultimate outcome and the resultant accounting in including judgments or orders passed by the
the unconsolidated financial statements is subject to competent authorities;
significant judgement, which can change over time as • obtained and reviewed direct confirmations from
new facts emerge and each legal case progresses. For the Company’s external advisors for their views
such reasons, we have considered the contingencies on the legal position of the Company in relation
as a key audit matter. to the contingent matters;
• involved our internal tax professionals to assess
management’s conclusions on contingent tax
matters; and
• evaluated the adequacy of disclosures made in
respect of these contingencies in accordance
with the applicable accounting and reporting
standards.
Information Other than the Unconsolidated and Consolidated Financial Statements and Auditor’s Report
Thereon
Management is responsible for the other information. The other information comprises the information included in the
annual report for the year ended 30 September 2022, but does not include the consolidated and unconsolidated financial
statements and our auditor’s report thereon.
Our opinion on the unconsolidated financial statements does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the unconsolidated financial statements, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the unconsolidated financial
statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we
are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and Board of Directors for the Unconsolidated Financial Statements
Management is responsible for the preparation and fair presentation of the unconsolidated financial statements in
accordance with the accounting and reporting standards as applicable in Pakistan and the requirements of Companies
Act, 2017(XIX of 2017) and for such internal control as management determines is necessary to enable the preparation of
unconsolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the unconsolidated financial statements, management is responsible for assessing the Company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern
basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic
alternative but to do so.
Board of Directors is responsible for overseeing the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Unconsolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the unconsolidated financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs
as applicable in Pakistan will always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these unconsolidated financial statements.
As part of an audit in accordance with ISAs as applicable in Pakistan, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the unconsolidated financial statements, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that
is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Company’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor’s report to the related disclosures in the unconsolidated
financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based
on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may
cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the unconsolidated financial statements, including
the disclosures, and whether the unconsolidated financial statements represent the underlying transactions and
events in a manner that achieves fair presentation.
We communicate with the Board of Directors regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the board of directors with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear
on our independence, and where applicable, related safeguards.
From the matters communicated with the board of directors, we determine those matters that were of most significance
in the audit of the unconsolidated financial statements of the current period and are therefore the key audit matters. We
describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because
the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
56
Report on Other Legal and Regulatory Requirements
Based on our audit, we further report that in our opinion:
a) proper books of account have been kept by the Company as required by the Companies Act, 2017 (XIX of 2017);
b) the unconsolidated statement of financial position, the unconsolidated statement of profit or loss, the
unconsolidated statement of comprehensive income, the unconsolidated statement of changes in equity and the
unconsolidated statement of cash flows together with the notes thereon have been drawn up in conformity with
the Companies Act, 2017 (XIX of 2017) and are in agreement with the books of account and returns;
c) investments made, expenditure incurred and guarantees extended during the year were for the purpose of the
Company’s business; and
d) zakat deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980) was deducted by the
Company and deposited in the Central Zakat Fund established under section 7 of that Ordinance.
The engagement partner on the audit resulting in this independent auditor’s report is Muhammad Ali Rafique.

UDIN: AR202210098vgdj1rly6

UNCONSOLIDATED STATEMENT OF
FINANCIAL POSITION
Note 2022 2021
Rupees Rupees
EQUITY AND LIABILITIES

SHARE CAPITAL AND RESERVES
Share capital 6 597,766,610 597,766,610

Share premium reserve 7 678,316,928 678,316,928
Accumulated profit 15,628,973,589 13,171,462,931
16,905,057,127 14,447,546,469
NON-CURRENT LIABILITIES

Long term finances - secured 8 6,256,153,949 8,995,865,407
Lease liabilities 9 1,829,057,614 1,313,728,626
Deferred taxation 10 246,261,269 –
Retirement benefits 11 23,650,196 55,987,252
Deferred income - Government grant 12 – 685,215
8,355,123,028 10,366,266,500

CURRENT LIABILITIES
Short term borrowings 13 11,034,338,292 3,015,112,876

Current portion of non-current liabilities 14 3,801,685,517 4,167,790,367
Trade and other payables 15 3,027,697,166 2,199,533,008
Advances from customers 16 2,518,090,144 1,064,373,067
Unclaimed dividend 17 40,640,932 33,748,830
Accrued profit / interest / mark-up 18 812,967,857 251,304,750
21,235,419,908 10,731,862,898
CONTINGENCIES AND COMMITMENTS 19

46,495,600,063 35,545,675,867

The annexed notes from 1 to 52 form an integral part of these unconsolidated financial statements.
Chief Financial Officer
58
As at 30 September 2022
Note 2022 2021

Rupees Rupees
ASSETS

NON-CURRENT ASSETS
Property, plant and equipment 20 19,335,452,013 19,670,791,623

Right-of-use assets 21 1,598,855,840 1,836,163,006
Investment property 22 185,854,012 185,854,012
Intangibles 23 610,690,376 612,730,104
Long term investments 24 1,084,012,500 1,084,012,500
Long term deposits 25 94,827,518 95,186,741
Deferred taxation 10 – 368,027,550
22,909,692,259 23,852,765,536

CURRENT ASSETS
Right-of-use assets 21 730,292,317 43,462,361

Short term investments 24 651,994,491 651,994,491
Lease receivables 26 – 69,633,908
Biological assets 27 2,855,032,666 2,335,200,206
Stores, spare parts and loose tools 28 1,916,458,645 1,381,816,893
Stock-in-trade 29 12,145,780,400 1,880,461,902
Trade receivables 30 3,551,542,437 4,195,841,481
Advances, deposits, prepayments and other receivables 31 1,098,333,227 596,888,246
Advance income tax - net 346,779,028 290,291,164
Cash and bank balances 32 289,694,593 247,319,679
23,585,907,804 11,692,910,331

46,495,600,063 35,545,675,867

PROFIT OR LOSS
For the year ended 30 September 2022
Note 2022 2021
Rupees Rupees
Gross revenue 67,027,986,040 64,908,274,727

Sales tax and commission (8,140,078,189) (8,107,983,165)
Revenue from contracts with customers 33 58,887,907,851 56,800,291,562
Cost of revenue 34 (49,737,503,926) (46,664,715,787)
Gross profit 9,150,403,925 10,135,575,775

Administrative expenses 35 (2,157,610,208) (1,916,766,471)
Selling expenses 36 (50,353,633) (37,568,754)
Other income 37 1,967,634,189 2,210,705,238
Other expenses 38 (393,287,756) (3,692,880,845)
(633,617,408) (3,436,510,832)
Profit from operations 8,516,786,517 6,699,064,943

Finance cost 39 (3,404,137,027) (2,251,743,127)
Profit before taxation 5,112,649,490 4,447,321,816
Taxation 40 (1,162,091,911) 430,974,402
Profit for the year 3,950,557,579 4,878,296,218

Earnings per share - basic and diluted 41 66.09 81.61

Chief Financial Officer Chief Executive Director
60
COMPREHENSIVE INCOME
Note 2022 2021
Rupees Rupees

Other comprehensive income / (loss) - net of tax

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

Remeasurements of retirement benefits 11.4 2,044,186 (4,775,791)
Related deferred tax charge for the year 10.2 (674,581) 1,384,979
1,369,605 (3,390,812)
Total comprehensive income for the year 3,951,927,184 4,874,905,406


CASH FLOWS
Note 2022 2021
Rupees Rupees
CASH FLOWS FROM OPERATING ACTIVITIES

Cash generated from operations 42 1,217,527,324 13,230,049,202

Taxes paid (749,474,963) (1,023,828,532)
Staff retirement benefits paid (270,651,214) (211,411,154)
Interest income received 650,151,154 196,566,019
Long term deposits 359,223 (34,275,044)
Workers’ Profit Participation Fund paid 15.3 (306,335,622) (135,840,655)
Workers’ Welfare Fund paid 15.4 (13,130,011) –
(689,081,433) (1,208,789,366)
Net cash generated from operating activities 528,445,891 12,021,259,836

CASH FLOWS FROM INVESTING ACTIVITIES

Capital expenditure (1,203,800,191) (677,373,652)
Right-of-use assets 657,859,065 1,507,655
Investment made in subsidiaries companies – (760,000)
Proceeds from insurance claim against loss of bagasse & crane by fire 24,541,000 –
Proceeds from disposal of operating fixed assets 138,266,990 94,195,042
Net cash used in investing activities (383,133,136) (582,430,955)

CASH FLOWS FROM FINANCING ACTIVITIES

Long term finances - net (3,094,113,393) (1,992,827,391)
Short term borrowings - net 6,883,802,991 (4,384,760,140)
Financial charges paid as:
- finance cost (2,575,657,251) (2,144,894,240)
- interest on lease liability (260,253,949) (178,103,402)
Principal portion of lease liability paid (697,301,249) (711,193,545)
Dividend paid (1,494,837,415) (194,188)
Net cash used in financing activities 48 (1,238,360,266) (9,411,972,906)
Net (decrease) / increase in cash and cash equivalents (1,093,047,511) 2,026,855,975

Cash and cash equivalents at beginning of the year (1,198,314,704) (3,225,170,679)
Cash and cash equivalents at end of the year (2,291,362,215) (1,198,314,704)

Cash and cash equivalents comprise of the following:

- Cash and bank balances 32 289,694,593 247,319,679
- Running / Morabaha / Karobar / Musharakah finances 13.2 & 13.5 (2,581,056,808) (1,445,634,383)
(2,291,362,215) (1,198,314,704)
62
Reserves
Capital Revenue
Share Accumulated Total Total
Share capital premium profit reserves equity
Rupees Rupees Rupees Rupees Rupees

Balance as at 01 October 2020 597,766,610 678,316,928 8,296,557,525 8,974,874,453 9,572,641,063

Total comprehensive income for the year
Profit for the year – – 4,878,296,218 4,878,296,218 4,878,296,218
Other comprehensive loss for the year – – (3,390,812) (3,390,812) (3,390,812)
– – 4,874,905,406 4,874,905,406 4,874,905,406
Balance as at 30 September 2021 597,766,610 678,316,928 13,171,462,931 13,849,779,859 14,447,546,469


CHANGES IN EQUITY
Profit for the year – – 3,950,557,579 3,950,557,579 3,950,557,579

Other comprehensive income for the year – – 1,369,605 1,369,605 1,369,605
– – 3,951,927,184 3,951,927,184 3,951,927,184
Transactions with owners of the Company
recorded directly in equity

Final cash dividend @ Rs. 10 per share for the year ended
30 September 2021 – – (597,766,610) (597,766,610) (597,766,610)
Interim cash dividend @ Rs. 7.50 per share for the half
year ended 31 March 2022 – – (448,324,958) (448,324,958) (448,324,958)
Interim cash dividend @ Rs. 7.50 per share for the nine
months ended 30 June 2022 – – (448,324,958) (448,324,958) (448,324,958)

– – (1,494,416,526) (1,494,416,526) (1,494,416,526)
Balance as at 30 September 2022 597,766,610 678,316,928 15,628,973,589 16,307,290,517 16,905,057,127
JDW SUGAR MILLS LIMITED

63
NOTES TO THE UNCONSOLIDATED
1. CORPORATE AND GENERAL INFORMATION

1.1 Legal status and operations
JDW Sugar Mills Limited (“the Company”) was incorporated in Pakistan on 31 May 1990 as a private
limited company and was subsequently converted into a public limited company on 24 August 1991.
The shares of the Company are listed on the Pakistan Stock Exchange Limited. The principal activities
of the Company are production and sale of crystalline sugar including its by-products i.e. molasses,
bagasse and mud, generation of electricity and managing corporate farms.
The geographical locations and addresses of the Company’s business units, including production
facilities are as under:
– Head office and registered office: 17 - Abid Majeed Road, Lahore Cantonment, Lahore, Pakistan
– Unit-I: Mauza Shirin, Jamal Din Wali, District Rahim Yar Khan, Punjab
– Unit-II: Machi Goth, Sadiqabad, District Rahim Yar Khan, Punjab
– Unit-III: Village Laluwali, District Ghotki, Sindh
– Corporate farms - Punjab Zone
– Corporate farms - Sindh Zone
The Company has executed Energy Purchase Agreements (“EPA”) on 20 March 2014 for thirty years with
National Transmission & Despatch Company Limited (“NTDC”) through the Central Power Purchasing
Agency (Guarantee) Limited (“(‘CPPA-G’ and also referred to as “the Purchaser’)”) for its Bagasse
Based Co-Generation Power Plants (“Co-Generation Power”) at Unit-II, Sadiqabad, District Rahim Yar
Khan, Punjab and Unit-III, District Ghotki, Sindh.
On February 12, 2021, the Company entered into a Novation Agreement to the EPA with NTDC and
CPPA-G’, whereby, NTDC irrevocably transferred all of its rights, obligations and liabilities under the
Energy Purchase Agreement (‘EPA’) to CPPA-G and thereafter, NTDC ceased to be a party to the EPA,
and CPPA-G became a party to the EPA in place of NTDC. Further, on the same day, the Company
entered into the EPA Amendment Agreement, as referred to note 1.2.
The 26.60 MW power plant at Unit-II achieved Commercial Operations Date (“COD”) on 12 June 2014
while the 26.83 MW power plant at Unit-III achieved COD on 03 October 2014 after completing all
independent testing and certification requirements and commenced supplying renewable electricity to
the national grid. Further, the Company’s Co-Generation Power Plants are the first to materialize under
National Electric Power Regulatory Authority’s (“NEPRA”) upfront bagasse tariff.
1.2 Amendment to the Energy Purchase Agreement (EPA)

The Company in the larger national interest and sustainability of the power sector, voluntarily agreed to
alter its existing contractual arrangements with the CPPA-G for the sale of electricity. In this respect, the
Company entered into a “Master Agreement” and an “EPA Amendment Agreement” (hereinafter referred
to as the ‘Agreements’) on February 12, 2021.
Pursuant to the significant terms of these Agreements, the Company will receive its outstanding receivables
amounting to Rs. 2,041.979 million due from CPPA-G as on November 30, 2020 in two installments.
Accordingly, the Company received Rs. 816.833 million as the 1st installment (40%) on June 04, 2021
and second instalment of 60% of the aforementioned outstanding amount was received on November 29,
2021. These instalments comprised of 1/3rd cash, 1/3rd in the form of tradeable Ijarah Sukuk, and 1/3rd
in the form of tradeable Pakistan Investment Bonds (PIBs). Further, the Company has provided discounts
on insurance, Operations & Maintenance and return on equity in tariff.
Moreover, if the Company operates above the annual 45% plant factor (the “Average PF”) in a year,
the CPPA-G shall pay 100% variable energy payments and 30% of fixed energy payment for energy
dispatched above the Average PF. If below the Average PF, the CPPA-G shall pay monthly energy payment
in accordance with clause 3.1.2 of the EPA Amendment Agreement. Both above arrangement shall remain
effective for every five year period starting from COD, after which a fresh reset shall be done to restart the
new five year period.
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In addition to above, delayed payment rate’ as referred in note 30.2 of these unconsolidated financial
statements has been amended to for all future invoices (a) for the first sixty (60) days, 3MK plus two
percent per annum; (b) for any period thereafter sixty (60) days, 3MK plus four-point five percent per
annum and each calculated for the actual number of days for which the relevant amount remains unpaid.
Further, for all invoices, CPPA-G shall ensure that payments follow the EPA mandated FIFO payment
principle.
Upon the EPA Amendment becoming effective, CPPA-G and the Company shall jointly proceed to file
application for disposal of pending litigation before the Courts in relation to the matter in respect of the
EPA. For details, refer to note 30.2.1.
2. BASIS OF PREPARATION
2.1 Separate financial statements
These unconsolidated financial statements are separate financial statements of the Company in which
investments in subsidiaries and associates have been accounted for at cost less accumulated impairment
losses, if any. Consolidated financial statements of the Company are prepared separately.
The Company has investments in following companies (for details, refer to note 24):
Country of
Name of company incorporation Shareholding
Subsidiaries
- Deharki Sugar Mills (Private) Limited (“DSML”) Pakistan 100%
- Ghotki Power (Private) Limited (“GPL”) Pakistan 100%
- Sadiqabad Power (Private) Limited (“SPL”) Pakistan 100%
- Faruki Pulp Mills Limited (“FPML”) Pakistan 57.67%

Associates
- JDW Power (Private) Limited (“JDWPL”) Pakistan 47.37%
- Kathai-II Hydro (Private) Limited (“KHL”) Pakistan 20%
2.2 Statement of compliance

These unconsolidated financial statements have been prepared in accordance with the accounting and
reporting standards as applicable in Pakistan. The accounting and reporting standards applicable in
Pakistan comprise of:
– International Financial Reporting Standards (IFRSs) issued by the International Accounting Standards
Board (IASB) as notified under the Companies Act, 2017;
– Islamic Financial Accounting Standards (IFASs) issued by the Institute of Chartered Accountants of
Pakistan as notified under the Companies Act, 2017; and
– Provisions of and directives issued under the Companies Act, 2017.
Where provisions of and directives issued under the Companies Act, 2017 differ from the IFRSs or IFASs,
the provisions of and directives issued under the Companies Act, 2017 have been followed.
2.3 Basis of measurement

These unconsolidated financial statements have been prepared under the historical cost convention
except for certain items as disclosed in the relevant accounting policies below.
2.4 Functional and presentation currency

These unconsolidated financial statements are presented in Pakistani Rupees (Rs. / Rupees) which is the
Company’s functional currency. All amounts have been rounded off to the nearest of Rs. / Rupees, unless
otherwise stated.

3. KEY JUDGMENTS AND ESTIMATES

The preparation of these unconsolidated financial statements in conformity with the accounting and reporting
standards as applicable in Pakistan requires management to exercise judgments, make estimates and
assumptions that affect the application of policies and reported amounts of assets, liabilities, income and
expenses.
The estimates and associated assumptions are based on historical experience and various other factors that are
believed to be reasonable under circumstances, and the results of which form the basis for making judgment
about carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may
differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. The revisions to accounting
estimates (if any) are recognised in the period in which the estimate is revised if the revision affects only that
period or in the period of the revision and future periods if the revision affects both current and future periods.
The areas involving a high degree of judgments or complexity, or areas where assumptions and estimates are
significant to these unconsolidated financial statements, are documented in the following accounting policies
and notes, and relate primarily to:
– Useful lives, residual values and depreciation method of operating fixed assets - note 4.1
– Useful lives, residual values and amortization method of intangible assets - note 4.4
– Fair value of biological assets - note 4.6 & 27
– Provision for impairment of inventories - note 4.8
– Current income tax expense, provision for current tax and recognition of deferred tax asset (for carried
forward tax losses and tax credits) - note 4.9
– Obligation of defined benefit obligation - note 4.10 & 11
– Estimation of provisions - note 4.16
– Estimation of contingent liabilities - note 4.17
– Expected credit losses of certain financial assets under IFRS 9 note - 4.19
– Impairment loss of non-financial assets other than inventories and deferred tax assets - note 4.20
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies adopted in the preparation of these financial statements are set out below.
These policies have been consistently applied to all the years presented, unless otherwise stated.
4.1 Property, plant and equipment

Items of property, plant and equipment other than freehold land and capital work in progress are measured
at cost less accumulated depreciation and impairment loss (if any).
Freehold land and capital work in progress are stated at cost less any impairment loss (if any). Cost
comprises purchase price, including import duties and non-refundable purchase taxes, after deducting
trade discounts and rebates, and includes other costs directly attributable to the acquisition or construction,
erection and installation. Cost in relation to certain items in operating fixed assets and capital work-in-
progress, signifies historical cost, borrowing cost (as referred to note 4.13) and exchange differences on
borrowings (if any).
Major stores, spare parts and loose tools held for capital expenditure qualify as property, plant and
equipment when the Company expects to use them for more than one year. Transfers are made to
operating fixed assets category as and when such items are available for use.

Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow to
the Company and the cost of the item can be measured reliably. Major repairs and improvements are
capitalized. All other repair and maintenance costs are charged to the unconsolidated statement of profit
or loss during the year in which they are incurred.
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Depreciation is charged to the unconsolidated statement of profit or loss so as to write off the cost or
carrying amount of assets over their estimated useful lives, using reducing balance method at rates
specified in note 20.1 except that straight-line method is used for assets related to corporate farms
segment. However, sometimes, the future economic benefits embodied in an asset are absorbed in
producing other assets. In this case, the depreciation charge constitutes part of the cost of the other
asset and is included in its carrying amount.
During the year, the management, has revised the estimate in respect of useful life of assets related to
corporate segment keeping in consideration the class of assets and assessed useful life of these assets.
The management believed that the said change in estimate reflect more accurately to the expected pattern
of consumption of the future economic benefits embodied in these assets. The revision was accounted
for prospectively as a change in accounting estimate. Such change in estimate has not significant impact
the financial statements for the year.
Sugarcane roots (bearer plants) are stated at cost less accumulated depreciation and accumulated
impairment losses (if any). Costs capitalized to sugarcane roots include preparing the land, maintaining
a source of seed cane, planting the seed cane and costs related to establishing new area under cane.
Depreciation of bearer plants commences when they are ready for their intended use. Costs incurred for
infilling including block infilling are generally recognized in the unconsolidated statement of profit or loss
unless there is a significant increase in the yield of the sections, in which case such costs are capitalized
and depreciated over the remaining useful life of the respective fields. Depreciation on bearer plants is
recognized so as to write off its cost less residual values over useful lives, using the straight-line method
at rates as specified in note 20.1
Depreciation on additions is charged from the date when the asset is available for use, while no
depreciation is charged when an asset is derecognised upon disposal or when no future economic
benefits are expected from its use or disposal.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying
amount is greater than its estimated recoverable amount as referred in note 4.20
Gains or losses arising on derecognition of an item of operating fixed assets is determined as the
difference between the disposal proceeds and the carrying amount of the assets and are recognised
in the unconsolidated statement of profit or loss within other income or other expenses. The useful lives,
residual values and depreciation method are reviewed on a regular basis. The effect of any changes
in estimate is accounted for on a prospective basis. The Company’s estimate of the residual value of
its operating fixed assets as at 30 September 2022 has not required any adjustment as its impact is
considered insignificant.
4.2 Lease liability and right-of-use asset

4.2.1 The Company is the lessee
At the inception of a contract, the Company assesses whether a contract is, or contains, a lease based
on whether the contract conveys the right to control the use of an identified asset for a period of time in
exchange for consideration. Lease terms are negotiated on an individual basis and contain different terms
and conditions. The Company has lease contracts for agricultural land (for cultivation of sugarcane),
vehicles (for its employees and other business operations) and office buildings (for office operations).
In determining the lease term, management considers all facts and circumstances that create an economic
incentive to exercise an extension option or termination option. The assessment is reviewed if a significant
event or a significant change in circumstances occurs which affects this assessment and that is within the
control of the lessee.
The Company cannot readily determine the interest rate implicit in the lease, therefore, it uses its
incremental borrowing rate (IBR) to measure lease liabilities related to land and building. The Company
estimates the IBR using observable inputs (such as market interest rates) when available and is required
to make certain entity-specific estimates.

Right-of-use assets
The Company recognises right-of-use assets at the commencement date of the lease (i.e., the date the
underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated
depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of
right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and
lease payments made at or before the commencement date less any lease incentives received. Right-of-
use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated
useful lives of the assets, as specified in note 21.
Where the Company expects to obtain ownership of the leased asset at the end of the lease term, the
depreciation is charged over its estimated useful life. The Company also assesses the right-of-use asset
for impairment when such indicators exist.
The Company has elected not to recognize a right-of-use asset and corresponding lease liability for short-
term leases with terms of 12 months or less and leases of low-value assets. Lease payments on these
assets are charged to the unconsolidated statement of profit or loss as incurred.
Lease liabilities
At the commencement date, the Company measures the lease liability at the present value of the lease
payments unpaid at that date, discounted using the interest rate implicit in the lease if that rate is readily
available or the Company’s incremental borrowing rate. Lease payments included in the measurement of
the lease liability are made up of fixed payments (including in-substance fixed), variable payments based
on an index or rate, amounts expected to be payable under a residual value guarantee and payments
arising from options reasonably certain to be exercised.
Subsequent to initial measurement, the liability will be reduced for payments made and increased for
interest. It is remeasured to reflect any reassessment or modification, or if there are changes in in-
substance fixed payments. When the lease liability is remeasured, the corresponding adjustment is
reflected in the right-of-use asset, or profit or loss if the right-of-use asset is already reduced to zero.
4.2.2 The Company is the lessor

As a lessor, the Company classifies its leases as either operating or finance leases.
A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental
to ownership of the underlying asset, and classified as an operating lease if it does not. However, all
leases of the Company are treated as operating leases and payments on operating lease agreements
are recognised as an expense on a straight-line basis over the lease term. Associated costs, such as
maintenance and insurance, are expensed as incurred. Initial direct costs incurred in negotiating and
arranging an operating lease are added to the carrying amount of the leased asset and recognised over
the lease term on the same basis as rental income. Contingent rents are recognised as revenue in the
period in which they are earned. The Company also earns rental income from operating leases of its
investment properties (see note 4.3). Rental income is recognised on a straight-line basis over the term of
the lease.
4.2.3 The Company is the intermediate lessor

When the Company is an intermediate lessor, it accounts for its interests in the head lease and the sub-
lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset
arising from the head lease, not with reference to the underlying asset. If a head lease is a short-term lease
to which the Company applies the exemption as described in note 4.2.1, then it classifies the sub-lease
as an operating lease.
The Company perform assessment regarding operating lease or finance lease at the date of initial
application on the basis of the remaining contractual terms and conditions of the head lease and sublease
at that date.
The Company has sub-leased a land that has been presented as part of a right-of-use asset and
recognised a gain or loss on derecognition of the right-of-use asset pertaining to the land and presented
the gain as part of other income. The Company recognised interest income on lease receivables in the
unconsolidated statement of profit or loss.
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4.3 Investment property
Investment property is property held either to earn rental income and / or for capital appreciation, but
not for sale in ordinary course of business, use in production or supply of goods or services as for
administrative purposes.
The Company’s investment property comprises of land which is carried at cost, including transaction
cost, less identified impairment loss, if any. The Company assesses at each unconsolidated statement of
financial position date whether there is any indication that investment property may be impaired. If such
indication exists, the carrying amount of such assets are reviewed to assess whether they are recorded
in excess of their recoverable amount. Where carrying value exceeds the respective recoverable amount,
assets are written down to their recoverable amounts and the resulting impairment loss is recognized in
the unconsolidated statement of profit or loss for the year. The recoverable amount is the higher of an
asset’s fair value less costs to sell and value-in-use.
Transfers are made to (or from) investment property only when there is a change in use. For a transfer from
investment property to owner-occupied property, the deemed cost for subsequent accounting is the cost
at the date of change in use. If owner-occupied property becomes an investment property, the Company
accounts for such property in accordance with the policy stated under property, plant and equipment up
to the date of change in use.

Investment property is derecognized either when it has been disposed of or when it is permanently
withdrawn from use and no future economic benefit is expected from its disposal. The gain or loss on
derecognition being difference between the net disposal proceeds and the carrying amount of the asset
is recognized in the unconsolidated statement of profit or loss as an income or expense in the period of
derecognition.
4.4 Intangibles
4.4.1 Goodwill
Goodwill is initially measured as at the acquisition date, being the excess of (a) the aggregate of the
consideration transferred, the amount of any non-controlling interest in the acquiree; and (b) the net of the
acquisition date amount of the identifiable assets acquired and the liabilities assumed.
In case the fair value attributable to the Company’s interest in the identifiable net assets exceeds the fair
value of consideration, the Company recognises the resulting gain in the unconsolidated statement of
profit or loss on the acquisition date.
Goodwill acquired in a business combination is measured, subsequent to initial recognition, at cost less
accumulated impairment losses, if any. (for impairment testing, refer to note 4.20).
On disposal of the relevant cash generating unit, the attributable amount of goodwill is included in the
determination of the profit or loss on disposal.
4.4.2 Computer software

Intangible assets acquired separately are initially recognized at cost. After initial recognition, these are
measured at cost less accumulated amortization and accumulated impairment losses. The estimated
useful life and amortization method is reviewed at the end of each annual reporting period, with effect
of any changes in estimate being accounted for on a prospective basis. In addition, they are subject to
impairment testing as described in note 4.20.
Intangible assets with finite useful life are amortized using straight-line method over its useful life as
specified in note 23 to these unconsolidated financial statements. Amortization on additions to intangible
assets is charged from the date when an asset is put to use till the asset is derecognised upon disposal
or when no future economic benefits are expected from its use or disposal. Subsequent expenditure is
capitalized only when it increases the future economic benefits embodied in the specific assets to which
it relates.

When an intangible asset is disposed of, the gain or loss on disposal is determined as the difference
between the proceeds and the carrying amount of the asset, and is recognised in the unconsolidated
statement of profit or loss within other income or other expenses.
4.5 Investments
4.5.1 Investment in equity instruments of subsidiary companies
Investment in subsidiary company is measured at cost in the Company’s separate financial statements, as
per the requirements of IAS-27 “Separate Financial Statements”. However, at subsequent reporting dates,
the Company reviews the carrying amount of the investment and its recoverability to determine whether
there is an indication that such investment has suffered an impairment loss. If any such indication exists,
the carrying amount of the investment is adjusted to the extent of impairment loss. Impairment losses are
recognized as an expense. Where impairment losses subsequently reverse, the carrying amounts of the
investments are increased to the revised recoverable amounts but limited to the extent of initial cost of
investments. A reversal of impairment loss is recognized in unconsolidated statement of profit or loss.
4.5.2 Investments in equity instruments of associated companies

Associates are all entities over which the Company has significant influence but has no control. Investments
in associates are measured at cost less any identified impairment loss if any in the Company’s separate
financial statements. However, at subsequent reporting dates, the Company reviews the carrying amount
of the investment and its recoverability to determine whether there is an indication that such investment
has suffered an impairment loss. If any such indication exists, the carrying amount of the investment is
adjusted to the extent of impairment loss. Impairment losses are recognized as an expense.
4.6 Biological assets

The Company recognises a biological asset or agricultural produce when, and only when the Company
controls the asset as a result of past events; and it is probable that future economic benefits associated
with the asset will flow to the Company, and the fair value or cost of the asset can be measured reliably.

Consumable biological assets, comprising of standing sugarcane and other crops are measured at their
fair value determined by discounting future cash flows from operations over the estimated useful life of the
biological assets using the risk adjusted discount rate. Significant assumptions used are stated in note
27.1 to these unconsolidated financial statements. Fair value is deemed to approximate the cost when
little biological transformation has taken place or the impact of the transformation in price is not expected
to be material.
The sugarcane roots are bearer plants and are therefore presented and accounted for as property, plant
and equipment. However, the standing sugarcane and other crops are accounted for as biological assets
until the point of harvest. Sugarcane and other crops are transferred to inventory at fair value less costs
to sell when harvested. A gain or loss arising on initial recognition of a biological asset at fair value less
costs to sell and from a change in fair value less costs to sell of a biological asset are included in the
unconsolidated statement of profit or loss for the period in which it arises.
Initial and subsequent expenditure incurred for the establishment and conservation of biological assets
are capitalised as costs directly attributable to the biological transformation required to obtain the fair
value at which biological assets are valued.
Management of the Company regularly reviews significant unobservable inputs and valuation adjustments
used to arrive at fair value of biological assets. Any change in those inputs and valuation adjustments
might affect valuation of biological assets and accordingly charge to the unconsolidated statement of
profit or loss.
The Company managed, cultivate, consumed and sold sugarcane crops, while in case of other crops, the
Company engaged in cultivation and sale of wheat, mustard and rice etc.
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4.7 Stores, spare parts and loose tools
These are stated at lower of cost and net realizable value. Cost is determined using the weighted average
method. Items in transit are valued at cost comprising invoice value plus other charges paid thereon.
Cost comprises direct materials, direct labour and an appropriate proportion of variable and fixed overhead
expenditure, that have been incurred in bringing the inventories to their present location and condition.
Estimates and judgements are continually evaluated and adjusted based on historical experience and
other factors, including expectations of future events that are believed to be reasonable under the
circumstances. The Company reviews the stores, spare parts and loose tools for possible impairment on
an annual basis. Any change in estimates in future years might affect the carrying amounts of respective
items of stores, spare parts and loose tools with a corresponding effect on provision.
4.8 Stock-in-trade
These are valued at the lower of weighted average cost and net realizable value except for stock in
transit, which is valued at cost comprising invoice value and related expenses incurred thereon up to the
unconsolidated statement of financial position date.
Cost is determined as follows:

Raw materials Average cost
Work-In-Process & Finished goods Average manufacturing cost
Molasses, Bagasse and Mud - by products Net realizable value
The cost of harvested crops transferred from biological assets to stock-in-trade is its fair value less costs
to sell at the point of harvest.
The Company reviews the carrying amount of stock-in-trade on a regular basis. Carrying amount of stock-
in-trade is adjusted where the net realizable value is below the cost. Net realizable value is the estimated
selling price in the ordinary course of business, less the estimated costs of completion and estimated
costs necessary to make the sale.
4.9 Taxation
Taxation for the year is the tax payable on the current year’s taxable income based on the applicable
income tax rate. Income tax expense comprises current and deferred tax.
4.9.1 Current tax

Income tax
Provision of current tax is based on the taxable income for the year determined in accordance with the
prevailing law for taxation. The charge for current tax is calculated using tax rates (and laws) that have
been enacted or substantially enacted at the reporting date and after taking into account tax credits,
rebates and 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.
However, profits and gains of the Company derived from bagasse based cogeneration power project are
exempt from tax in terms of clause 132C of Part I of the Second Schedule to the Income Tax Ordinance,
2001, subject to the conditions and limitations provided therein. Under clause 11A of Part IV of the Second
Schedule to the Income Tax Ordinance, 2001, the Company is also exempt from levy of minimum tax on
‘turnover’ under section 113 of the Income Tax Ordinance, 2001.
Agriculture tax
According to Section 41 of the Income Tax Ordinance, 2001, agriculture income of the Company is exempt
from tax under Federal Board of Revenue. Provision for current tax is based on the taxable agriculture
income for the year determined in accordance with the Punjab Agriculture Income Tax Act, 1997. The
charge for current tax is calculated using prevailing tax rates.

4.9.2 Deferred tax
Deferred tax is provided in full, using the liability method, on temporary differences arising between the
tax bases of assets and liabilities and their carrying amounts in the unconsolidated financial statements.
However, deferred tax is not recognized for:
– temporary differences on the initial recognition of assets or liabilities in a transaction that is not a
business combination and that affects neither accounting nor taxable profit or loss;
– temporary differences related to investments in subsidiaries, associates and joint arrangements to
the extent that the Company is able to control the timing of the reversal of the temporary differences
and it is probable that they will not reverse in the foreseeable future; and
– taxable temporary differences arising on the initial recognition of goodwill.
Deferred tax assets are recognized for unused tax losses, unused tax credits and deductible temporary
differences to the extent that it is probable that future taxable profits will be available against which they
can be used. Future taxable profits are determined based on the reversal of relevant taxable temporary
differences. If the amount of taxable temporary differences is insufficient to recognize a deferred tax asset
in full, then future taxable profits, adjusted for reversals of existing temporary differences, are considered.
Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer
probable that the related tax benefit will be realized; such reductions are reversed when the probability of
future taxable profits improves.
Unrecognized deferred tax assets are reassessed at each reporting date and recognized to the extent
that it has become probable that future taxable profits will be available against which they can be used.
Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by
the end of the reporting period and are expected to apply when the related deferred tax asset is realised
or the deferred tax liability is settled. In this regard, the effect on deferred taxation of the portion of income
subject to provisions of Section 113 is also considered in accordance with the requirement of Technical
Release - 27 of Institute of Chartered Accountants of Pakistan.
The measurement of deferred tax reflects the tax consequences that would follow from the manner in
which the Company expects, at the reporting date, to recover or settle the carrying amount of its assets
and liabilities.
Deferred tax has been fully provided in these unconsolidated financial statements except profits and gains
of the Company derived from bagasse based cogeneration power which are exempt from tax subject to
the conditions and limitations provided for in terms of clause (132C) of Part I of the Second Schedule
to the Income Tax Ordinance, 2001 because the Company’s management believes that the temporary
differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax
assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax
assets and tax liabilities are offset where the Company has a legally enforceable right to offset and intends
either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
Current and deferred tax is recognised in unconsolidated statement of profit or loss, except to the extent
that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax
is also recognised in other comprehensive income or directly in equity, respectively.
4.9.3 Group taxation

The Company has filed an application dated 08 December 2021 to Securities Exchange Commission of
Pakistan (‘SECP’) for Group Taxation under regulation 8 of the Group Companies Registration Regulation
2008. The above mentioned application has been considered by the SECP dated 27 December 2021 and
issued the designation letter to the Company for Group Taxation for the Group which comprises of the
Company and its wholly owned subsidiary, Deharki Sugar Mills (Pvt.) Limited. Consequently, the Group
will be taxed as one fiscal unit from the tax year 2023 and onwards. Further, as per clause 103A of Part I
and clause 11C of Part IV of the Second Schedule to the Income Tax Ordinance, 2001, any income derived
from inter-corporate dividend and applicability of provision of section 151 of Income Tax Ordinance (‘the
Ordinance’) on inter-corporate profit on debt within the group companies entitled to group taxation under
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section 59AA of the Ordinance, is exempt from tax subject to the condition that return of the Group has
been filed for the tax year.
Current and deferred income taxes are recognised by each entity within the group, regardless of who has
the legal rights for the recovery of tax. However, current tax liability / receivable is shown by the Company
as it has legal obligation / right of recovery of tax upon submission of group annual income tax return.
Balances among the group entities as a result of Group taxation is shown as tax recoverable / payable to
the respective group entity. Any adjustments in the current and deferred taxes of the Company on account
of group taxation are credited or charged to unconsolidated statement of profit or loss in the year in which
they arise.
4.10 Employee benefits

4.10.1 Defined contribution plan
A defined contribution plan is a post-employment benefit plan under which the Company pays fixed
contribution into a separate entity and will have no legal or constructive obligation to pay further amounts.
Obligations for contributions to defined contribution plan is recognized as an employee benefit expense
in the unconsolidated statement of profit or loss when they are due.
The Company operates approved contributory provident fund for its eligible employees. Equal monthly
contribution is made both by the Company and employee to the fund at the rate of 10% of basic salary.
4.10.2 Defined benefit plan

A defined benefit plan provides an amount of gratuity that an employee will receive on or after retirement,
usually dependent on one or more factors such as age, years of service and compensation. A defined
benefit plan is a plan that is not a defined contribution plan. The liability recognized in the unconsolidated
statement of financial position in respect of defined benefit plan is the present value of the defined benefit
obligation at the end of the reporting year less the fair value of plan assets.
The Company operates approved funded gratuity fund covering eligible full time permanent employees
who have completed the minimum qualifying period of service as defined under the fund. The gratuity
fund is managed by the trustees. The calculation of the benefit requires assumptions to be made of future
outcomes, the principal ones being in respect of increase in remuneration and the discount rate used to
convert future cash flows to current values.
The calculation of defined benefit obligation is performed by qualified actuary by using the projected unit
credit method and charge for the year other than on account of experience adjustment is included in the
unconsolidated statement of profit or loss.
Remeasurement of the net defined benefit liability, which comprise actuarial gains and losses, the return
on plan assets (excluding interest) and the effect of asset ceiling (if any, excluding interest), are recognized
immediately in other comprehensive income.
The Company determines the net interest expense (income) on the net defined liability / (asset) for the
year by applying the discount rate used to measure the defined benefit obligation at the beginning of the
annual year to the then - net defined benefit liability / (asset) during the year as a result of contributions
and benefit payments. Net interest expense and other expenses related to defined benefit plans are
recognized in the unconsolidated statement of profit or loss.
4.11 Deferred Government grant

Grant from the government is recognised at their fair value where there is a reasonable assurance that
the grant will be received and the Company will comply with all attached conditions. Government grant
relating to costs is deferred and recognised in the unconsolidated statement of profit or loss over the
period necessary to match them with the costs that they are intended to compensate. Amortization of
deferred grant is presented as reduction of related interest expense.
4.12 Revenue from contracts with customers

4.12.1 Revenue recognition
Revenue is recognised when or as performance obligations are satisfied by transferring control of a
promised goods or service to a customer, and control either transfers over time or at a point in time.
Revenue is measured at fair value of the consideration received or receivable, excluding discounts,

commissions and government levies. Revenue comprises income arising in the course of the Company’s
ordinary activities. The Company is engaged in the sale of crystalline sugar, its by-products, agri inputs,
sale of electricity and agricultural produce.
a) Sale of goods
Revenue from the sale of goods is recognized at the point in time when the performance obligations
arising from the contract with a customer is satisfied and the amount of revenue that it expects to be
entitled to can be determined. This usually occurs when control of the asset is transferred to the customer,
which is when goods are dispatched or delivered to the customer. The normal credit terms for customers
is as per sale order.
Revenue is measured based on the consideration specified in a contract with a customer and excludes
amounts collected on behalf of third parties. Revenue is disclosed net of returns, rebates, discounts and
other allowances.
b) Sale of energy
Revenue from sale of energy is recognized over time as energy is delivered and based on the rates
determined under the mechanism laid down in the EPA. The delivered energy units represent a series
of distinct goods that are substantially the same and have the same pattern of transfer to the customer
as measured using an output method. The amount that the Company has a right to bill the customer
corresponds directly with the value of the completed performance to the customer. As a result, the
Company applies the “right to invoice” practical expedient under IFRS 15 to measure and recognize
revenue.
Invoices are generally raised on a monthly basis and are due after 30 days from acknowledgement by
CPPA-G.
Payments to customers are recorded as a reduction in revenue when the payments relate to the Company’s
performance obligations under the contract (e.g. liquidated damages or penalties).
c) Other income
The Company also generates revenue from following other sources which are enumerated below:
– income on bank deposits is accrued on a time proportion basis by reference to the principal
outstanding and the applicable rate of return;
– foreign currency gains and losses are reported on a net basis;
– rental income arising from investment property and sub-lease (operating lease) is recognized in
accordance with the terms of lease contracts over the lease term on straight-line basis;
– interest income is recognized as and when accrued on effective interest method.
– Upon the EPA Amendment becoming effective, delayed payment mark-up on amounts due under
the EPA is accrued on a time proportion basis. However, before effectiveness of EPA Amendment,
delayed mark-up on due payments by the CPPA-G is recognized only when the Company has fully
received the amount of relevant invoice due;
– Income from sale of scrap is recorded when risks and rewards are transferred to the customers which
coincides with the time of dispatch of items; and
– Other incomes, if any, are accounted when performance obligations are met.
4.12.2 Contract balances

a) Contract liabilities (advances from customers)
A contract liability is the obligation to transfer goods or services to a customer for which the Company
has received consideration (or an amount of consideration is due) from the customer. If a customer pays
consideration before the Company transfers goods or services to the customer, a contract liability is
recognised when the payment is made or the payment is due (whichever is earlier). Contract liabilities are
recognised as revenue when the Company performs under the contract.
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The Company recognises contract liabilities for consideration received in respect of unsatisfied
performance obligations and reports these amounts as advances from customers in the unconsolidated
statement of financial position (refer to note 16).
b) Trade receivables / contract assets

If the Company satisfies a performance obligation before it receives the consideration, the Company
recognises either a contract asset or a trade receivable in its unconsolidated statement of financial position,
depending on whether something other than the passage of time is required before the consideration is
due (refer to note 30).
Trade receivables are amounts due from customers for goods or services that are delivered in the ordinary
course of business. If collection is expected in one year or less, they are classified as current assets. If not,
they are presented as non-current assets.
Trade receivables are recognised initially at the amount of consideration that is unconditional, unless they
contain significant financing components when they are recognised at fair value. They are subsequently
measured at amortised cost using the effective interest method, less loss allowance. Refer note 4.19.6 for
a description of the Company’s impairment policies.
c) Contract cost
The contract cost is the incremental cost that the Company incurs to obtain a contract with customers that
it would not have incurred if the contract had not been obtained. The Company recognized contract cost
as an expense in the unconsolidated statement of profit or loss on a systematic pattern of revenue.
4.13 Borrowing cost

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets,
which are assets that necessarily take a substantial period of time to get ready for their intended use, are
added to the cost of those assets, until such time as the assets are substantially ready for their intended
use. All other borrowing costs are recognized in the unconsolidated statement of profit or loss as incurred.
4.14 Cash and cash equivalents

Cash and cash equivalents in the statement of financial position comprise cash at banks and on hand.
For the purpose of the unconsolidated statement of cash flows, cash and cash equivalents consist of
cash and bank deposits, as defined above, net of outstanding bank running finances /Morabaha/Karobar/
Musharakah finances as they are considered an integral part of the Company’s cash management.
4.15 Trade and other payables

Trade and other payables are obligations to pay for goods or services that have been acquired in
ordinary course of business from suppliers. Trade and other payables are presented as current liabilities
unless payment is not due within twelve months after the reporting period. Trade and other payables are
recognized initially at fair value and subsequently measured at amortised cost using the effective interest
method.
4.16 Provisions
Provisions are recognized when the Company has a present legal or constructive obligation as a result of
past event and it is probable that an outflow of economic benefits will be required to settle the obligation
and a reliable estimate can be made. The Company reviews the status of all pending litigations and
claims against the Company. Based on its judgment and the advice of the legal advisors/consultants for
the estimated financial outcome, an appropriate disclosure or provision is made. The actual outcome of
these litigations and claims can have an effect on the carrying amounts of the liabilities recognized at the
unconsolidated statement of financial position date.
4.17 Contingent liabilities

A contingent liability is disclosed when the Company has a possible obligation as a result of past events,
whose existence will be confirmed only by the occurrence or non-occurrence, of one or more uncertain
future events not wholly within the control of the Company; or the Company has a present legal or
constructive 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.
4.18 Contingent assets

Contingent assets are disclosed when there is a possible asset that arises from past events and whose
existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future
events not wholly within the control of the Company. Contingent assets are not recognised until their
realisation become virtually certain.
4.19 Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability
or equity instrument of another entity.
4.19.1 Recognition and initial measurement

All financial assets and financial liabilities are initially recognized when the Company becomes a party to
the contractual provisions of the instruments.
A financial asset (unless it is a trade receivable without a significant financing component or for which the
Company has applied the practical expedient) or financial liability is initially measured at fair value plus/
less, for an item not at fair value through profit or loss (FVTPL), transaction costs that are directly attributable
to its acquisition or issue. Trade receivables that do not contain a significant financing component or for
which the Company has applied the practical expedient are measured at the transaction price determined
under IFRS 15.
4.19.2 Classification and subsequent measurement

Financial assets
On initial recognition, a financial asset is classified as measured at amortized cost, fair value through
other comprehensive income (FVTOCI), Fair value through Profit or loss (FVTPL) and in case of an equity
instrument it is classified as FVTOCI or FVTPL. Currently, the Company does not have any financial assets
categorised as FVTPL and FVTOCI.
The classification is determined by both:
– the entity’s business model for managing the financial asset, and
– the contractual cash flow characteristics of the financial asset.
Financial assets – Business model assessment

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
associated with the principal amount outstanding during a particular period of time and for other basic
lending risks and costs (e.g. liquidity risk and administrative costs), as well as a profit margin.
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 contains a contractual term that could change the timing or amount of contractual cash flows such
that it would not meet this condition. In making this assessment, the Company considers:
– contingent events that would change the amount or timing of cash flows;
– terms that may adjust the contractual coupon rate, including variable-rate features;
– prepayment and extension features; and
– terms that limit the Company’s claim to cash flows from specified assets (e.g. non-recourse features).
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 the first day of the first reporting period following the change in the business model.
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All revenue and expenses relating to financial assets that are recognised in unconsolidated statement
of profit or loss are presented within finance costs, other income or other financial items, except for
impairment of trade receivables which is presented within other expenses.
4.19.3 Subsequent measurement of financial assets

i) Financial assets at amortized cost (debt instruments)
A financial asset is measured at amortized cost if it meets both of the following conditions and is not
designated as at FVTPL:
– it is held within a business model whose objective is to hold assets to collect contractual cash
flows; and
– its contractual terms give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.
After initial recognition, these are measured at amortised cost using the effective interest method.
Discounting is omitted where the effect of discounting is immaterial.
ii) Financial assets at fair value through OCI (debt instruments)

The Company measures debt instruments at fair value through OCI if both of the following conditions
are met:
– The financial asset is held within a business model with the objective of both holding to collect
contractual cash flows and selling; and
– The contractual terms of the financial asset give rise on specified dates to cash flows that are
solely payments of principal and interest on the principal amount outstanding.
For debt instruments at fair value through OCI, interest income, foreign exchange revaluation and
impairment losses or reversals are recognised in the unconsolidated statement of profit or loss and
computed in the same manner as for financial assets measured at amortised cost. The remaining
fair value changes are recognised in OCI. Upon derecognition, the cumulative fair value change
recognised in OCI is recycled to profit or loss.
iii) Financial assets designated at fair value through OCI (equity instruments)
Upon initial recognition, the Company can elect to classify irrevocably its equity investments as equity
instruments designated at fair value through OCI when they meet the definition of equity under IAS
32 Financial Instruments: Presentation, and are not held for trading. The classification is determined
on an instrument-by-instrument basis.
Gains and losses on these financial assets are never recycled to profit or loss. Dividends are recognised
as other income in the unconsolidated statement of profit or loss when the right of payment has been
established, except when the Company benefits from such proceeds as a recovery of part of the cost
of the financial asset, in which case, such gains are recorded in OCI. Equity instruments designated
at fair value through OCI are not subject to impairment assessment. The Company elected to classify
irrevocably its non-listed equity investments under this category.
iv) Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss are carried in the statement of financial position at
fair value with net changes in fair value recognised in the unconsolidated statement of profit or loss.
This includes derivative instruments and listed equity investments, if any which the Company had not
irrevocably elected to classify at fair value through OCI. Assets in this category are measured at fair
value with gains or losses recognised in the unconsolidated statement of profit or loss. The fair values
of financial assets in this category are determined by reference to active market transactions or using
a valuation technique where no active market exists.

Financial liabilities
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or
loss, and financial liabilities at amortised cost, as appropriate. All financial liabilities are recognised initially
at fair value and, in the case of loans and borrowings and other payables, net of directly attributable
transaction costs. A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a
derivative or it is designated as such on initial recognition.
The Company has not designated any financial liability upon recognition as being at fair value through
profit or loss. Other financial liabilities are subsequently measured at amortized cost using the effective
interest method. Gains and losses are recognised in unconsolidated statement of profit or loss when the
liabilities are derecognised as well as through the EIR amortisation process.
4.19.4 Derecognition
Financial assets
The Company derecognizes a financial asset when the contractual rights to the cash flows from the
financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in
which substantially all of the risks and rewards of ownership of the financial asset are transferred or in
which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and
it does not retain control of the financial asset.
The Company might enter into transactions whereby it transfers assets recognized in its unconsolidated
statement of financial position, but retains either all or substantially all of the risks and rewards of the
transferred assets. In these cases, the transferred assets are not derecognized.
On derecognition of a financial asset measured at amortised cost, the difference between the asset’s
carrying value and the sum of the consideration received and receivable is recognised in the unconsolidated
statement of profit or loss.
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or
expires. When an existing financial liability is replaced by another from the same lender on substantially
different terms, or the terms of an existing liability are substantially modified, such an exchange or
modification is treated as the derecognition of the original liability and the recognition of a new liability.
The difference in the respective carrying amounts is recognised in the unconsolidated statement of profit
or loss.
4.19.5 Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the unconsolidated
statement of financial position only when the Company has a legally enforceable right to set off the
recognized amounts and intends to either settle on a net basis or realize the asset and settle the liability
simultaneously.
4.19.6 Impairment of financial assets

The Company recognises an allowance for expected credit losses (ECLs) for all debt instruments not held
at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows
due in accordance with the contract and all the cash flows that the Company expects to receive. The
shortfall is then discounted at an approximation to the assets’ original effective interest rate.
The Company recognizes loss allowances for ECLs on:
– financial assets measured at amortized cost (debt instruments); and

– trade receivables (including due from Government of Pakistan) and lease receivables
The Company measures loss allowances at an amount equal to lifetime ECLs, except for bank balances,
due from related parties and other financial assets for which credit risk (i.e. the risk of default occurring
over the expected life of the financial instrument) has not increased significantly since initial recognition,
which are measured at 12-month ECLs:
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12-month ECLs are the portion of ECLs that result from default events that are possible within the 12
months after the reporting date (or a shorter period if the expected life of the instrument is less than 12
months).
The Company has elected to measure loss allowances for trade receivables including due from
‘Government of Pakistan’ (see note 4.19.7) and lease receivables using IFRS 9 simplified approach and
has calculated ECLs based on lifetime ECLs. The Company has established a provision matrix that is
based on the Company’s historical credit loss experience, adjusted for forward-looking factors specific to
the trade receivables and lease receivable and the economic environment.
When determining whether the credit risk of a financial asset has increased significantly since initial
recognition and when estimating ECL, the Company considers reasonable and supportable information
that is relevant and available without undue cost or effort. This includes both quantitative and qualitative
information and analysis, based on the Company’s historical experience and informed credit assessment
and including forward-looking information.
The Company assumes that the credit risk on a financial asset has increased significantly if it is more than
past due for a reasonable period of time. Loss allowances for trade receivables and lease receivables
are always measured at an amount equal to lifetime ECLs. Lifetime ECLs are the ECLs that result from all
possible default events over the expected life of a financial instrument. The maximum period considered
when estimating ECLs is the maximum contractual period over which the Company is exposed to credit
risk.
Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying
amount of the assets.
The gross carrying amount of a financial asset is written off when the Company has no reasonable
expectations of recovering of a financial asset in its entirety or a portion thereof. The Company individually
makes an assessment with respect to the timing and amount of write-off based on whether there is
a reasonable expectation of recovery. The Company expects no significant recovery from the amount
written off. However, financial assets that are written off could still be subject to enforcement activities in
order to comply with the Company’s procedures for recovery of amounts due.
The Company reviews the recoverability of its trade receivables, lease receivables, deposits, advances
and other receivables to assess the impairment allowances required on an annual basis. Refer to note
30.3 & 44.1.1 for a detailed analysis of how the impairment requirements of IFRS 9 are applied.
4.19.7 Financial assets due from the Government of Pakistan

Financial assets due from the Government of Pakistan include trade receivables due from CPPA-G
under the EPA that also includes accrued amounts of markup. SECP vide S.R.O. 1177 (I)/2021 dated
13 September 2021 notified a partial exemption, that in respect of companies holding financial assets
due from the Government of Pakistan in respect of circular debt, the requirements contained in “IFRS 9
(Financial Instruments) with respect to application of Expected Credit Losses method” shall be not be
applicable till June 30, 2022, provided that such companies shall follow relevant requirements of IAS
39- Financial Instruments: Recognition and Measurement, in respect of above referred financial assets
during the exemption period. However, subsequent to year end, the Company has applied to the SECP to
further extend the application of Expected Credit Loss model under IFRS-9 for IPPs for 01 July 2022 to 30
September 2027 but no any further exemption has been granted by the SECP.
Accordingly, the Company has adopted a particular requirement (expected credit losses impairment model)
of IFRS 9 ‘Financial Instruments’ from 01 July 2022 in respect of its trade debts due from Government of
Pakistan in respect of circular debt after expiration of exemption period e.g. from initial application of IFRS
9 till 30 June 2022, as granted by SECP vide S.R.O. 1177 (I)/2021 dated 13 September 2021 (for details,
refer to note 4.19.6). For trade receivables due from Government of Pakistan, the Company has opted
to apply simplified approach (that is, to measure the loss allowance at an amount equal to lifetime ECL
at initial recognition and throughout its life), rather than apply the general model. However, adaptation of
such new accounting policy has not significant impact on the amounts reported in the unconsolidated
financial statements (for details, refer to note 44.1.1).
Provision against trade debt due from CPPA-G reported under exemption period
The Company has applied the following policy during exemption period.

A provision for impairment is established when there is objective evidence that the Company will not
be able to collect all the amount due according to the original terms of the receivable. The Company
assesses at the end of each reporting period whether there is objective evidence that the financial asset
is impaired.
The financial asset is impaired and impairment losses are incurred only if there is objective evidence of
impairment as a result of one or more events that occurred after the initial recognition of the asset (a ‘loss
event’) and that loss event (or events) has an impact on the estimated future cash flows of the financial
asset that can be reliably estimated. Evidence of impairment may include indications that the debtor is
experiencing significant financial difficulty, default or delinquency in interest or principal payments, the
probability that they will enter bankruptcy or other financial reorganisation, and where observable data
indicates that there is a measurable decrease in the estimated future cash flows, such as changes in
arrears or economic conditions that correlate with defaults. The amount of the loss is measured as the
difference between the asset’s carrying amount and the present value of estimated future cash flows
(excluding future credit losses that have not been incurred) discounted at the financial asset’s original
effective interest rate. The carrying amount of the asset is reduced and the amount of the loss is recognized
in the unconsolidated statement of profit or loss. When the financial asset is uncollectible, it is written off
against the provision.
Subsequent recoveries of amounts previously written off are credited to the unconsolidated statement of
profit or loss. If, in a subsequent period, the amount of the impairment loss decreases and the decrease
can be related objectively to an event occurring after the impairment was recognized (such as an
improvement in the debtor’s credit rating), the reversal of the previously recognized impairment loss is
recognised in the unconsolidated statement of profit or loss.
4.20 Non - Financial assets

The carrying amount of the Company’s non-financial assets, other than inventories and deferred tax
assets are reviewed at each reporting date to determine whether there is any indication of impairment.
If any such indication exists, then the asset’s recoverable amount is estimated. The recoverable amount
of an asset or cash generating unit is the greater of its value in use and its fair value less cost to sell. In
assessing value 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 cash generating unit
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 unconsolidated statement of profit
or loss. Impairment 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 reporting date for any indications that the loss has decreased or no longer exists.
The management of the Company reviews carrying amounts of its assets including goodwill, long term
investments, receivables and advances and cash generating units for possible impairment and makes
formal estimates of recoverable amount if there is any such indication. In case of goodwill, formal estimates
of recoverable amount is made on an annual basis.
An impairment loss 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 exceed the carrying amount that would have been determined, net of depreciation
and amortization, if no impairment loss had been recognized. A reversal of impairment loss for a cash
generating unit is allocated to the assets of the unit, except for goodwill, pro rata with the carrying amounts
of those assets. The increase in the carrying amounts shall be treated as reversals of impairment losses
for individual assets and recognized in the unconsolidated statement of profit or loss unless the asset is
measured at revalued amount. Any reversal of impairment loss of a revalued asset shall be treated as a
revaluation increase.
4.21 Business combination

Business combinations are accounted for by applying the acquisition method. The cost of acquisition
is measured as the fair value of assets given, equity instruments issued and the liabilities incurred or
assumed at the date of acquisition. The consideration transferred includes the fair value of any asset
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or liability resulting from a contingent consideration arrangement, if any. Acquisition-related costs are
expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a
business combination are measured initially at their fair values at the acquisition date. The excess of the
consideration transferred over the fair value of the identifiable net assets acquired is recorded as goodwill
(for details, refer to note 4.4.1). If this is less than the fair value of the net assets acquired in the case of a
bargain purchase, the difference is charged directly in the unconsolidated statement of profit or loss.
4.22 Foreign currency transactions

Transactions in foreign currencies are translated to the respective functional currencies of the Company
at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign
currencies at the reporting date are retranslated to the functional currency at the exchange rate at the
reporting date. The foreign currency gain or loss on monetary items is the difference between amortized
cost in the functional currency at the beginning of the year, adjusted for effective interest and payments
during the year, and the amortized cost in foreign currency translated at the exchange rate at the end of
the year.
Non-monetary assets and liabilities that are measured at fair value in a foreign currency are retranslated to
the functional currency at the exchange rate at the date that the fair value was determined. Non-monetary
items that are measured based on historical cost in a foreign currency are not translated again at the
reporting date.
Foreign currency differences arising on retranslation are generally recognized in the unconsolidated
4.23 Dividend
Dividend to ordinary shareholders is recognized as a deduction from accumulated profit in the
unconsolidated statement of changes in equity and as a liability in the Company’s unconsolidated
statement of financial position in the year in which it is declared by the Board of Directors.
4.24 Earnings per share (EPS)

Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company
by weighted average number of ordinary shares outstanding during the year. Diluted EPS is calculated by
adjusting basic EPS with weighted average number of ordinary shares that would be issued on conversion
of all dilutive potential ordinary shares into ordinary shares and post-tax effect of changes in profit or loss
attributable to ordinary shareholders of the Company that would result from conversion of all dilutive
potential ordinary shares into ordinary shares.
5. NEW STANDARDS, AMENDMENTS TO APPROVED ACCOUNTING STANDARDS AND NEW INTERPRETATIONS

The following amendments to existing standards have been published that are applicable to the Company’s
financial statements covering annual periods, beginning on or after the following dates:
5.1 Standards, interpretations and amendments to published approved accounting standards that
are effective during the current year
Certain standards, amendments and interpretations to IFRSs are effective for accounting periods
beginning on October 01, 2021 but are considered not to be relevant or to have any significant effect on
the Company’s operations (although they may affect the accounting for future transactions and events)
and are, therefore, not detailed in these financial statements.
5.2 Standards, amendments and interpretations to existing standards that are not yet effective
and have not been early adopted by the Company
The following Standards and amendments to published approved accounting standards that are effective
for accounting periods, beginning on or after the date mentioned against each to them:

Effective for
the period beginning
on or after
IAS-8 Accounting Policies, changes in Accounting Estimates and Errors January 01, 2023
(Amendment regarding the definition of accounting estimates)
IAS-1 Presentation of Financial Statements & Accounting Policies – January 01, 2023
Amendments regarding the classification of liabilities
IAS-12 Income Taxes (The amendments to narrow the scope of the initial January 01, 2023
recognition exemption)
Effective for
on or after
IAS-16 Property, Plant and Equipment – Amendments prohibiting a company January 01, 2022
from deducting from the cost of property, plant and equipment amounts
received from selling items produced while the company is preparing
the asset for its intended use
IAS-37 Provisions, Contingent Liabilities and Contingent Assets – Amendments January 01, 2022
regarding the costs to include when assessing whether a contract is
onerous
IFRS-10 Consolidated Financial Statements and IAS 28 - Investment in Associates Not yet finalised
and Joint Ventures (Amendment regarding sale or contribution of assets
between an investor and its associate or Joint Venture).
IFRS-3 Business Combinations – Amendments updating a reference to the January 01, 2022
Conceptual Framework
IFRS-4 Insurance Contracts – Amendments regarding the expiry date of the January 01, 2023
deferral approach
IAS-41 Agriculture – Amendments resulting from Annual Improvements to IFRS January 01, 2022
Standards 2018–2020 (taxation in fair value measurements)
IFRS-1 First-time Adoption of International Financial Reporting Standards – January 01, 2022
Amendments resulting from Annual Improvements to IFRS Standards
2018–2020 (subsidiary as a first-time adopter)
IFRS-9 Financial Instruments – Amendments resulting from Annual January 01, 2022
Improvements to IFRS Standards 2018–2020 (fees in the ‘10 per cent’
test for de-recognition of financial liabilities)
IFRS-16 Leases – Amendments resulting from Annual Improvements to IFRS January 01, 2022
Standards 2018–2020 (Lease incentives)
The above amendments and improvements are not expected to have any material impact on the Company’s
financial statements in the period of initial application.
5.3 New Standards issued by IASB but not yet been notified / adopted by SECP
Following new standards issued by IASB but not yet been notified / adopted by SECP:
Effective for
on or after
IFRS – 1 First Time Adoption of IFRS July 01, 2009
IFRS – 17 Insurance Contracts January 01, 2023
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Further, the above new standards have been issued by IASB which are yet to be notified by the SECP
for the purpose of applicability in Pakistan and are not expected to have any material impact on the
Company’s financial statements in the period of initial application.
5.4 Waiver from application of IFRS 16 “Leases”

The Securities and Exchange Commission of Pakistan (SECP) through S.R.O. 24 (I) / 2012 dated January
16, 2012, as modified by S.R.O. 986 (I) / 2019 dated September 02, 2019, granted exemption from the
application of IFRS 16 ‘Leases’ to all companies, which have entered into power purchase agreements
before January 01, 2019. However, SECP made it mandatory to disclose the impact of the application
of IFRS 16 on the Company’s financial statements. The Company’s arrangement with CPPA-G covered
under respective EPAs and consequently are exempt under the aforesaid S.R.O. Under IFRS-16 Leases,
the consideration required to be made by lessees CPPA-(G) for the right to use the asset would have been
accounted for as finance lease. The Company’s power plant’s control due to purchase of total output by
CPPA-G appears to fall under the scope of finance lease under IFRS 16. Further, comparative information
has been restated of below disclosure due to error in applying IFRS 16. Consequently, if the Company
were to follow IFRS 16 with respect to its EPA, the effect on the unconsolidated financial statements would
be as given below:
2022 2021
Rupees Rupees
De-recognition of property, plant and equipment (3,919,193,645) (4,132,209,168)
Recognition of lease receivables 17,187,586,969 17,802,340,090
Increase in un-appropriated profit at beginning of the year 13,670,130,922 9,902,089,301

(Decrease)/increase in profit for the year (401,737,598) 3,768,041,621
Increase in un-appropriated profit at end of the year 13,268,393,324 13,670,130,922
2022 2021
Rupees Rupees
6. SHARE CAPITAL
6.1 Authorized share capital
75,000,000 (2021: 75,000,000) voting ordinary
shares of Rs. 10 each 750,000,000 750,000,000
25,000,000 (2021: 25,000,000) preference
shares of Rs. 10 each 250,000,000 250,000,000
1,000,000,000 1,000,000,000

6.2 Issued, subscribed and paid up share capital
32,145,725 (2021: 32,145,725) voting ordinary
shares of Rs. 10 each fully paid in cash 321,457,250 321,457,250
27,630,936 (2021: 27,630,936) voting bonus shares
of Rs. 10 each fully paid 276,309,360 276,309,360
597,766,610 597,766,610

6.2.1 Mr. Jahangir Khan Tareen, an Executive Director (2021: Executive Director) holds 9,269,012 (2021:
9,552,293) and Makhdoom Syed Ahmad Mahmud, a Non-Executive Director (2021: Non-Executive
Director) holds 17,547,213 (2021: 16,493,932) ordinary shares of Rs. 10 each representing 15.51%
(2021: 15.98%) and 29.35% (2021: 27.59%) of the paid up capital of the Company respectively.
6.2.2 The shareholders are entitled to receive all distributions including dividends and other entitlements in
the form of bonus and right shares as and when declared by the Company. All shares carry one vote
per share without restriction. The Company does not pay dividend until certain financial requirements of
lenders are satisfied.
7. SHARE PREMIUM RESERVE

This reserve can be utilized by the Company only for the purposes specified in section 81(2) and 81(3) of the
Companies Act, 2017.
Note 2022 2021

Rupees Rupees
8. LONG TERM FINANCES - SECURED
Mark-up bearing finances from conventional
banks / financial institutions 8.1.1 8,794,166,670 11,552,789,191
Islamic mode of financing 8.1.2 520,435,905 832,538,469
8.1 & 8.3 9,314,602,575 12,385,327,660
Less: Transaction cost
As at 01 October (34,755,446) (41,318,166)
Amortization of transaction cost 39 & 42 6,562,720 6,562,720
As at 30 September (28,192,726) (34,755,446)
9,286,409,849 12,350,572,214
Current maturity presented under current liabilities:
banks / financial institutions (2,780,653,333) (3,042,604,239)
Islamic mode of financing (249,602,567) (312,102,568)
14 (3,030,255,900) (3,354,706,807)
6,256,153,949 8,995,865,407
84
8.1 Long term finances - secured
Mark-up / Year Principal Principal
Loan Grace
Interest Limit of loan outstanding outstanding
duration period
basis maturity 2022 2021
Rupees Years Years Rupees Rupees

8.1.1 Mark-up bearing finances from conventional banks/ financial institutions

The Bank of Punjab – Led Syndicate
The Bank of Punjab *3mk + 1.10 2,036,641,666 06 Years – 2027 1,832,977,501 1,991,428,221
National Bank of Pakistan 3mk + 1.10 1,225,000,000 06 Years – 2027 1,102,500,000 1,197,805,000
Askari Bank Limited 3mk + 1.10 975,000,000 06 Years – 2027 877,500,000 953,355,000
MCB Bank Limited 3mk + 1.10 816,666,667 06 Years – 2027 735,000,001 798,536,667
Dubai Islamic Bank Limited 3mk + 1.10 816,666,667 06 Years – 2027 735,000,001 798,536,667
Pak Kuwait Investment Company (Pvt.) Limited 3mk + 1.10 612,500,000 06 Years – 2027 551,250,000 598,902,500
MCB Islamic Bank Limited 3mk + 1.10 612,525,000 06 Years – 2027 551,272,498 598,926,944
Askari Bank Limited (Islamic) 3mk + 1.10 255,000,000 06 Years – 2027 229,500,000 249,339,000
7,350,000,000 6,615,000,001 7,186,829,999
Conventional banks/ financial institutions
Allied Bank Limited (II) 3mk + 0.50 1,000,000,000 1.5 Years 01 Year 2023 1,000,000,000 –
Pak Libya Holding Company Limited (II) 3mk + 1.00 450,000,000 05 Years 0.5 Year 2026 350,000,000 450,000,000
Pak Brunei Investment Company Limited 3mk + 1.00 500,000,000 06 Years 01 Year 2025 300,000,000 400,000,000
Askari Bank Limited (IV) 3mk + 1.25 500,000,000 04 Years 0.25 Year 2024 266,666,669 400,000,001
Soneri Bank Limited (II) 3mk + 1.00 500,000,000 05 Years 01 Year 2023 125,000,000 250,000,000
Pak Oman Investment Company Limited (II) 3mk + 1.00 500,000,000 06 Years 01 Year 2023 75,000,000 175,000,000
Habib Bank Limited 6mk + 1.00 500,000,000 05 Years 01 Year 2022 62,500,000 187,500,000
Soneri Bank Limited (I) 3mk + 1.00 195,000,000 05 Years – 2022 – 60,000,000
Habib Bank Limited – SBP Refinance
Scheme (note 8.2) **SBP Rate + 1.50 1,000,000,000 2.5 Years 0.5 year 2022 – 560,129,192
MCB Bank Limited (II) 3mk + 1.00 2,000,000,000 03 Years 0.5 year 2023 – 1,400,000,000
Allied Bank Limited (I) 3mk + 0.50 1,000,000,000 1.5 Years – 2021 – 333,329,999
Standard Chartered Bank (Pakistan) Limited 3mk + 1.00 1,000,000,000 05 Years – 2022 – 150,000,000
9,145,000,000 2,179,166,669 4,365,959,192
16,495,000,000 8,794,166,670 11,552,789,191
8.1.2 Islamic mode of financing
Bank Islami Pakistan Limited 3mk + 1.25 250,000,000 05 Years 01 Year 2026 218,750,000 250,000,000
National Bank of Pakistan (II) 3mk + 1.00 250,000,000 05 Years 01 Year 2024 177,083,338 239,583,334
Bank Alfalah Limited 3mk + 0.90 500,000,000 05 Years 01 Year 2023 124,602,567 249,205,135
Dubai Islamic Bank (Pakistan) Limited (II) 3mk + 1.00 500,000,000 05 Years 01 Year 2022 – 93,750,000
1,500,000,000 520,435,905 832,538,469
17,995,000,000 9,314,602,575 12,385,327,660
* 3 mk i.e. 3 months KIBOR
** SBP rate i.e. 0%
8.2 The Company had obtained borrowing under Refinance Scheme for payment of Wages & Salaries
by the State Bank of Pakistan (SBP) at subsidized rate in different tranches on various dates starting
from June 2020, earmarked from running and cash finance limit, which was repayable in 8 quarterly
installments to commercial banks under the SBP Refinance Scheme. This loan was recognized and
measured in accordance with IFRS 9 ‘Financial Instruments’. Fair value adjustment had been measured
as difference between subsidized rate i.e. 0% KIBOR plus 150 bps per annum and prevailing market
rate i.e. three months KIBOR plus 150 bps per annum which had been recognised as Government
grant in accordance with IAS 20 “Accounting for Government Grants and Disclosure of Government
Assistance” (see note 12 to these unconsolidated financial statements) and had been amortised to
interest income in line with the recognition of interest expense the grant was compensating. The grant
was conditional subject to fulfillment of certain conditions as defined in the SBP Refinance Scheme. This
loan has been fully repaid during the year.

8.3 Long term finances are secured against ranking / joint parri passu charge over all present and future
fixed assets including land, building and plant and machinery of the Company amounting to Rs. 20,268
million (2021: Rs. 20,374 million) and personal guarantees of sponsor Directors of the Company.
Note 2022 2021

Rupees Rupees
9. LEASE LIABILITIES
Balance as at 01 October 2,104,109,093 1,460,474,747
Additions / modifications of lease 1,314,109,525 1,405,892,658
Impact of early termination (172,416,416) (41,641,412)
Impact of remeasurment of lease liabilities 51,986,278 (9,423,355)
Finance cost regarding lease arrangement 39 260,253,949 178,103,402
Lease payments (957,555,198) (889,296,947)
9.1 & 9.2 2,600,487,231 2,104,109,093
Less: Current maturity presented under current liabilities 14 (771,429,617) (790,380,467)
Balance as at 30 September 1,829,057,614 1,313,728,626

9.1 This includes lease obligation against lease of land for Rs. 7.876 million (2021: Rs. 15.102 million)
towards Deharki Sugar Mills (Private) Limited, a wholly owned subsidiary of the Company.

9.2 This includes Rs. 398.707 million and Rs. 13.531 million (2021: Rs. 398.526 million and Rs. 26.991
million) outstanding under Diminishing Musharakah financing arrangement and conventional banks
respectively.

9.3 Implicit borrowing rate against lease liabilities towards financial institutions / conventional banks is six
month KIBOR plus 100 to 110 bps per annum (2021: six month KIBOR plus 100 to 110 bps per annum).
These are secured against charge on the leased assets and security deposits (for details, refer to note
21 & 25). Further, the Company has provided Demand Promissory Note in favour of the Diminishing
Musharakah financing arrangement as security of outstanding due.

9.4 The maturity analysis of lease liabilities is presented in note 44.1.2 to these unconsolidated financial
statements.

9.5 The incremental borrowing rate applied to lease liabilities related to land and building ranging from
9.70% to 15.87% (2021: 8.65% to 14.9%). There are no variable lease payments in lease contracts.
There were no lease with residual value guarantee.

9.6 At 30 September 2022, the Company had committed to leases for vehicles which had not yet
commenced. The total expected future cash outflows for such leases are Rs. 16 million (2021: Rs. 27.4
million).
86
Note 2022 2021
Rupees Rupees
10. DEFERRED TAXATION
Deferred tax liability on taxable temporary differences
arising in respect of:
- accelerated tax depreciation on operating fixed assets 3,251,158,496 2,871,733,322
- right-of-use assets 664,176,775 468,519,362
3,915,335,271 3,340,252,684
Deferred tax asset on deductible temporary differences
- lease liabilities against right-of-use assets (744,764,480) (527,507,973)
- provisions for doubtful debts and obsolescence (31,101,719) (63,777,818)
- provision for Workers’ Profit Participation Fund (80,474,103) (61,680,978)
- provision for Workers’ Welfare Fund (16,269,609) (16,280,581)
- tax losses – (186,624,114)
- staff retirement benefits (14,299,857) (19,969,633)
- tax credits (1,811,398,038) (2,139,697,529)
(2,698,307,806) (3,015,538,626)
- Unrecognized deferred tax liability related to
operating fixed assets of bagasse based Co-Generation 4.9.2 (970,766,196) (692,741,608)
10.2 246,261,269 (368,027,550)

10.1 Under the Finance Act, 2019, corporate rate of tax has been fixed at 29% for tax year 2020 and onwards.
Further, during the year, an amendment made to Income Tax Ordinance, 2001 through Finance Act, 2022.
In accordance with the such amendment, super tax at the rate of 4% for tax year 2023 and onwards has
been levied on high earning persons in addition to the corporate tax rate of 29%. Accordingly, deferred
tax assets and liabilities have been recognised using the expected applicable rate of 33% (2021: 29%).
Note 2022 2021

Rupees Rupees
10.2 Movement in deferred tax balances is as follows:
As at 01 October (368,027,550) 994,001,202
Recognized in statement of profit or loss:
- accelerated tax depreciation on operating fixed assets 101,400,586 (750,282,743)
- provisions for doubtful debts and obsolescence 32,676,099 1,894,128
- provision for Workers’ Welfare Fund 10,972 (2,909,909)
- staff retirement benefits 4,995,195 14,188,756
- tax losses 186,624,114 94,583,221
- origination and reversal of tax credits 328,299,491 (709,481,532)
40 613,614,238 (1,360,643,773)
Recognized in other comprehensive income:
- staff retirement benefits 674,581 (1,384,979)
10 246,261,269 (368,027,550)

11. RETIREMENT BENEFITS

The latest actuarial valuation of the Company’s defined benefit plan was conducted on 30 September 2022 using
projected unit credit method. Details of obligation for defined benefit plan are as follows:
Note 2022 2021

Rupees Rupees
11.1 Unconsolidated statement of financial position
Present value of defined benefit obligation 11.2 282,100,806 240,194,734
Fair value of plan assets 11.3 (258,450,610) (184,207,482)
Net liability at end of the year 23,650,196 55,987,252

11.2 Movement in liability for funded defined
benefit obligation

Present value of defined benefit obligation
at beginning of the year 240,194,734 189,817,372
Current service cost for the year 25,956,103 20,868,916
Interest cost for the year 24,386,767 17,481,891
Benefits paid during the year (10,921,818) (17,956,826)
Past service cost – 25,454,105
Remeasurement on obligation 2,485,020 4,529,276
at end of the year 11.1 282,100,806 240,194,734
11.3 Movement in fair value of plan assets

Balance at beginning of the year 184,207,482 85,201,349
Return on plan assets excluding interest income 21,854,410 12,534,635
Contributions made during the year 58,781,330 104,674,839
Remeasurement on plan assets 4,529,206 (246,515)
Fair value of plan assets at end of the year 11.1 258,450,610 184,207,482

11.4 Charge for the year
Unconsolidated statement of profit or loss:
Current service cost 25,956,103 20,868,916
Return on plan assets excluding interest income (21,854,410) (12,534,635)
28,488,460 51,270,277
Other comprehensive income:
Remeasurement on plan assets (4,529,206) 246,515
(2,044,186) 4,775,791
26,444,274 56,046,068
11.5 Movement in experience losses
Opening experience losses – –
Experience losses 2,044,186 (4,775,791)
Charge to other comprehensive income (2,044,186) 4,775,791
Closing experience losses – –
88
2022 2021
Break up of plan assets Rupees % Rupees %
Mutual funds 57,077,277 22% 50,672,665 28%
Term Deposit Receipts 110,472,397 43% 110,520,765 60%
Term Finance Certificates 31,440,296 12% – 0%
Cash at bank 59,460,640 23% 23,014,052 12%
258,450,610 100% 184,207,482 100%

11.6 Risks on account of defined benefit plan
The Company faces the following risks on account of defined benefit plan:

Final salary risk - The most common type of retirement benefit is one where the benefit is linked with
final salary. The risk arises when the actual increases are higher than expectation and impacts the
liability accordingly.

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

Investment risk - The risk arises when the actual performance of the investments is lower than
expectation and thus creating a shortfall in the funding objectives.
Withdrawal risks – The risk of higher or lower withdrawal experience than assumed. The final effect
could go either way depending on the beneficiaries’ service/age distribution and the benefit.
11.7 Expected future contribution

Expected future contribution for the year ending 30 September 2023 is Rs. 30.711 million (2022: Rs.
26.246 million).
11.8 Actuarial assumptions sensitivity analysis

The below sensitivity analysis of the defined benefit obligation to the significant actuarial assumptions
has been performed using the same calculation techniques as applied for calculation of defined benefit
obligation reported in these unconsolidated statement of financial position. If the significant actuarial
assumptions used to estimate the defined benefit obligation at the reporting date, had fluctuated by
100 bps with all other variables held constant, the impact on the present value of the defined benefit
obligation as at 30 September 2022 and 2021 would have been as follows:

Impact on defined benefit obligation
2022 2021
Change Increase Decrease Increase Decrease
Rupees
Discount rate 100 BPS (23,355,229) 26,921,458 (19,484,759) 22,824,367
Salary growth rate 100 BPS 26,083,843 (23,055,602) 22,016,306 (19,152,247)

If longevity increases by 1 year, the resultant increase in obligation is insignificant.

Although the analysis does not take account of the full distribution of cash flows expected under the
plan, it does provide an approximation of the sensitivity of the assumptions shown.


2022 2021
11.9 Principal actuarial assumptions used
Valuation discount rate 13.25% 10.50%
Salary increase rate 13.25% 10.50%
Expected return on plan assets 13.25% 10.50%
Retirement assumption 60 years 60 years
Weighted average duration of obligation 9 year 8.8 year
Mortality rate SLIC 2001 - 2005 SLIC 2001 - 2005
Withdrawal rate Moderate Moderate
2022 2021
Rupees Rupees
11.10 Maturity profile
1 - 5 years 178,617,636 97,416,889
6 - 10 years 143,312,839 119,242,326
11 - above years 1,276,937,097 701,367,483

Note 2022 2021
Rupees Rupees
12. DEFERRED INCOME - GOVERNMENT GRANT
Balance as at 01 October 23,388,308 63,389,822
Recognized during the year 8.2 – 7,765,698
Amortized during the year 39 (23,388,308) (47,767,213)
– 23,388,308
Less: Current maturity presented
under current liabilities 14 – (22,703,093)
Balance as at 30 September – 685,215

Note 2022 2021
Rupees Rupees
13. SHORT TERM BORROWINGS
Mark-up based borrowings from conventional
banks - secured
- Cash finances 13.1 5,965,974,626 499,908,687
- Running finances 13.2 2,581,056,808 1,220,634,383
- Finance against trust receipts 13.3 229,447,425 69,569,806
8,776,478,859 1,790,112,876
Islamic mode of financing - secured
- Salam / Istisna / Musawamah / Tijarah finances 13.4 2,257,859,433 –
- Morabaha / Karobar/ Musharakah finances 13.5 – 225,000,000
2,257,859,433 225,000,000
Borrowings from related party - unsecured
- Deharki Sugar Mills (Private) Limited 13.6 – 1,000,000,000
11,034,338,292 3,015,112,876

13.1 The Company has availed cash finance facilities from various banks aggregated to Rs. 10,950 million
(2021: Rs. 9,200 million). The mark-up rates applicable during the year ranges from one to three months
KIBOR plus 50 to 100 bps per annum (2021: one to three months KIBOR plus 50 to 125 bps per annum)
on utilized limits. These facilities are secured against pledge charge over white refined sugar bags at
15% to 25% margin and personal guarantees of all directors of the Company.

90
13.2 The Company has obtained running finance facilities aggregating to Rs. 2,771 million (2021: Rs. 1,771
million). The mark-up rates applicable during the year ranges from one to three months KIBOR plus 75
to 100 bps per annum (2021: one to three months KIBOR plus 75 to 100 bps per annum). These are
secured against ranking charge / joint pari passu charge over all present and future current assets,
excluding pledge stock, of the Company and personal guarantees of the all Directors of the Company.
13.3 The limit of finance against trust receipt facility is Rs. 380 million (2021: Rs. 380 million). It carries mark-
up ranging from one to six months KIBOR plus 100 bps per annum (2021: one to six months KIBOR plus
100 bps per annum). These are secured against ranking charge / joint pari passu charge over present
and future current assets, excluding pledge stock, of the Company and personal guarantees of the
sponsor Directors of the Company.
13.4 The Company has obtained Salam / Istisna / Musawamah / Tijarah financing facilities from various
banks aggregating to Rs. 8,384 million (2021: Rs. 6,510 million). The mark-up rates applicable during
the year ranging from three to six months KIBOR plus 50 to 100 bps per annum (2021: three to six
months KIBOR plus 50 to 100 bps per annum). These facilities are secured against pledge charge over
white refined sugar bags at 10% to 25% margin and personal guarantees of sponsor Directors of the
Company.
13.5 The Company has availed Morabaha / Karobar / Musharakah finance facilities aggregated to Rs. Nil
(2021: Rs. 225 million). The mark-up rates applicable during the year ranges from three to six month
KIBOR plus 100 bps per annum (2021: three to one year KIBOR plus 75 to 100 bps per annum). These
are secured against ranking charge / joint pari passu charge over present and future current assets,
excluding pledge stock, of the Company and personal guarantees of the sponsor Directors of the
Company.
13.6 During the year, the Company has entered into agreements with the Deharki Sugar Mills (Private) Limited,
a wholly owned subsidiary, to obtain and provide the short term advance/loan up to aggregate amount
to Rs. 2.5 billion and Rs. 3 billion (2021: Rs. 3 billion and Rs. Nil), for period of one year respectively.
Mark up is payable and receivable on quarterly basis at the average borrowing rate of the respective
lender ranging from 8.78 % to 11.48 % per annum (2021: 8.26 % to 8.57 %) and 11.46 % to 15.95 %
(2021: Nil) per annum respectively.
13.7 The available facilities for opening letters of credit and guarantee as on the reporting date aggregate to
Rs. 1,650 million (2021: Rs. 1,550 million) which includes Rs. 380 million (2021: Rs. 250 million) sub-limit
of FATR facility. Further, facilities of amounting Rs. 100 million (2021: Rs. 300 million) remain unutilized
as on reporting date. These are secured against ranking charge / joint pari passu charge over present
and future current assets, excluding pledge stock, of the Company and by lien over import documents,
and personal guarantees of the sponsor Directors of the Company.
13.8 Credit facilities as mentioned in note 13.2, 13.3, 13.5 and 13.7 are secured by an aggregate amount of
Rs. 4,113 million (2021: Rs. 6,773 million ) as at reporting date.

Note 2022 2021
Rupees Rupees
14. CURRENT PORTION OF NON-CURRENT LIABILITIES
Lease liabilities 9 771,429,617 790,380,467
Deferred income - Government grant 12 – 22,703,093
3,801,685,517 4,167,790,367

Note 2022 2021
Rupees Rupees
15. TRADE AND OTHER PAYABLES
Trade and other creditors 15.1 1,366,768,539 1,032,234,146
Sales tax payable 723,449,810 337,672,323
Accrued expenses 15.2 137,560,464 97,732,546
Payable to Workers’ Profit Participation Fund 15.3 270,956,575 234,729,641
Payable to Workers’ Welfare Fund 15.4 54,779,827 61,956,458
Due to related party 15.5 207,329,562 222,234,228
Tax deducted at source 107,162,592 37,399,165
Payable to Employees’ Provident Fund 24,497,471 20,008,055
Retention money 6,520,212 6,433,802
Agriculture Income Tax payable 2,144,987 1,267,574
Other payables 15.6 126,527,127 147,865,070
3,027,697,166 2,199,533,008

15.1 Payable to growers against purchase of sugarcane was Rs. Nil as at 30 September 2022 (2021: Rs. Nil).

15.2 This includes Rs. 97.63 million (2021: Rs. 60.78 million) in respect of market committee fee (for details,
refer to note 19.1.23).
Note 2022 2021

Rupees Rupees
15.3 Payable to Workers’ Profit Participation Fund
- allocation for the year 38 & 42 270,956,575 234,729,641
- interest on funds utilized 39 71,605,981 5,800,911
577,292,197 370,570,296
Paid during the year (306,335,622) (135,840,655)
Balance as at 30 September 15.3.1 270,956,575 234,729,641

15.3.1 The interest on funds utilized by the Company is charged higher of interest at the rate of 2.5% above
the bank interest rate or 75 % of the rate at which dividend is declared by the Company as prescribed
under the Companies Profit (Workers Participation) Act, 1968 till the date of distribution of funds to the
workers.
Note 2022 2021

Rupees Rupees
15.4 Payable to Workers’ Welfare Fund
Allocation for the year 38 & 42 35,525,427 12,541,355
Reversal of prior year provision 37 (29,572,047) –
67,909,838 61,956,458
Paid during the year (13,130,011) –
Balance as at 30 September 54,779,827 61,956,458

15.4.1 Under section 9.2(a) of the EPA, payments for Workers’ Welfare Fund and Workers’ Profit Participation
Fund are recoverable from CPPA-G as a pass through item in relation to Co-Generation Power Plants
only.
15.5 This represents payable to Deharki Sugar Mills (Private) Limited, a wholly own subsidiary, in respect of
purchase of bagasse.
92
15.6 These mainly represents deduction from employees against vehicles as per the Company’s finance
car scheme. This includes deposits for Rs. 1.168 million (2021: Rs. 0.844 million) taken from the key
management personnel of the Company.

16. ADVANCES FROM CUSTOMERS
The advances from customers primarily relate to the advance consideration received from customers for sale of
sugar and molasses, for which revenue is recognised at point in time when goods are transferred. Information
regarding the timing of satisfaction of performance obligations underlying the closing contract liability is not
presented since the expected duration of all the contracts entered into with the customers is less than one year.

17. UNCLAIMED DIVIDEND
As at the reporting date, the Company is in the process of complying with the provisions of Section 244 of the
2022 2021
Rupees Rupees
18. ACCRUED PROFIT / INTEREST / MARK-UP
Mark-up on financing / borrowings from conventional
banks / financial institutions:
- Long term finances - secured 299,176,709 193,356,781
- Short term borrowings - secured 290,977,837 45,996,038
590,154,546 239,352,819
Profit on Islamic mode of financing:
222,813,311 11,951,931
812,967,857 251,304,750

19. CONTINGENCIES AND COMMITMENTS
19.1 Contingencies
19.1.1 The tax department issued a show cause notice to the Company on 09 April 2013 on the grounds that
the Company has charged Federal Excise duty at the rate of 0.5% instead of 8% on local supplies made
and raised a demand of Rs. 50.68 million. Consequently, the Company filed a writ petition against this
notice in the Honorable Lahore High Court (“Court”) on the basis that the rate of 0.5% has been charged
as allowed by the FBR vide SRO 77(I)/2013 dated 07 February 2013. The Honorable Lahore High
Court decided the matter in favour of the Company by declaring the afore-mentioned SRO illegal vide
order dated 22 November 2013. The Federal Board of Revenue has filed an intra-court appeal against
the order dated 22 November 2013 before Lahore High Court which is still pending for adjudication.
Management of the Company expects a favorable outcome in this case.

19.1.2 The Company was selected for audit u/s 177 of Income Tax Ordinance, 2001 (“I.T.O”) for Tax year
2008. Assistant Commissioner of Inland Revenue (“ACIR”) passed an order u/s 122(5) / 122(1) of I.T.O
by making additions on different issues i.e. interest expense, salaries, sale, gain on sale of assets etc.,
amounting to Rs. 516 million by reducing brought forward losses. The Company has filed an appeal
before Commissioner Inland Revenue (Appeals) (“CIR(A)”), who vide order dated 06 April 2010 decided
appeal in favor of the Company on most of the issues. The department filed an appeal before Appellate
Tribunal Inland Revenue (“ATIR”). Respectable ATIR passed an order in favor of the Company except
for two issues with an aggregate amount of Rs. 72.57 million. The Company has filed an appeal before
Honorable Lahore High Court (LHC), against the order of the ATIR. The management of the Company
is confident that this case will be decided in its favor.


19.1.3 The Company (Previously United Sugar Mills Limited) was selected for audit u/s 177 of I.T.O for Tax
year 2008. The Company has filed Writ Petition (WP) before LHC against selection of audit which was
rejected by the LHC. Income tax department initiated audit proceeding and Deputy Commissioner
Inland Revenue (“DCIR”) passed an order u/s 122(4)/(5) of I.T.O by making additions on different issues
and created a demand of Rs. 76.56 million vide order dated 22-12-2017. The Company filed an appeal
before CIR(A), who passed ex-parte order against the Company. The Company has filed second appeal
before (“ATIR”). Appeal was heard and matter has been remanded back for denovo consideration. The
management of the Company is confident that this case will be decided in its favor.

19.1.4 Additional Commissioner Inland Revenue (“ACIR”) issued show cause notice u/s 122(5A) of I.T.O for tax
year 2011 confronting several matters. The said notice was duly complied and plea of the Company was
largely accepted by the tax department. ACIR passed order u/s 122(5A) of I.T.O by making additions on
different issues and created a demand of Rs. 18.75 million vide order dated 30-06-2017. The Company
filed an appeal before CIR(A). The CIR(A) has decided the case majorly in the favour of the Company
vide order no. 45-A/V dated 22-02-2021. The Federal Board of Revenue (FBR) has filed appeal before
(“ATIR”) against the CIR(A) order which is still pending for adjudication. The management of the
Company is confident that this case will be decided in its favor.

19.1.5 The Company was selected for audit u/s 177 of I.T.O for tax year 2014. DCIR passed an order u/s 122(1)
of I.T.O by making additions on different expenses, amounting to Rs. 163.16 million. The Company
has filed an appeal before CIR(A) who vide order dated 07-03-2018 accepted the tax payer contention
and has granted relief on major issues amounting Rs. 127.03 million and upheld the remaining issues
amounting to Rs. 36.15 million. The Company has filed second appeal before ATIR against the issues.
The hearing of the same is pending. The management of the Company is confident that this case will
be decided in its favor.

19.1.6 The Company was selected for audit u/s 72B of Sale Tax Act, 1990 (the Act) for the period from June
2013 to July 2014 by the Federal Board of Revenue (‘the FBR’). A sales tax demand was raised by
the tax department on various grounds of Rs. 70.94 million. The Company has filed an appeal before
CIR(A) who vide its order dated 08-02-2018 has granted relief amounting Rs. 57.37 million and the
remaining issues with an aggregate amount of Rs. 12.62 million were upheld. The Company has filed
second appeal before ATIR. The hearing of the same is pending. The management of the Company is
confident that this case will be decided in its favor.

19.1.7 The Company was selected for audit u/s 214C of I.T.O for tax year 2016. ACIR passed an order u/s
122(4) / 122(5) of I.T.O by making additions on different issues amounting to Rs. 506 million by reducing
brought forward losses. The Company has filed an appeal before CIR(A) who granted relief for an
amount of Rs. 30.88 million vide order no. 12/A-V dated 08 April 2021. The Company has filed second
appeal before appellate tribunal (“ATIR”) against the above mentioned order which is pending for
adjudication. The management of the Company is confident that this case will be decided in its favor.

19.1.8 The Company has filed W.P 67473/2020 & 65212/2019 before LHC challenging the amendment inserted
vide Finance Act, 2019 whereby tax credit under section 65B of I.T.O has been reduced from 10% to
5% for the tax year 2019 and period for availing this credit has also been restricted till 30 June 2019.
The Company has claimed tax credit at the rate of 10% for the year ended 30 September 2018 and 30
September 2019 amounting to Rs. 254.9 million and Rs. 94.34 million respectively. Now the matter is
pending before the LHC. The management of the Company expects a favorable outcome in this case.

19.1.9 A show-cause notice u/s 122(5) of I.T.O was served by DCIR for tax year 2015 confronting bank credits
to the Company. The said notice duly complied and the plea of the Company was accepted to some
extent in the order dated 15-06-2021. As a result, demand amounting to Rs. 1,555 million was created
on account of unexplained bank credits. The Company has filed an appeal before CIR (A). The CIR (A)
remanded back the case to learned DCIR for reassessment and affording proper time to the Company.
94
The Company has filed second appeal before ATIR against above mentioned order of CIR (A). The ATIR
adjudicated the appeal vide ITA. No. 799/LB/2022 dated 19-05-2022 by remanding back the case to
assessing officer for denovo consideration. The Company has filed reference before LHC against ATIR
order. The reference has been admitted and operation of impugned order dated 19-05-2022 has been
suspended. Now the matter is pending before the LHC. The management of the Company expects a
favorable outcome.

19.1.10 A show-cause notice u/s 122(5A)/122(9) of I.T.O was served by Additional CIR for tax year 2015 to the
Company confronting several matters. The notice was duly complied and the plea of the Company was
largely accepted in the order dated 02-07-2021. As a result, demand for Rs. 258.8 million was created
on account of proration of expenses and advances from customers. The Company has filed an appeal
before CIR (A). The CIR (A) has granted relief on allocation of expenses amounting to Rs. 6.9 million
only and upheld the advances from customers amounting to Rs. 687.4 million. The Company has filed
second appeal before ATIR on advances from customers against CIR (A) order, which is still pending.
The management of the Company expects a favorable outcome.

19.1.11 A show cause notice under Sale Tax Act, 1990 was served to the Company confronting matter of
inadmissible input sale tax. The said notice was duly complied and plea of the Company was rejected
and a demand of Rs. 19.7 million was created through order dated 09-09-2020. The Company, being
aggrieved, has filed an appeal before CIR (A) who in its order having no. 16/A-V dated 30-04-2021
upheld the decision of DCIR. The Company, being aggrieved, filed second appeal before ATIR who vide
order STA No. 853/LB/2021 dated 25-05-2022 decided the case in favour of the Company. The Federal
Board of Revenue, has filed a sales tax reference before Honorable Lahore High Court challenging the
afore-mentioned order of ATIR. The hearing of the same is pending.

19.1.12 A show cause notice u/s 11(2) of Sale Tax Act, 1990 (the Act) was served to the Company confronting
matter of inadmissible input sale tax for period October 2016 to December 2016. The said notice was
duly complied and plea of the Company was accepted to some extent and a demand of Rs. 13.3 million
was created through order dated August 31, 2021. The Company has filed an appeal before CIR (A).
The CIR (A) adjudicated the matter by deleting tax demand of Rs. 9.47 million and remanded back the
input disallowance of Rs. 1.9 million and confirmed the disallowance amounting to Rs. 1.88 million.
The Company has filed second appeal before ATIR against CIR (A) order which is still pending. The
management of the Company expects a favorable outcome.

19.1.13 A show cause notice u/s 11(2) of Sale Tax Act, 1990 (the Act) was served to the Company confronting
matter of inadmissible input sale tax for period Jan 2017 to March 2017. The said notice was duly
complied and plea of the Company was accepted to some extent and a demand of Rs. 21.86 million
was created through order dated August 31, 2021. The Company has filed an appeal before CIR (A).
The CIR (A) adjudicated the matter by allowing relief of Rs. 1.1 million and remanded back the input
disallowance upto Rs. 17.12 million and confirmed the disallowance amounting Rs. 3.63 million. The
Company has filed second appeal against order of CIR (A) before ATIR which is still pending. The
management of the Company expects a favorable outcome.

19.1.14 A show cause notice u/s 11(3) of Sale Tax Act, 1990 was served to the Company confronting matter
of suppression of sales. The said notice was duly complied and plea of the Company was rejected
and a demand of Rs. 845.52 million was created vide order dated July 10, 2020. The Company, being
aggrieved, has filed appeal before CIR (A), who vide order No. 02/A-V, dated December 15, 2020
remanded back the case. Thus, tax payable has become nil. The Company and the tax department
both has challenged the decision of CIR (A) in ATIR. The hearing of the appeal is still pending. However,
the management of the Company expects a favorable outcome.


19.1.15 A show-cause notice u/s 8 of Sale Tax Act, 1990 (the Act) dated 16-02-2022 was served by ACIR to the
Company on account of claim of input tax of Rs. 83.85 million for the period July-2021 to November-2021.
The ACIR has finalized the proceeding vide its order no. 19473 dated May 12, 2022 by disallowing input
tax of Rs. 19.52 million & imposing penalty of Rs. 0.975 million. The Company has filed an appeal before
CIR (A) against the order of ACIR. The CIR (A) adjudicated the appeal by confirming the disallowance
and penalty imposed by ACIR. The Company has filed second appeal against order of CIR (A) before
ATIR which is pending. The management of the Company expects a favorable outcome.

19.1.16 A show-cause notice u/s 73(4) Sale Tax Act, 1990 (the Act) dated 14-02-2022 was issued by ACIR to the
Company on account of claim of inadmissible input tax amounting to Rs. 11.614 million for the period
July-2020 to November-2021. The ACIR finalized the proceeding vide his order no. 18484 dated April 25,
2022 by confirming the said disallowance. The Company has filed an appeal before CIR (A) against the
order of ACIR. The CIR (A) adjudicated the appeal by deleting the disallowance upto Rs. 0.950 million
and confirmed the disallowance amount of Rs. 10.66 million. The Company has filed second appeal
against order of CIR (A) before ATIR challenging the vires of section 73(4) which is pending. It may be
noted that constitutionality of the section 73(4) of the Act has already been challenged in the LHC who
also granted interim relief in cases where order has not been passed. The management of the Company
expects a favorable outcome.

19.1.17 The DCIR has passed an order dated 28-06-2019 by making additions amounting to Rs. 41.1 million for
Tax Year 2016. The Company has filed an appeal before CIR(A) against the said order. The CIR(A) has
confirmed the additions made by DCIR vide order dated 24-10-2022. The Company has filed second
appeal before appellate tribunal (“”ATIR””) against the above mentioned order which is pending for
adjudication. The management of the Company expects a favorable outcome.
19.1.18 The Company has filed Writ Petition before the Honorable Lahore High Court challenging the ultra vires
of section 4C of the Income Tax Ordinance, 2001. The Honorable Lahore High Court has granted interim
relief in the afore-mentioned petition till the final decision of Court. The financial impact of Super Tax u/s
4C of the Income Tax Ordinance, 2001 amounting to Rs. 132.6 million for Tax Year 2022 has not been
recognized in these unconsolidated financial statements.

19.1.19 The Ministry of Interior (GoP) had constituted the Inquiry Commission under the Pakistan Commission
of Inquiry Act, 2017 dated 16 March 2020 to probe into the increase in sugar prices in the country. The
Commission of Inquiry selected 10 units of sugar mills including 3 units of the Company, accordingly
report of the Inquiry Commission has been issued dated 21 May 2020. The Commission of Inquiry in its
report has highlighted discrepancies with respect to Benami Transactions (Prohibition) Act, 2017 with
respect to the standard business practice of Pakistan sugar industry. The Commission of inquiry has
revealed that names of the brokers may be masked, by the sugar mills, and there is risk of sales in benami
/ fictitious names. The Commission of Inquiry in its report has also highlighted discrepancies in crushing
capacity of the Company (refer to note 47) and claimed that such enhancement and enlargement was
made in the period of ban on capacity enhancement/enlargement (Show cause notices have already
been issued by the Directorate of Industries, Punjab for both Units I and II of the Company way back in
2014 and matter is still pending). In addition to above, Pakistan Sugar Mills Association (PSMA) along
with its member sugar mills, including the Company, filed writ petition 1544/2020 before the Honorable
Islamabad High Court (IHC) challenging the initiation of inquiry, Constitution of the Commission Inquiry
and all action taken pursuant thereto. Vide short order dated 20 June 2020, this above petition was
disposed off and the commission’s report upheld. PSMA along with its member sugar mills, including
the Company, challenged the order before the Division Bench of IHC in Intra Court Appeal (ICA) No. 156
of 2020. This ICA was dismissed on 18 August 2020. Thereafter, on 26 October 2020, PSMA and the
Company filed Civil Petition for to Leave to Appeal (CPLA) No. 2697 of 2020 against the judgment dated
18 August 2020 before the Honorable Supreme Court of Pakistan. The Company has a good prima facie
case.

96
19.1.20 A petitioner has filed Constitution Petition (CP) No. 3823 of 2018 in the Honorable High Court of Sindh
against the Company (Unit III at Ghotki) along with other sugar mills dated 15 May 2018 for withdrawal/
cancellation/refunding of the cash freight subsidy on sugar export approved by the Cabinet Economic
Coordination Committee and additional cash freight subsidy approved by the Sindh Cabinet. The matter
is pending adjudication.
19.1.21 The matter of fixation of minimum price of sugarcane fixed under relevant notifications for crushing
season 2014 - 2015 and 2017-2018 issued by the Government of Sindh was challenged by sugar mills
including Unit III of the Company before the Honorable High Court of Sindh (the Honorable Court).
During the proceedings, an interim arrangement was reached out between the parties whereby price of
Rs. 172 was fixed out of which Rs. 160 were to be paid by the Mills and Rs. 12 were to be paid by the
Government. The said arrangement was subject to the final outcome in the decision of the Honorable
Supreme Court of Pakistan in Appeals. The management of the Company believes that the matter
will ultimately be decided in favor of the Company. Furthermore, the Company along with other sugar
mills have also filed petition in the Honorable Supreme Court challenging the minimum price fixation
mechanism, which is also pending before the Honorable Supreme Court.

19.1.22 A petitioner has filed civil suit no. 1296 of 2005 in the Honorable Sindh High Court against the Company
who has claimed a sum of Rs. 446 million and entitlement to retain the possession of and run the Unit II
unless the dues of the plaintiff have been fully paid. The matter is pending adjudication.

19.1.23 The Secretary and Administrator of the Market Committee (MC) issued notices to Units I and II of the
Company demanding arrears on account of market fee for crushing season 2016-2017 to 2018-2019
amounting to Rs. 16.45 million. The Company has filed an appeal before the Director Agriculture (E&M)
against such notices which is pending adjudication.
Further, the Company was in a Constitutional Writ Petition challenging notification No. DIR (FB) XV-
II8I-VIII dated 02 August 2017 issued by the Govt of the Punjab whereby market committee fee was
enhanced for purchase of sugarcane from 50 paisa to 1 rupee per 100 kg and for Sugar & molasses
from 1 rupee to 2 rupees per 100 kg vide order dated 18.12.2020, the said writ petition was referred to
the Secretary Agriculture for deciding the grievance in the light of new legal framework. However, the
Secretary Agriculture, Govt. of Pakistan via order dated 07 July 2021 concluded that said notification
is valid from its issuance and demanded Rs. 76.8 million. The Company has filed an W.P. 55108/2021
against above order and notification. The High Court of Lahore has restrained the authorities from taking
any coercive measures. The case is currently pending adjudication. (for details, refer to note 15.2).

19.1.24 Federal Investigation Agency (FIA) has registered various cases revolving around issues like Money
Laundering and collusion against accused from within the Company for misappropriation of public
holder money. The allegations, however, were so weak that till to date, FIA officials after complete and
thorough investigation failed to incriminate the accused due to deficient evidence and also have not
submitted report. As per legal counsel of the Company, it would be a disservicing to the Company to
make an assessment of financial loss that could be incurred, in any.
19.1.25 The Company has filed a WP 59553/2021 against Federation of Pakistan in the Honorable Lahore
High Court and challenging the lifting of sugar from the mill at ex-mill price as determined Rs. 84.75/
kg through SRO. 1259(I)2021 dated 21 September 2021. However, such Writ Petition has disposed
off vide order dated 29 September 2021 and concluded that benefit shall be extended to consumers
for any excess amount charged as per above mentioned SRO and appellate Committee Order dated
07 October 2021. However, the Company has filed intra court appeal 61698/2021 and WP 63011 &
61692/2021 in the Honorable Lahore High Court against such order and notification. The Company has
also file C.P.L.A 2050/2021 in the Honorable Supreme Court of Pakistan against above mentioned order
and notices. The matter is pending adjudication.


19.1.26 Employee Old Age Benefits Institution (EOBI) issued show cause notices to the Company demanding
an amount of Rs. 7,084,800 and Rs. 5,313,600 in respect of employees of Unit-I & Unit-II respectively for
the period October, 2015 to September, 2016. Further, the Adjudicating Authority passed an order dated
08 December 2020 against the Company and directed to recover the demanded amount immediately.
The Company has filed appeal against such order. The matter is pending adjudication. Further, during
the year, Adjudicating Authority, Lahore issued assessment order and demand notice to the Company
demanding an amount of Rs. 12,038,176 in respect of employees of Unit III for the period July, 2018 to
June, 2020. The Company has filed complaint before Adjudicating Authority, Lahore for setting aside of
impugned assessment order and impugned demand notices. The matter is pending adjudication.

19.1.27 The Honorable Sindh High Court passed an order in C.P. no. D-1313/2013 dated 12 February 2018,
according to which, in the case of trans-provincial companies, the companies are required to pay
Workers’ Profit Participation Fund (WPPF) under the Sindh Companies Profits (Workers’ Participation
Act), 2015. Sindh Revenue Board (SRB) vide the impugned judgment issued notice to the Company for
the non payment of WPPF as per the impugned judgment. The Company has filed an C.P.L.A 954/2018
against this order in the Honorable Supreme Court and impugned judgment of the Honorable Sindh
High Court has been suspended. However, allocation for the year has been recognized in accordance
with provision of the Companies Profit (Workers’ Participation) Act, 1968 (for details, refer to note
15.3).

19.1.28 The Company received various show cause notices from the Sindh Revenue Board (SRB) demanding
payment of Sindh Workers’ Welfare Fund for the period 2015 to 2017 for Rs. 116 million. The Company
has challenged the said notice through C.P. 7956/2019 in High Court of Sindh on the ground that
after the 18th Amendment, SRB and Federation of Pakistan, both can only collect Workers’ Welfare
Fund (WWF) from the Company after a law is enacted catering to WWF collection from trans-provincial
organizations. Further, Supreme Court of Pakistan, in CA. No. 1583 of 2014 has held that exclusive
jurisdiction rested with the Parliament and Federation of Pakistan in respect of labour matters of trans-
provincial organizations. The Federation of Pakistan and the Province of Sindh along with SRB have
been made parties in the said matter. The Company’s legal counsel is of the view that the Company,
being a trans-provincial organization, has a good chance of success. However, provision for the year
has been recognized in accordance with the Workers Welfare Fund Ordinance, 1971 (for details, refer
to note 15.4).

19.1.29 The Company has filed an appeal No. 55, 56 & 57 of 2022 before the Competition Appellate Tribunal
against the order dated 13 August 2021 of the Competition Commission of Pakistan (‘’CCP’’) in which
a penalty of Rs. 8,237.78 million was imposed on the Company. However, Appellate Tribunal has
restrained the CCP from adopting any coercive measures against the Company for recovery of the fine
in its order dated 02 June 2022. The appeal is pending adjudication.

The Company also challenged the order dated 13 August 2021 before the Lahore High Court in Writ
Petition No. 64858 of 2021 titled the Company vs Federation of Pakistan etc. The operation of said order
has been suspended and CCP has been restrained from recovering the penalty imposed in terms of an
order of the Lahore High Court dated 18 October 2021. The matter is pending adjudication before the
Lahore High Court.

19.1.30 As at 30 September 2022, several cases were filed against the Company before various court of laws
relating to claims and settlements of dues, etc., the amount of which cannot be determined. The
management, based on the opinion of the legal counsel expects that the outcome of all these cases
will be in favour of the Company, as they have a reasonable defense in the cases filed. Accordingly, no
provision has been made in these unconsolidated financial statements.

98
Based on the opinion of the Company’s legal advisors, management is expecting a favorable outcome
of the above cases from 19.1.18 to 19.1.26 and 19.1.29. Therefore, no provision has been recognized
in these unconsolidated financial statements.

19.1.31 Guarantees issued by the banks on behalf of the Company in favour of various parties as at the reporting
date aggregate amounts to Rs. 799 million (2021: Rs. 758 million).

19.1.32 The Company has availed growers financing facilities from various banks aggregated to Rs. 2,021
million (2021: Rs. 1,315 million). The mark-up rates applicable during the year ranges from one year
KIBOR plus 240 to 250 bps per annum (2021: one year KIBOR plus 240 to 250 bps per annum). The
Company has provided counter guarantees to various banks against growers financing facilities as at
the reporting date amounts to Rs. 3,145 million (2021: Rs. 2,520 million) and personal guarantees of
sponsor directors of the Company (for details, refer to note 30.1).

19.1.33 Guarantees issued by the banks on behalf of the Company in favor of Sadiqabad Power (Private)
Limited and Ghotki Power (Private) Limited, wholly owned subsidiary companies, as at the reporting
date aggregate amounts to Rs. Nil (2021: Rs. 38 million).

19.1.34 The Company has issued cross corporate guarantees of Rs. 944 million (2021: Rs. 751.3 million) on
behalf of Deharki Sugar Mills (Private) Limited - wholly owned subsidiary, to secure the obligations of
subsidiary company towards their lenders.
Note 2022 2021

Rupees Rupees
19.2 Commitments

19.2.1 Letters of credit for import of machinery
and its related components 19.2.1.1 404,899,443 201,323,470

19.2.1.1
It includes shipping guarantee amounting to Rs. nil (2021: Rs. 8.812 million).

19.2.2 Commitments in respect of operation and maintenance cost of Co - Generation Power Plants contracted
for but not incurred as at 30 September 2022 amounts to Rs. Nil (2021: Rs. 115.33 million).
Note 2022 2021

Rupees Rupees
20. PROPERTY, PLANT AND EQUIPMENT
Operating fixed assets 20.1 19,068,801,186 19,522,518,881
Capital work in progress 20.2 196,702,905 60,266,380
Stores, spare parts and loose tools held for
capital expenditure 20.3 69,947,922 88,006,362
19,335,452,013 19,670,791,623

100
20.1 Operating fixed assets
Reconciliation of ending balances by classes of assets is as follows:
20.1.1

Cost Depreciation
Carrying
As at Additions / Transfers / As at As at Transfers / reclassification As at amount as at
01 October (deletions) reclassification 30 September Rate / Life 01 October For the / (deletions) 30 September 30 September
2021 during the year during the year 2022 2021 year during the year 2022 2022
Rupees Rupees Rupees Rupees % / Year Rupees Rupees Rupees Rupees Rupees
Owned
FINANCIAL
Freehold land 1,729,658,247 - - 1,729,658,247 - - - - - 1,729,658,247
Factory building on freehold land 2,292,797,850 - (1,060,000) 2,291,737,850 10% 1,281,155,562 101,114,543 (563,145) 1,381,706,960 910,030,890
Non-factory building on freehold land 833,290,595 13,907,082 (44,619,735) 802,577,942 5% - 5/20 years 364,195,595 22,736,730 (10,139,808) 376,792,517 425,785,425

Plant and machinery 22,525,456,883 117,929,854 (56,086,750) 22,584,554,696 5% - 5/10 years 7,676,195,911 766,980,440 (39,190,785) 8,402,143,055 14,182,411,641
(2,745,291) (1,842,511)
Sugarcane roots 776,236,276 651,405,712 - 1,061,299,933 3 years 274,848,701 302,772,325 - 330,681,596 730,618,337
(366,342,055) - (246,939,430)
STATEMENTS
Motor vehicles 1,896,038,972 187,330,771 102,115,913 2,018,791,744 20% - 5 years 1,663,649,036 90,670,951 60,376,380 1,683,730,577 335,061,167
(166,693,912) - (130,965,790)
Electrical installation 174,808,018 4,397,826 11,200,736 189,287,469 10% - 10 years 93,284,487 9,539,109 5,625,003 107,648,274 81,639,195
(1,119,111) (800,325)
Office equipment 73,189,228 3,515,653 (11,938,844) 64,212,205 20% - 5 years 56,080,012 3,286,503 (9,103,596) 49,792,829 14,419,376
(553,832) (470,090)
Tools and equipment 78,480,510 2,926,242 (722,426) 80,684,326 10% 38,699,346 4,109,399 (320,371) 42,488,374 38,195,952
Furniture and fixture 28,693,025 738,732 (12,669,557) 16,523,371 10% - 10 years 16,221,243 1,191,937 (6,529,918) 10,670,520 5,852,851
(238,829) (212,742)
Weighbridge 40,223,357 - 1,226,011 41,449,368 10% - 10 years 25,529,080 1,592,029 960,377 28,081,486 13,367,882
- - -
Cost Depreciation
Carrying
Roads and boundary wall 95,300,302 - 44,390,410 139,690,712 10% - 5 years 62,698,401 8,782,112 10,109,085 81,589,598 58,101,114
- - - -
Arms and ammunitions 8,237,117 - 72,348 8,309,465 10% - 10 years 5,886,898 235,022 72,348 6,194,268 2,115,197
- - - -
Fire fighting equipment 82,815,232 - 2,535,355 85,350,587 20% 65,779,405 3,758,518 778,591 70,316,514 15,034,073
- - -
Aircrafts 902,022,925 59,754,736 - 961,777,661 10% 412,811,389 53,245,340 - 466,056,729 495,720,932
- - -
Tube well 8,607,613 - 50,441,119 59,048,732 10% - 5 years 5,459,526 3,249,254 38,706,035 47,414,815 11,633,917
- - -
Computers 79,393,189 4,676,535 13,967,820 91,990,574 33% - 3 years 60,235,866 8,892,188 9,233,248 72,835,584 19,154,990
(6,046,970) (5,525,718)
31,625,249,339 1,046,583,143 98,852,400 32,226,944,882 12,102,730,458 1,382,156,400 60,013,444 13,158,143,696 19,068,801,186
(543,740,000) (386,756,606)
20.1.2 Additions in operating fixed assets included transfer from capital work in progress and stores, spare parts and loose tools held for capital expenditure amounting to Rs.
739.038 million (2021: Rs. 517.34 million) and Rs. 28.9 million (2021: Rs. 60.92 million) respectively.

20.1.3 Transfers to motor vehicles represents transfer of vehicles from right-of-use assets at carrying value amounting to Rs. 38.8 million (2021: Rs. 14.11 million).

20.1.4 Property, plant and equipment of the Company are kept secured with the banks under ranking and joint pari passu charge, for obtaining long term financing. This charge
will exist till 31 January 2027. For details, refer to note 8.

20.1.5 Operating fixed assets having carrying amount Rs. 78 (2021: Rs. 78) as at 30 September 2022 have been retired from active use and not classified as held for sale in
accordance with IFRS 5.

101
102
20.1.6 Reconciliation of beginning balances by classes of assets is as follows:
Cost Depreciation
Carrying
As at Additions / Transfers As at As at Transfers / As at amount as at
01 October (deletions) during 30 September Rate / Life 01 October For the (deletions) during Impairment 30 September 30 September
2020 during the year the year 2021 2020 year the year 2021 2021
Rupees Rupees Rupees Rupees % / Year Rupees Rupees Rupees Rupees Rupees Rupees
Owned
Freehold land 1,686,376,559 43,281,688 - 1,729,658,247 - - - - - - 1,729,658,247

FINANCIAL
- -
Factory building on freehold land 2,308,492,739 - - 2,292,797,850 10% 1,181,256,549 112,723,619 - - 1,281,155,562 1,011,642,288
(15,694,889) (12,824,606)
Non-factory building on 819,023,860 14,551,040 - 833,290,595 5% - 5/20 years 337,721,530 26,474,065 - - 364,195,595 469,095,000
freehold land (284,305) -
Plant and machinery 23,056,864,049 42,697,086 - 22,525,456,883 5% - 5/10 years 7,352,679,660 809,538,021 - 10,887,791 7,676,195,911 14,849,260,972
(574,104,252) (496,909,561)
Sugarcane roots 744,430,754 498,972,201 - 776,236,276 3 years 211,930,205 216,431,818 - - 274,848,701 501,387,575
(467,166,679) (153,513,322)
Motor vehicles 1,888,143,288 38,832,509 56,371,350 1,896,038,972 20% - 5 years 1,581,771,827 103,460,156 42,254,670 - 1,663,649,036 232,389,936
STATEMENTS
(87,308,175) (63,837,617)
Electrical installation 176,505,071 5,546,060 - 174,808,018 10% 88,140,247 9,089,582 - 1,290,867 93,284,487 81,523,531
(7,243,113) (5,236,209)
Office equipment 71,762,252 1,515,276 - 73,189,228 20% - 5 years 51,285,216 4,876,930 - 4,691 56,080,012 17,109,216
(88,300) (86,825)
Tools and equipment 80,966,565 1,718,099 - 78,480,510 10% 37,520,402 4,460,822 - 176,886 38,699,346 39,781,164
(4,204,154) - (3,458,764)
Furniture and fixture 27,114,622 2,068,773 - 28,693,025 10% - 10 years 14,269,683 2,386,771 - 33,849 16,221,243 12,471,782
(490,370) (469,060)
Weighbridge 40,823,357 - - 40,223,357 10% 24,447,291 1,637,607 - - 25,529,080 14,694,277
(600,000) (555,818)
Cost Depreciation
Carrying
Roads and boundary wall 95,300,302 - - 95,300,302 10% 59,075,968 3,622,433 - - 62,698,401 32,601,901
- -
Arms and ammunitions 8,224,057 237,500 - 8,237,117 10% 5,817,662 258,534 - - 5,886,898 2,350,219
(224,440) (189,298)
Fire fighting equipment 82,815,232 - - 82,815,232 20% 61,520,448 4,258,957 - - 65,779,405 17,035,827
- -
Aircrafts 873,689,731 28,333,194 - 902,022,925 10% 360,964,930 51,846,459 - - 412,811,389 489,211,536
- -
Tube well 8,607,613 - - 8,607,613 10% 5,101,964 350,565 - 6,997 5,459,526 3,148,087
- - -
Computers 76,628,411 4,522,255 - 79,393,189 33% 53,017,030 8,651,392 - 52,029 60,235,866 19,157,323
(1,757,477) (1,484,585)
32,045,768,462 682,275,681 56,371,350 31,625,249,339 11,426,520,612 1,360,067,731 42,254,670 12,453,110 12,102,730,458 19,522,518,881
(1,159,166,154) (738,565,665)

103
20.1.7 Particulars of immovable property (i.e. land and building) in the name of Company are as follows:
Usage of immovable Total area

Location property (Acres)
Mauza Shirin, Jamal Din Wali, District Rahim Yar Khan Manufacturing facility 318.60
Machi Goth, Sadiqabad, District Rahim Yar Khan Manufacturing facility & Co-Gen Power Plant 187.15
Village Laluwali, District Ghotki Manufacturing facility & Co-Gen Power Plant 157.03
59-A, Gulberg, Lahore Record room / space for corporate office 0.65
29-B, Gulberg, Lahore Rest house 0.30
Agricultural Land - Punjab (various locations)* Agriculture land 1,014.32
Agricultural Land - Sindh (various locations)* Agriculture land 1,078.98

The buildings on freehold land and other immovable fixed assets of the Company are constructed /
located at above mentioned freehold land.

* Due to large number of area, it is impracticable to disclose the name of each location of these
immovable fixed assets, as required under Paragraph 1(b) of the 4th Schedule to the Companies Act,
2017.
20.1.8 Land measuring 158.5 Kanals/19.81 acres situated at Sadiqabad is under litigation by virtue of an
appeal filed by the Company, whereby the Additional Commissioner Revenue, Bahawalpur has granted
stay order in the favour of the Company dated 08 November 2021 against order dated 26 October
2021 passed by the Additional Deputy Commissioner Revenue, Bahawalpur. The matter is pending
adjudication.
Note 2022 2021

Rupees Rupees
20.1.9 Depreciation charge for the year has
been allocated as follows:
Cost of goods manufactured 34.1 847,564,715 953,399,160
Further cost charged on biological assets 34.1.1.1 168,730,769 52,294,203
Administrative expenses 35 146,122,778 93,544,390
Cost incurred on standing crops 37.1.1 219,738,138 260,829,978
1,382,156,400 1,360,067,731

20.1.10 Impairment charge for the year ended 30 September 2021 had been allocated to cost of goods
manufactured.
104
20.1.11 Detail of disposals of operating fixed assets
The details of operating fixed assets disposed off / written off during the year are as follows:
Accumulated Net book Sales Gain / Mode of Relationship

Description Particulars of purchaser Cost depreciation value value (loss) disposal with the Company

Motor vehicles
Toyota Corolla Altis Mr. Umair Khalid 2,395,500 1,854,233 541,267 2,025,000 1,483,733 Negotiation Ex. Employee
Toyota Corolla Altis Mr. Bashir Ahmed 2,399,000 1,141,956 1,257,044 1,303,271 46,227 Negotiation Ex. Employee
Toyota Corolla Altis Mr. M. Attique Khan 1,985,000 1,425,654 559,346 610,500 51,154 Company Policy Ex. Employee
Toyota Corolla GLI Mr. Kamal-Ur-Rehman 1,800,000 1,297,775 502,225 540,000 37,775 Company Policy Employee
Toyota Corolla Altis Mr. M Zaman Khan 2,015,500 1,372,025 643,475 604,650 (38,825) Company Policy Employee
Toyota Corolla Altis Mr. Raza Zaidi 2,015,500 1,372,025 643,475 604,650 (38,825) Company Policy Employee
Toyota Corolla Altis Dr. Faqir Gulzar 2,010,000 1,446,404 563,596 603,000 39,404 Company Policy Employee
Toyota Corolla XLI Mr. Bilal Yaqoob 1,655,000 1,017,267 637,733 662,000 24,267 Company Policy Employee
Toyota Corolla GLI Mr. M. Ramzan 1,800,000 1,225,792 574,208 540,000 (34,208) Company Policy Employee
Toyota Corolla Altis Mr. Jawad Rashid 3,396,000 951,533 2,444,467 3,700,000 1,255,533 Company Policy Employee
Toyota Corolla XLI Mr. Naweed Rashid 2,041,500 1,237,365 804,135 598,840 (205,295) Company Policy Employee
Suzuki Swift M. Ramzan Adeel 1,585,000 768,296 816,704 348,711 (467,993) Company Policy Employee
25,098,000 15,110,325 9,987,675 12,140,622 2,152,947
Assets - written off
Sugarcane roots 366,342,055 246,939,430 119,402,625 - - Company policy
Others 14,580,709 12,638,051 1,942,658 - - Company policy
380,922,764 259,577,481 121,345,283 - -
Assets having net book value
less than Rs. 500,000 137,719,236 112,068,800 25,650,436 126,126,368 100,475,925
2022 543,740,000 386,756,606 156,983,394 138,266,990 102,628,872
2021 1,159,166,154 738,565,665 420,600,489 94,195,042 36,093,706
Note 2022 2021

Rupees Rupees
20.2 Capital work in progress
Additions during the year 875,475,342 563,007,941
Transfers made during the year (739,038,817) (517,340,981)

20.2.1 Reconciliation of carrying amounts by classes of assets is as follows:
2022
Transferred to
Opening Addition operating fixed Closing
Note balance for the year assets balance
Rupees Rupees Rupees Rupees
Advances for vehicles 31.1 30,670,978 42,649,386 (30,670,978) 42,649,386

Building 11,579,326 16,556,952 (14,039,562) 14,096,716
Plant and machinery 16,419,823 166,459,545 (42,922,565) 139,956,803
Sugarcane roots 20.2.2 1,596,253 649,809,459 (651,405,712) –
60,266,380 875,475,342 (739,038,817) 196,702,905


2021
Transferred to
Advances for vehicles 31.1 – 30,670,978 – 30,670,978

Building 14,516,860 11,613,506 (14,551,040) 11,579,326
Plant and machinery – 20,237,562 (3,817,739) 16,419,823
Sugarcane roots 20.2.2 82,560 500,485,895 (498,972,202) 1,596,253
14,599,420 563,007,941 (517,340,981) 60,266,380

20.2.2 Additions in sugarcane roots included transfer from biological assets amounting to Rs. 369 million
(2021: Rs. 288.156 million).
Note 2022 2021

Rupees Rupees
held for capital expenditure
96,532,902 148,928,660
Transferred to operating fixed assets 20.1.2 (26,584,980) (60,922,298)

21. RIGHT-OF-USE ASSETS
2022
Building Land Vehicles Total
Balance as at 01 October 45,446,352 1,362,720,555 471,458,460 1,879,625,367

Additions during the year – 1,188,730,806 132,638,090 1,321,368,896
Deletions during the year – (95,685,274) (540,632) (96,225,906)
Transfer to operating fixed assets - net book value – – (38,838,956) (38,838,956)
Impact of remeasurement 51,986,278 – – 51,986,278
Depreciation charged for the year (41,635,983) (642,582,851) (104,548,688) (788,767,522)
Balance as at 30 September 55,796,647 1,813,183,236 460,168,274 2,329,148,157
under current assets (27,741,791) (664,235,994) (38,314,532) (730,292,317)
28,054,856 1,148,947,242 421,853,742 1,598,855,840

Useful life (rate) / lease term 2 to 3 years 2 to 5 years 20%
106
2021
As at 01 October 83,561,321 839,299,150 253,601,056 1,176,461,527

Additions during the year 2,882,272 1,101,304,101 300,198,629 1,404,385,002
Deletions during the year – (32,325,447) – (32,325,447)
Derecognition due to sublease – (68,940,024) – (68,940,024)
Transfer to operating fixed assets - net book value – – (14,116,680) (14,116,680)
Impact of remeasurement (1,487,689) (7,935,666) – (9,423,355)
As at 30 September 45,446,352 1,362,720,555 471,458,460 1,879,625,367
under current assets – – (43,462,361) (43,462,361)
45,446,352 1,362,720,555 427,996,099 1,836,163,006


21.1 The Company’s obligations under leases of vehicle are secured by the lessor’s title to the leased assets.
Generally, the Company is restricted from assigning and subleasing the leased assets. There are several
lease contracts that include extension and termination options, which are further discussed in note 4.2.
Leases for vehicles may contain an option to purchase the underlying leased asset outright at the end
of the lease and the Company has the intention to exercise such option.
21.2 Right-of-use assets for land includes Rs. 12.06 million (2021: Rs. 19.68 million) towards Deharki Sugar
Mills (Private) Limited, a wholly owned subsidiary of the Company.
21.3 The depreciation charge on right-of-use assets for the year has been allocated as follows:
Note 2022 2021

Rupees Rupees
788,767,522 576,415,656

22. INVESTMENT PROPERTY
Investment property represents agricultural land measuring 401.04 acres (2021: 401.04 acres) situated at various
locations of Tehsil Sadiqabad, District Rahim Yar Khan given on operating lease having the fair value of Rs. 577
million as at 30 June 2022. The value of investment property was determined by approved external, independent
property valuer i.e. Hamid Mukhtar and Co. (Pvt.) Limited by using the market comparable method and categorize
as level 2 fair value (i.e. significant observable inputs). The most significant input in this valuation approach is
price / rate per acre in particular locality.


22.1 Forced sale value of the investment property as per the latest valuation report is Rs. 462 million (2021:
Rs. 276 million).
22.2 The Company as a lessor has entered into operating leases contract having lease terms upto 2 years.
Maturity analysis of future operating lease rentals are as follows:
2022 2021
Rupees Rupees
Less than one year 14,618,381 11,853,433
More than one year – 8,184,825
14,618,381 20,038,258

Note 2022 2021
Rupees Rupees
23. INTANGIBLES
Goodwill 23.1 608,310,693 608,310,693
Oracle computer software 23.2 2,379,683 4,419,411
610,690,376 612,730,104

23.1 Goodwill includes Rs. 568,545,391 and Rs. 39,765,302 arisen at the time of mergers of United Sugar
Mills Limited and Ghotki Sugar Mills (Private) Limited into the Company. For impairment testing, the
recoverable amount of both cash generating units are determined based on value in use calculation
which uses cash flow projections approved by the Board of Directors covering a five-year period using
the average discount rate of 13.94% per annum (2021: 15.46% per annum). The calculation of value in
use is sensitive to discount rate and key commercial assumptions. The discount rate reflects current
market assessment of the rate of return required for the business and is calculated using the Capital
Asset Pricing Model. The discount rate reflects the Weighted Average Cost of Capital of the Company.
Management’s key assumptions include stable profit margins, based on past experience in this market.
No expected efficiency improvements have been taken into account and prices and wages reflect
publicly available forecasts of inflation for the industry. Management believes that after considering the
various scenarios no reasonably possible change in any of the above key assumptions would cause
the carrying value of the unit to materially exceed its recoverable amount. Based on this calculation, no
impairment is required to be accounted for against the carrying amount of goodwill.
Note 2022 2021

Rupees Rupees
23.2 Oracle computer software
Cost 20,397,279 20,397,279
Accumulated amortization
As at 01 October 15,977,868 13,938,140
Amortization for the year 35 & 42 2,039,728 2,039,728
18,017,596 15,977,868
As at 30 September 2,379,683 4,419,411

Rate of amortization 10% 10%

108
Note 2022 2021
Rupees Rupees
24. LONG TERM INVESTMENTS
Investment in subsidiary companies - unquoted 24.1 1,736,004,491 1,736,004,491
Investment in associated companies - unquoted 24.2 2,500 2,500
1,736,006,991 1,736,006,991
Less: Classified under current assets
as short term investments

Faruki Pulp Mills Limited (“FPML”) (651,994,491) (651,994,491)
JDW Power (Private) Limited (“JDWPL”) 24.2 – –
(651,994,491) (651,994,491)
Classified under non - current assets 1,084,012,500 1,084,012,500
Note 2022 2021

Rupees Rupees
24.1 Investment in subsidiary companies - unquoted
Deharki Sugar Mills (Private) Limited (“DSML”)
104,975,000 (2021: 104,975,000) fully paid
shares of Rs. 10 each
Equity held 100% (2021: 100%) 1,049,750,000 1,049,750,000

Faruki Pulp Mills Limited (“FPML”)
310,892,638 (2021: 310,892,638) fully paid
Equity held 57.67% (2021: 57.67%) 3,154,426,383 3,154,426,383
Less: Accumulated impairment
allowance/reversal 24.1.1 (2,502,431,892) (2,502,431,892)
651,994,491 651,994,491
Sadiqabad Power (Private) Limited (“SPL”)
1,694,500 (2021: 1,694,500) fully paid
Equity held 100% (2021: 100%) 16,945,000 10,001,000
Investment made during the year – 6,944,000
16,945,000 16,945,000
Ghotki Power (Private) Limited (“GPL”)
1,731,500 (2021: 1,731,500) fully paid
Equity held 100% (2021: 100%) 17,315,000 10,001,000
Investment made during the year – 7,314,000
17,315,000 17,315,000
1,736,004,491 1,736,004,491

24.1.1 Accumulated impairment allowance
Opening balance 2,502,431,892 2,584,372,978
Reversal of prior periods impairment loss 24.1.1.1 & 37 – (81,941,086)
Closing balance 2,502,431,892 2,502,431,892

24.1.1.1 Keeping in view the commercial viability of the plant and substantial accumulated losses, the management
of FPML believes that FPML may not be able to realize its assets and discharge its liabilities in the
normal course of business and prepared its financial statements for the year ended 30 September 2022
and 2021 on liquidation basis of accounting. Accordingly, management of the Company has estimated
the recoverable amount of investment in FPML Rs. 744.44 million (2021: Rs. 652 million) as determined
by the independent valuer and decided not to reversed further impairment loss of Rs. 92.45 million till
the disposal of FPML (for details, refer to note 24.1.1). The recoverable amount was estimated based
on valuation technique used as mention below and categorise as level 3 fair value.
Further, FPML through an extraordinary general meeting held on 25 March 2020, has resolved to
dispose of its property, plant and equipment either in parts or in their entirety to the prospective buyers
after due process. However, due to COVID-19 situation in the country this was not completed during the
financial year 2020 and the said arrangement was re-approved by the FPML shareholders in its EOGM
held on 13 December 2021. However, subsequent to year end, the management of FPML has initiated
the tendering process for disposal of assets of FPML under guideline set by the Board.
Valuation techniques used to derive fair values of the underlying assets

Reversal of
Carrying Recoverable Impairment
Valuation technique used
Value amount loss
Rupees Rupees Rupees
Net current assets 7,305,791 7,305,791 – The carrying amount is assumed to approximate
the fair value as these are reported at amounts
not less than those at which these are expected
to be recovered.

Property, plant and equipment 644,688,700 737,136,578 (92,447,878) Sales comparison approach for the freehold land
and depreciated replacement cost for plant &
machinery and ancillary equipment.
2022 651,994,491 744,442,369 (92,447,878)

2021 570,053,405 651,994,491 (81,941,086)

FPML engaged an independent valuer, to assess the recoverable amount of the property, plant and
equipment based on fair value less costs of disposal calculation. The fair value of freehold land has
been derived using a sales comparison approach. Sale prices of comparable land in close proximity
are adjusted for differences in key attributes such as location and size of the land. The most significant
input in this valuation approach is price per acre which has significant change from prior year.
The fair value of plant, machinery and ancillary equipment is based on depreciated replacement
cost approach taking into account the prevailing market value of identified items and net realizable
value assets grouped according to machinery class, adjusted against depreciation, price indices and
exchange differences on imported assets. The fair value of building and civil work is based on depreciated
replacement cost approach taking into account the construction features and measurements of built
area involved.
The following table summarizes the quantitative and qualitative information about the significant
unobservable inputs used in fair value measurements.
110
Description Significant unobservable Quantitative data / range and
inputs relationship to the fair value
Buildings and civil works Cost of construction of a The prevailing market rate of
similar building and structure. construction has been
determined by taking into
account the finishes required in
wood pulp manufacturing
industry.

Straight line depreciation The versatility and general
applied for usage from date conditions of the building have
of construction. been used to estimate the
Forced sale value used since straight line basis of depreciation
FPML is liquidating its assets. of the building.

Plant and machinery and Cost of acquisition of similar The market value has been
ancillary equipment machinery with similar level of determined by using cost
technology. of acquisition of similar
plant and machinery with
similar level or technology
and applying a suitable
depreciation factor
based on remaining useful
lives of plant and equipment.
Suitable depreciation rate The higher the cost of

to arrive at depreciated acquisition of similar machinery,
replacement value. the higher the fair value of plant
and equipment. Furthermore,
Forced sale value used since higher the depreciation rate, the
FPML is liquidating its assets. lower the fair value of items.
Note 2022 2021

Rupees Rupees
24.2 Investment in associated companies - unquoted
JDW Power (Private) Limited (“JDWPL”)
9,000,000 (2021: 9,000,000) fully paid
Equity held 47.37% (2021: 47.37%) 90,000,000 90,000,000
Less: Accumulated impairment allowance (90,000,000) (90,000,000)
24.2.1 – –
Kathai-II Hydro (Private) Limited (“KHL”)
250 (2021: 250)
fully paid shares of Rs. 10 each
Equity held 20% (2021: 20%) 24.2.2 2,500 2,500

24.2.1 On 11 July 2019, the shareholders of JDWPL through an extra ordinary general meeting passed a
resolution for the winding up of JDWPL, subsequently management of the JDWPL has applied to the
Securities and Exchange Commission of Pakistan (SECP) for the approval of winding up.
24.2.2 The KHL is a private limited company incorporated in Pakistan on 27 August 2012 under the repealed
Companies Ordinance, 1984. The principal activity of the associate is to generate, distribute and sell
electricity.
25. LONG TERM DEPOSITS

These includes security deposits with conventional banks and Islamic financial institution/banks in respect of
leasing facilities availed against right-of-use assets amounting to Rs. 4.46 million and Rs. 88.41 million (2021: Rs.
7.97 million and Rs. 86.89 million) respectively. Current maturity of long term deposits for Rs. 13.04 million (2021:
Rs. 13.37 million) are presented under current assets (refer to note 31). The fair value adjustment in accordance
with the requirements of IFRS 9 ‘Financial Instruments’ arising in respect of long term security deposits other
than right-of-use assets for Rs. 15 million (2021: Rs. 12.15 million) is not considered material and hence not
recognized. This also includes an advance amounting to Rs. 1.85 million (2021: Rs. 1.25 million) due from JDW
Aviation (Pvt.) Limited, an associated company. The maximum aggregate amount outstanding during the year
with respect to month end balances amounts to Rs. 4.56 million (2021: Rs. 4.25 million). These deposits do not
carry any interest or markup.
Note 2022 2021

Rupees Rupees
26. LEASE RECEIVABLES
Balance as at 01 October 69,633,908 –
Recognised during the year – 112,922,359
Impact of early termination (13,718,278) –
Impact of remeasurment 3,589,965 –
Interest income from subleasing of right-of-use assets 37 2,705,119 5,523,671
Receipt during the year / other adjustment (62,210,714) (48,812,122)
Balance as at 30 September 26.2 – 69,633,908

26.1 It presents sub-lease of agriculture land for lease term 1 to 1.5 years. The incremental borrowing rate
applied to lease receivable is 9.71% (2021: 8.70 %).

26.2 The following undiscounted /discounted lease payments to be received after the reporting date are as:
2022 2021
Rupees Rupees
Total undiscounted lease receivable – 72,261,312
Unearned finance income – (2,627,404)
Discounted lease receivables – 69,633,908

26.3 The risks associated with rights the Company retains in underlying assets are not considered to be
significant, the Company employs strategies to further minimise these risks as ensuring all contracts
include clauses requiring the lessee to submit security cheque during the lease term which will be
refundable at the end of lease term.
112
27. BIOLOGICAL ASSETS
2022
Standing Wheat Rhodes Mustard Rice Total
sugarcane crop grass
Note Rupees Rupees Rupees Rupees Rupees Rupees

At the beginning of the year at fair value 2,333,366,150 1,317,463 52,436 464,157 – 2,335,200,206
Further cost charged during the year 34.1.1.1 1,118,077,306 33,010,047 – 4,728,157 – 1,155,815,510
Fair value gain on initial recognition
of agricultural produce 34.1.1 816,440,302 40,338,568 126,064 16,268,878 – 873,173,812
Decrease due to harvest (4,267,883,756) (74,666,078) (178,500) (21,461,194) – (4,364,189,528)
Cost incurred on standing crops 37.1.1 2,397,069,755 836,163 – 737,668 – 2,398,643,586
Net fair value gain on biological assets 37.1 456,389,080 – – – – 456,389,080
At the end of the year at fair value 2,853,458,837 836,163 – 737,666 – 2,855,032,666

2021

At the beginning of the year at fair value 1,816,363,807 955,781 – 1,408,532 1,387,860 1,820,115,980
Further cost charged during the year 34.1.1.1 767,924,711 23,398,351 13,749,388 4,546,700 194,116 809,813,266
of agricultural produce 34.1.1 838,458,688 52,309,317 (3,277,778) 14,170,131 153,620 901,813,978
Decrease due to harvest (3,422,747,205) (76,663,449) (10,471,610) (20,125,363) (1,735,597) (3,531,743,224)
Cost incurred on standing crops 37.1.1 1,964,493,216 1,317,463 52,436 464,158 – 1,966,327,273
At the end of the year at fair value 2,333,366,150 1,317,463 52,436 464,157 – 2,335,200,206

113
27.1 Measurement of fair values
27.1.1 Fair value hierarchy
In absence of active market for standing sugarcane crop, the fair value measurement for the standing
sugarcane crop has been categorised as Level 3 fair value based on the inputs to the valuation
techniques used. Fair value has been determined by independent professional valuer, Osam Consultants
Engineers as at 30 September 2022 on the basis of a discounted cash flow model. The valuation model
considers the present value of the net cash flows expected to be generated by the standing sugarcane
crop at maturity, in its most relevant market, and includes the potential biological transformation and
related risks associated with the asset. The cash flows projections include specific estimates for next
year which mainly include crop’s expected yield and expected production costs and costs to sell. The
expected cash flows are discounted using an average risk adjusted discount rate.
27.1.2 Valuation techniques and significant unobservable inputs

The key variables, assumptions and the impact of changes in those is given below:
Unit 2022 2021

Valued plantations (Actual)
- Punjab Zone Acres 8,736 9,615
- Sindh Zone Acres 11,102 11,174

Estimated further production costs and
costs to sell per acre
- Punjab Zone Rupees 117,558 87,842
- Sindh Zone Rupees 112,582 73,013

Estimated yield per acre
- Punjab Zone Maunds 942 892
- Sindh Zone Maunds 857 790

Harvest age Months 12 - 14 12 - 14

Estimated future sugarcane
support price per maunds
- Punjab Zone Rupees 300 225
- Sindh Zone Rupees 302 250

Risk - adjusted discount rate % per month 0.81% 0.98%

Cost of biological assets other than standing sugarcane crop of Rs. 1.57 million (2021: Rs. 1.83 million)
is considered to approximate their respective fair value less costs to sell as these assets are still at a
very early stage of plantation and it is considered that insignificant biological transformation has taken
place or the impact of fair value measurement is not significant.

114
27.2 Sensitivity analysis
Impact of changes in key subjective assumptions on fair value of biological assets is given below:

Increase / Increase /
(Decrease) (Decrease)
2022 2021
Rupees Rupees
Decrease of 10% in estimated average yield per acre (498,013,252) (288,169,555)
Increase of 10% in estimated further production cost (212,667,368) (151,464,625)
Increase of 10% in estimated average selling price
per maund 498,013,252 384,801,240
Increase of 10% in discount rate (11,452,384) (11,239,328)

27.3 Risk management strategy related to agricultural activities
The Company is exposed to the following risks relating to its sugarcane cultivation.

Regulatory and environmental risks
The Company is subject to various laws and regulations in Pakistan. The Company has established
environmental policies and procedures aimed at ensuring compliance with local environmental and
other laws. Management performs regular reviews to identify environmental risks and to ensure that the
systems in place are adequate to manage those risks.

Climate and other risks
Due to inherent nature of the agricultural assets, it contains elements of significant risks and
uncertainties which may adversely affect business and resultant profitability, including but not limited to
the following:

i) adverse weather conditions such as floods etc. affecting the quality and quantity of production; and

ii) potential insect, fungal and weed infestations resulting in crop failure and reduced yields.

The Company is principally dependent upon the Government’s measures for flood control. The Company
follows an effective preventive pesticide / insecticide / fungicide program, regularly monitors the crops
for any infestations and takes immediate curative measures. As per assessment of crop losses in Sindh
Province using satellite data by International Centre for Integrated Mountain Development and Pakistan
Agricultural Research Council, the Pakistan’s Sindh Province is projecting 61% loss of the expected
production of sugarcane due to 2022 Pakistan floods. The floods struck before the harvesting stage
of key crops of the Company e.g. sugarcane. The Company’s sugarcane crop is predominantly grown
in the northeastern districts, where flood inundation remained relatively lower. Management of the
Company expect lesser production of sugarcane due to 2022 Pakistan floods.
Supply and demand risk

The price of sugarcane is driven by consumer demand of sugar as well as Government’s intervention
in setting of minimum / support price for the grower. Surplus production or bumper crop may result in
a lower selling price hence affecting profitability of the Company adversely. The Company manages
this risk by aligning its harvest volume to market supply and demand. Management performs regular
industry trend analysis for projected harvest volume and analysis.


Note 2022 2021
Rupees Rupees
28. STORES, SPARE PARTS AND LOOSE TOOLS
Stores:
- Sugar 975,688,011 716,958,741
- Co-Generation Power 165,263,929 164,542,144
- Corporate Farms 537,236,178 396,847,011
1,678,188,118 1,278,347,896
Spare parts:
- Sugar 455,672,713 450,533,261
552,914,660 533,092,130
Loose tools:
- Sugar 37,169,670 32,956,920
48,468,604 42,168,993
2,279,571,382 1,853,609,019

Less: Provision for obsolescence 28.1 (363,112,737) (471,792,126)
28.3 1,916,458,645 1,381,816,893

28.1 This includes reversals of Rs. 151.96 million (2021: Rs. 19.86 million) which is included in cost of goods
manufactured.

28.2 Stores, spare parts and loose tools was mortgaged as security against short term borrowings (refer to
note 13).
28.3 It includes 2,891 items of store, spare parts and loose tools which had been discarded in prior periods
and measured at nil value.

Note 2022 2021
Rupees Rupees
29. STOCK-IN-TRADE
Sugar 29.1 11,509,245,669 1,636,244,037
Bagasse 574,591,236 232,354,110
Mud 61,943,495 11,863,755
34 12,145,780,400 1,880,461,902

29.1 The closing stock of sugar, net of 10% to 25% margin, having carrying value of Rs. 8,224 million (2021:
Rs. 500 million) has been pledged against cash finance obtained from commercial and Islamic banks
(for details, refer to note 13).
Note 2022 2021

Rupees Rupees
30. TRADE RECEIVABLES
Considered good 30.1 & 30.2 3,551,542,437 4,195,841,481
Considered doubtful - local 100,391,459 51,672,219
3,651,933,896 4,247,513,700
Less: Impairment allowance 30.3 (100,391,459) (51,672,219)
3,551,542,437 4,195,841,481

116
30.1 It includes net carrying amount of Rs. 1,019 million (2021: Rs. 699.35 million) receivables from growers
against sale of agri inputs. The gross carrying amount of such receivables amounting to Rs. 3,040
million (2021: Rs. 2,014 million) is off set by Rs. 2,021 million (2021: Rs. 1,315 million) in line with
accounting policies of the Company as stated in note 4.19.5 to the financial statements (for details, refer
to note 19.1.32).
30.2 These also includes Rs. 2,279 million (2021: Rs. 3,185 million) receivable from CPPA-G on account
of sale of electricity under Energy Purchase Agreements. These are secured by a guarantee from the
Government of Pakistan under the Implementation Agreements (IAs), however, a delayed payment mark-
up is charged in case the amounts are not paid within due dates. The rate of delayed payment mark-up
charged during the year on outstanding amounts was 3MK+2% to 3MK+4.5% (2021: 3MK+2% to
3MK+4.5%) per annum.

30.2.1 The Company had filed a Writ Petition No. 1298 against CPPA-G’s decision of unilaterally making an
unauthorized set-off of Rs. 4,062.01 million from the energy invoices (fixed energy) of the Company
based on its interpretation of the Upfront Tariff for New Bagasse Based Co-Generation Power Projects
dated 29 May 2013 (2013 Upfront Tariff) determined by the NEPRA as opted by and applied to the
Company. The petition is currently pending adjudication before the Honorable Islamabad High Court.

However, Pursuant to the provisions of the Master Agreement and EPA Amendment Agreement as
mentioned in note 1.2, CPPA-G and the Company shall jointly proceed to file application for disposal
of pending litigation before the Court which are in under process and at present, no any unlawfully
deducted/disputed amount is recoverable as CPPA-G has made full payment to the Company for
such unlawfully deducted/disputed amount as agreed. Accordingly, the Company has assessed that
amounts aggregating Rs. Nil (2021: Rs 3,326 million) are no longer recoverable as referred to in note 38.
Note 2022 2021

Rupees Rupees
30.3 Movement for impairment allowance
Impairment against delayed payment
markup - CPPA-G 38 & 42 48,719,240 –
Recovered during the year – (5,912,056)

Note 2022 2021
Rupees Rupees
31. ADVANCES, DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES
Advances to suppliers and contractors 31.1 338,724,230 167,993,264
Advances to growers 31.2 453,503,219 323,253,371
Prepaid expenses 43,040,442 34,792,678
Current portion of long term security deposits 25 13,036,630 13,371,450
Other short term security deposits 31.3 64,350,690 36,800,000
Receivable from the DSML - subsidiary company 31.4 145,386,839 –
Advances to staff 31.5 13,904,526 15,189,181
Sugar export subsidy 31.6 – –
Other receivables 31.7 26,386,651 5,488,302
1,098,333,227 596,888,246


Note 2022 2021
Rupees Rupees
31.1 Advances to suppliers and contractors
- Considered good 31.1.1 381,373,616 198,664,242
- Considered doubtful 55,977,156 55,977,156
437,350,772 254,641,398
Less: Advances for vehicles 20.2.1 (42,649,386) (30,670,978)
Less: Provision for doubtful advances 31.1.2 (55,977,156) (55,977,156)
338,724,230 167,993,264

31.1.1 This includes Rs. 74,148 (2021: Rs. 693,043) due to / from Lahore Flying Club (Guarantee) Limited, an
associated company as Makhdoom Syed Ahmad Mahmud, a Non-Executive Director, is also president
of Lahore Flying Club (Guarantee) Limited. The maximum aggregate amount outstanding during the
year with respect to month end balances amounts to Rs. 0.53 million (2021: Rs. 1.01 million). These are
neither past due nor impaired.
Note 2022 2021

Rupees Rupees
31.1.2 Provision for doubtful advances
Reversal of provision for the year – (6,723,679)
Balance at end of the year 55,977,156 55,977,156

31.2 Advances to growers
- Considered good 453,503,219 323,253,371
458,441,185 328,191,337
Less: Provision for doubtful advances (4,937,966) (4,937,966)
31.2.1 453,503,219 323,253,371

31.2.1 This represents advances provided to various sugarcane growers in the form of cash, seeds and agri-
implements. These carry interest rates ranging from 10% to 17% (2021: 12% to 17%) per annum and will
be adjusted against sugarcane payment in forthcoming crushing season.
31.3 This represents security deposit paid to Utility Stores Corporation of Pakistan against the tender of sale
of sugar.

31.4 The Company and Deharki Sugar Mills (Pvt.) Limited - a wholly owned subsidiary, have opted for group
taxation as one fiscal unit under section 59AA of the Income Tax Ordinance, 2001 as explained in note
4.9.3. As on reporting date, the Company’s share under group taxation after netting of advance tax has
been recognized as receivable from the Subsidiary company - DSML.
Note 2022 2021

Rupees Rupees
31.5 Advances to staff
- against salaries 11,077,078 12,829,884
- against expenses 2,827,448 2,359,297
31.5.1 13,904,526 15,189,181

31.5.1 These represent advances given to staff as in accordance with the Company’s policy.
118
Note 2022 2021
Rupees Rupees
31.6 Sugar export subsidy
Considered good – –
Considered doubtful 399,296,190 399,296,190
19.1.20 399,296,190 399,296,190
Less: Impairment allowance (399,296,190) (399,296,190)
– –

31.7 Other receivables
Considered good 31.7.1 26,386,651 5,488,302
31.7.2 29,982,985 9,084,636
26,386,651 5,488,302

31.7.1 It includes Rs. nil (2021: Rs. 3.41 million) due from key management personnel of the Company. The
maximum aggregate amount outstanding during the year with respect to month end balances amounts
to Rs. nil (2021: Rs. 3.41 million). These were neither past due nor impaired.
31.7.2 It includes Rs. 21.35 million (2021: Rs. Nil) receivable in respect of sub-lease of land and are classified
as operating lease in line with accounting policies of the Company as stated in note 4.2.3 to these
unconsolidated financial statements.
Note 2022 2021

Rupees Rupees
32. CASH AND BANK BALANCES
At banks:
Current accounts
- Balance with conventional banks 247,262,956 227,418,794
- Balance with Islamic banks 36,393,785 14,200,107
283,656,741 241,618,901
Saving accounts
- Deposits with conventional banks 32.1 1,780,395 1,868,139
285,437,136 243,487,040
Cash in hand 4,257,457 3,832,639
289,694,593 247,319,679

32.1 The balances in savings accounts are placed under mark-up arrangements and bear mark-up ranging
from 5.50 % to 13.50 % (2021: 5.50%) per annum.

Note 2022 2021
Rupees Rupees
33. REVENUE FROM CONTRACTS WITH CUSTOMERS
Disaggregation of revenue based on:

33.1 Segments

Sugar
Sugar - Local 42,167,063,393 44,373,005,086
Molasses - by product 33.1.1 7,912,725,812 5,307,547,291
Agri Inputs 3,010,758,777 1,994,493,012
Mud - by product 323,985,987 254,290,536
Bagasse - by product 313,855,799 63,948,810
53,728,389,768 51,993,284,735
Co-Generation Power 33.1.2 3,641,150,936 3,631,419,740
Corporate Farms 33.1.3 1,518,367,147 1,175,587,087
58,887,907,851 56,800,291,562

33.1.1 Molasses - by product
- Sale under DTRE (Duty & Tax Remission for Exporters) 7,303,995,880 4,991,538,128
- Others 608,729,932 316,009,163
7,912,725,812 5,307,547,291

33.1.2 Co-Generation Power
Variable energy price 2,219,199,529 2,214,816,346
Fixed energy price 1,421,951,407 1,416,603,394
3,641,150,936 3,631,419,740

33.1.3 Corporate Farms
Sugarcane to Deharki Sugar Mills (Private) Limited 1,418,901,000 1,048,539,359
Sugarcane seed and other crops 99,466,147 127,047,728
1,518,367,147 1,175,587,087

33.1.4 Timing of revenue recognition
Products transferred at a point in time 55,246,756,915 53,168,871,822
Products transferred over time 3,641,150,936 3,631,419,740
58,887,907,851 56,800,291,562

33.2 Revenue recognised during the year included Rs. 1,064 million (2021: Rs. 2,678 million) that was
included in contract liabilities / advances from customers at the beginning of the year.
120
Note 2022 2021
Rupees Rupees
34. COST OF REVENUE
Opening stock-in-trade 1,880,461,902 3,985,441,491
Add: Cost of goods manufactured 34.1 59,973,992,551 44,529,552,455
Add: Freight and other costs related to contracts 28,829,873 30,183,743
61,883,284,326 48,545,177,689
Less: closing stock-in-trade
- Sugar (11,509,245,669) (1,636,244,037)
- Bagasse (574,591,236) (232,354,110)
- Mud (61,943,495) (11,863,755)
29 (12,145,780,400) (1,880,461,902)
34.1.3 49,737,503,926 46,664,715,787

Note 2022 2021
Rupees Rupees
34.1 Cost of goods manufactured
Cost of crops consumed
(including procurement and other costs) 34.1.1 50,490,284,695 36,768,605,714
Salaries, wages and other benefits 34.1.2 2,726,155,268 2,246,132,602
Cost of agri inputs 2,694,163,138 1,731,620,584
Depreciation of operating fixed assets 20.1.9 847,564,715 953,399,160
Packing materials consumed 575,654,978 292,156,305
Chemicals consumed 556,002,759 232,954,879
Cost of bagasse consumed 547,011,098 641,736,492
Stores and spare parts consumed 28.1 426,561,907 398,402,069
Operation and maintenance 34.1.4 221,032,622 212,629,695
Vehicle running expenses 168,860,222 107,077,450
Electricity and power 123,795,065 86,082,542
Sugarcane roots written off 20.1.11 119,402,625 313,653,357
Depreciation of right-of-use assets 21.3 103,361,699 64,910,671
Insurance 83,768,566 82,049,158
Oil, lubricants and fuel consumed 78,323,859 65,767,420
Mud and bagasse shifting expenses 45,922,614 23,846,915
Provision for obsolescence 43,283,317 167,952,997
Repairs and maintenance 29,441,398 16,960,141
Handling and storage 26,455,010 21,955,504
Printing and stationery 14,417,537 7,709,859
Freight and octroi 10,054,628 6,338,769
Telephone and fax 9,212,307 6,021,866
Initial land preparation 4,901,749 3,838,072
Travelling and conveyance 2,943,141 1,941,716
Assets written off 1,354,042 48,845,795
Impairment of operating fixed assets – 12,453,110
Other expenses 24,063,592 14,509,613
59,973,992,551 44,529,552,455

Note 2022 2021
Rupees Rupees
34.1.1 Cost of crops consumed
Sugarcane purchased 45,917,649,983 33,141,761,459

Cost of harvested crops
Fair value of standing crops transferred to profit or loss 37.1 2,335,200,206 1,820,115,980
Fair value gain on initial recognition of agricultural produce 27 & 37 873,173,812 901,813,978
Further cost charged 34.1.1.1 1,733,380,064 1,193,070,739
4,941,754,082 3,915,000,697
Less: transferred to capital work in progress (369,119,370) (288,156,442)
50,490,284,695 36,768,605,714
34.1.1.1 Further cost charged

Salaries, wages and other benefits 34.1.1.1.1 341,344,599 237,182,249
Fuel expenses 207,009,907 111,970,191
Harvesting expense 129,443,354 122,225,319
Irrigation expenses 79,904,981 49,722,830
Bio-laboratory expenses 21,260,981 15,736,599
Fertilizer expenses 13,627,117 13,979,775
Seed expenses 4,234,493 3,798,038
Insurance 2,829,745 3,806,408
Pesticide and herbicide expenses 2,395,936 5,231,731
Others 12,849,564 13,659,156
Cost charged to biological assets 27 1,155,815,510 809,813,266

Transportation expenses 567,301,490 375,073,455
Road cess 10,263,064 8,184,018
577,564,554 383,257,473
34.1.1 1,733,380,064 1,193,070,739

34.1.1.1.1 Salaries, wages and other benefits include Rs. 7.03 million (2021: Rs. 5.87 million) in respect of
contribution towards provident fund.

34.1.2 Salaries, wages and other benefits includes contribution to provident fund of Rs. 64.94 million (2021:
Rs. 58.79 million) and expense recognized in respect of defined benefit gratuity fund of Rs. 19.94 million
(2021: Rs. 35.89 million).
34.1.3 It includes estimated loss of bagasse by fire amounting to Rs. 29.6 million (2021: Nil).
2022 2021
Rupees Rupees
34.1.4 Operation and maintenance
Reimbursable expenses 188,632,622 180,229,695
Operating fee 32,400,000 32,400,000
221,032,622 212,629,695
122
Note 2022 2021
Rupees Rupees
35. ADMINISTRATIVE EXPENSES
Salaries, wages and other benefits 35.1 1,542,983,042 1,420,286,896
Charity and donations 35.2 102,545,660 39,350,000
Legal and professional services 71,442,994 115,123,498
Vehicle running and maintenance 58,278,191 41,736,805
Insurance 30,812,960 22,335,965
Fee and taxes 22,231,583 10,306,393
Telephone, fax and postage 11,263,079 11,027,292
Subscription and renewals 8,393,984 14,218,759
Auditors’ remuneration 35.3 6,280,375 5,567,250
Office renovation 5,769,725 2,776,609
Entertainment 5,520,140 8,532,285
Amortization of intangible asset 23.2 2,039,728 2,039,728
Advertisement 1,512,580 242,350
Assets written off 20.1.11 588,616 –
Newspapers, books and periodicals 311,890 324,690
Other expenses 16,553,224 12,427,923
2,157,610,208 1,916,766,471

35.1 Salaries, wages and other benefits includes contribution to provident fund of Rs. 32.58 million (2021:
(2021: Rs. 15.38 million).
Note 2022 2021

Rupees Rupees
35.2 Donations for the year have been given to:
- Tareen Education Foundation 65,000,000 29,250,000
- Water proof tent & Mosquito nets for flood affectees 17,385,660 –
- Prime Minister’s Flood Relief Fund 10,000,000 –
- KPK CM’s Flood Relief Fund 5,000,000 –
- Professional Education Foundation 1,500,000 1,000,000
- National Society for M.E.H Children 1,000,000 1,000,000
- Mr. Syed Inam for flood relief efforts 1,000,000 –
- Medi Bank trust – 3,200,000
- Lahore Race Club – 2,000,000
- Special Education and Training Centre – 1,000,000
- Others 35.2.1 1,660,000 1,900,000
35.2.2 102,545,660 39,350,000

35.2.1 Others’ include donations paid to various institutions or individual. The aggregate amount paid to a
single institution / individual is less than Rs. 1 million.
35.2.2 None of the Directors of the Company or their spouses have any interest as Director in any of the
recipients of donations made by the Company during the year.

Note 2022 2021
Rupees Rupees
35.3 Auditors’ remuneration
Services as auditors:
Statutory audit 4,400,000 4,000,000
Half yearly review 660,000 630,000
Out of pocket expenses 55,000 50,000
Others 35.3.1 446,250 212,500
5,561,250 4,892,500
Other services:
Certifications for regulatory purposes 331,000 109,500
Tax advisory services 388,125 565,250
719,125 674,750
6,280,375 5,567,250

35.3.1 It represents audit fee charged for Employees’ Provident Fund, Workers’ Profit Participation Fund’s and
staff gratuity fund audit.

Note 2022 2021
Rupees Rupees
36. SELLING EXPENSES
Salaries, wages and other benefits 36.1 50,197,101 37,267,948
Other selling expenses 156,532 300,806
50,353,633 37,568,754

36.1 Salaries, wages and other benefits include Rs. 0.72 million (2021: Rs. 0.56 million) in respect of
124
Note 2022 2021
Rupees Rupees
37. OTHER INCOME
Income from financial assets
Delayed payment markup - CPPA-G 30.2 194,535,051 593,538,079
Mark up on advances / loan given to DSML 13.6 72,142,061 –
Income from sub-lease 31.7.2 50,770,691 –
Interest income from subleasing of
right-of-use assets 26 2,705,119 5,523,671
Gain on acknowledged receipts – 4,214,996
Interest income on bank deposits 32.1 1,038,737 537,748
321,191,659 603,814,494
Income from non-financial assets
Fair value gain on initial recognition of
agricultural produce 34.1.1 873,173,812 901,813,978
Net fair value gain on biological assets 37.1 456,389,080 368,872,933
Gain on disposal of operating fixed assets 20.1.11 102,628,872 36,093,706
Gain on derecognition of the right of-use assets 76,438,844 53,298,299
Reversal of Workers’ Welfare Fund 15.4 29,572,047 –
Insurance claim against loss of bagasse & crane from fire 24,541,000 –
Mark-up on advances to growers 31.2.1 24,385,001 8,896,997
Sale of stores, spare parts and loose tools 19,929,962 12,044,499
Rental income from investment property 12,280,212 11,250,495
Penalty for not honoring of contract 8,731,791 20,475,000
Sale of scrap 7,570,007 61,781,151
Liabilities no longer payable written back 4,682,992 43,297,402
Reversal of impairment loss in FPML 24.1.1 – 81,941,086
Others 6,118,910 7,125,198
1,646,442,530 1,606,890,744
1,967,634,189 2,210,705,238
Note 2022 2021

Rupees Rupees
37.1 Net fair value gain on biological assets
Fair value of standing crops 27 2,855,032,666 2,335,200,206
Cost incurred on standing crops 27 & 37.1.1 (2,398,643,586) (1,966,327,273)
456,389,080 368,872,933

37.1.1 Cost incurred on standing crops
Salaries, wages and other benefits 37.1.1.1 276,969,921 228,207,229
Fuel expenses 89,689,674 73,768,845
Insurance 3,279,720 3,217,403
Others 22,941,821 7,891,118
27 2,398,643,586 1,966,327,273

37.1.1.1 Salaries, wages and other benefits include Rs. 7.58 million (2021: Rs. 6.48 million) in respect of
Note 2022 2021

Rupees Rupees
38. OTHER EXPENSES
Workers’ Profit Participation Fund 15.3 270,956,575 234,729,641
Impairment against delayed payment markup - CPPA-G 30.3 48,719,240 –
Workers’ Welfare Fund 15.4 35,525,427 12,541,355
Advances and other receivables written off 10,457,542 10,005,070
Loss on acknowledged receipts 13,159,419 –
Loss on termination of sub-lease of land 13,718,278 –
Fixed energy receivables written off 30.2.1 – 3,325,977,231
Charge for delayed payment of sugarcane 38.1 – 105,032,575
Trade receivables written off – 1,969,757
Others 751,275 2,625,216
393,287,756 3,692,880,845

38.1 It represents late payment charges made to sugarcane growers for financial year 2019 to 2021 in
accordance with the Punjab Sugar Factories Control Rules, 1950.
Note 2022 2021

Rupees Rupees
39. FINANCE COST
Mark-up based loans from conventional banks /
financial institutions
- Long term finances - secured 1,243,584,510 1,099,230,973
- Short term borrowings - secured 1,113,534,718 441,747,152
- Interest expense for leasing arrangements 9 260,253,949 178,103,402
2,617,373,177 1,719,081,527
Islamic mode of financing
684,639,651 378,673,100
Borrowings from related party - unsecured
- Deharki Sugar Mills (Private) Limited - net – 145,740,768

Amortization of transaction cost 8 6,562,720 6,562,720
Markup on short term advance from provident fund 3,425,096 1,505,818
Bank charges and commission 43,918,710 42,145,496
125,512,507 56,014,945
Less: Amortization of deferred Government grant 12 (23,388,308) (47,767,213)
3,404,137,027 2,251,743,127
126
Note 2022 2021
Rupees Rupees
40. TAXATION
Income tax 653,688,632 850,070,061
Super tax 10.1 104,354,081 –
Change in estimate related to prior year (211,710,027) –
Other adjustments 40.1 – 77,653,331
546,332,686 927,723,392
Deferred tax 10.2 613,614,238 (1,360,643,773)
Agriculture tax 2,144,987 1,945,979
1,162,091,911 (430,974,402)

40.1 It includes adjustments related to tax credit u/s 65B of the Income Tax Ordinance, 2001 for an amount
of Rs. Nil (2021: Rs. 34.12 million and Rs. 35.1 million for tax year 2015 and 2016) which was disallowed
by the Additional Commissioner Inland Revenue and CIR (A) respectively. The Company has filed an
appeal which is pending before ATIR.
40.2 Relationship between tax expense and accounting profit before tax
The provision for taxation related to current and preceding financial year mainly represents the Minimum
Tax and final tax liabilities under section 113 and 169 of the Income Tax Ordinance, 2001 respectively.
Accordingly, tax charge reconciliation for current and preceding financial year has not been prepared
and presented.
40.3 For tax contingencies, refer to note 19.1.1 to 19.1.18
2022 2021
41. EARNINGS PER SHARE - BASIC AND DILUTED
Basic earnings per share

Profit for the year Rupees 3,950,557,579 4,878,296,218

Weighted average number of ordinary shares Numbers 59,776,661 59,776,661

Basic earnings per share Rupees 66.09 81.61

41.1 A diluted earnings per share has not been presented as the Company does not have any convertible
instruments in issue as at 30 September 2022 and 2021 which would have any effect on the loss per
share if the option to convert is exercised.

Note 2022 2021
Rupees Rupees
42. CASH GENERATED FROM OPERATIONS
Adjustments for non-cash income and expenses:
Finance cost 3,397,574,307 2,245,180,407
Depreciation and impairment of operating fixed assets 1,892,284,541 1,696,020,395
Staff retirement benefits 266,674,755 151,811,708
Depreciation of right-of-use assets 149,018,098 107,379,358
Assets written off 20.1.11 121,345,283 362,499,152
Provision for obsolescence 34.1 43,283,317 167,952,997
Advances and other receivables written off 38 10,457,542 11,974,827
Amortization of intangibles 23.2 2,039,728 2,039,728
Fixed energy receivables written off – 3,325,977,231
Net fair value gain on biological assets 37.1 (456,389,080) (368,872,933)
Interest income (294,805,969) (612,711,491)
Reversal of provision for obsolescence (151,962,706) (19,862,700)
Gain on disposal of operating fixed assets 20.1.11 (102,628,872) (36,093,706)
Gain on derecognition of the right-of-use assets 37 (76,438,844) (53,298,299)
Reversal of Workers’ Welfare Fund 15.4 (29,572,047) –
Liabilities no longer payable written back (4,682,992) (43,297,402)
Reversal of impairment loss in FPML 24.1.1 – (81,941,086)
5,154,838,720 7,108,591,902
10,267,488,210 11,555,913,718
Working capital changes:
Trade receivables 202,534,200 1,346,117,459
Stores, spare parts and loose tools (425,962,363) 10,595,049
Biological assets (573,571,521) (674,549)
Advances, deposits, prepayments and other receivables (366,515,684) (98,783,783)
Stock-in-trade (10,265,318,498) 2,104,979,589
Lease receivables 69,633,908 43,288,451
Trade and other payables 850,839,003 (117,576,628)
Advances from customers 1,458,400,069 (1,613,810,104)
(9,049,960,886) 1,674,135,484
Cash generated from operations 1,217,527,324 13,230,049,202
128
43. REMUNERATION OF CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVES
The aggregate amount charged in these unconsolidated financial statements for remuneration, including all
benefits to the Chief Executive, Directors and Executives of the Company are as follows:
Directors
Chief Executive Executive Non - Executive Executives
2022 2021 2022 2021 2022 2021 2022 2021
Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees
Managerial remuneration 5,000,000 28,500,000 200,000,000 175,200,000 125,600,000 117,333,333 499,088,533 433,401,948
House allowance 2,000,000 11,400,000 80,000,000 70,080,000 50,240,000 46,933,333 199,635,413 173,360,779
Medical and other allowances 500,000 2,850,000 20,000,000 17,520,000 12,560,000 11,733,333 49,908,853 43,340,195
Bonus – – 125,000,002 100,000,002 78,000,000 62,399,998 563,159,535 440,006,725
Company’s contribution towards provident fund – – – – – – 45,804,178 40,162,515
Staff retirement benefit - gratuity – – – – – – 5,572,040 4,250,304
7,500,000 42,750,000 425,000,002 362,800,002 266,400,000 238,399,997 1,363,168,552 1,134,522,466
Number of persons 1 1 1 1 2 2 109 103

43.1 In addition to the above, Chief Executive, one Director (2021: two directors) and some of the Executives
are provided with free use of Company maintained cars and certain other benefits.

43.2 No meeting fee was paid to any Director of the Company during the current and preceding year.

43.3 Mr. Jahangir Khan Tareen, an Executive Director, and its family owned business concerns are permitted
to use the Company maintained aircraft for private trips, subject to availability, for which the proportionate
share of operating expenses is reimbursed to the Company. During the year, Rs. 44.527 million (2021:
Rs. 61.715 million) was charged for the use of aircraft.
44. FINANCIAL INSTRUMENTS

The Company has exposure to the following risks from its use of financial instruments:

- Credit risk
- Liquidity risk
- Market risk (including currency risk, interest rate risk and other price risk)

44.1 Risk management framework
The Board of Directors has overall responsibility for establishment and oversight of the Company’s
risk management framework. The executive management team is responsible for developing and
monitoring the Company’s risk management policies. The team regularly meets for any changes and
compliance issues are reported to the Board of Directors through the audit committee.
Risk management systems are reviewed regularly by the executive management team to reflect changes
in market conditions and the Company’s activities. The Company, through its training and management
standards and procedures, aims to develop a disciplined and constructive control environment in which
all employees understand their roles and obligations.

The audit committee oversees compliance by management with the Company’s risk management
policies and procedures, and reviews the adequacy of the risk management framework in relation to
the risks faced by the Company.

44.1.1 Credit risk
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or
customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating
activities (primarily trade receivables) and from its financing activities, including deposits with banks
and financial institutions, foreign exchange transactions and other financial instruments. To manage
credit risk, the Company maintains procedures covering the application for credit approvals, granting
and renewal of counterparty limits and monitoring of exposures against these limits. As part of these
processes, the financial viability of all counterparties are regularly monitored and assessed.
Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum
exposure to credit risk at unconsolidated statement of financial position date is:
2022 2021
Rupees Rupees
Financial assets at amortized cost
Long term deposits 15,001,428 13,832,958
Lease receivable – 69,633,908
Trade receivables 2,532,554,007 3,496,495,038
Advances, deposits and other receivables 101,814,419 68,293,864
Bank balances 285,437,136 243,487,040
2,934,806,990 3,891,742,808

Concentration of credit risk
Concentrations arise when a number of counterparties are engaged in similar business activities, or
activities in the same geographical region, or have economic features that would cause their ability to
meet contractual obligations to be similarly affected by changes in economic, political or other conditions.
Concentrations indicate the relative sensitivity of the Company’s performance to developments
affecting a particular industry. In order to avoid excessive concentrations of risk, management focuses
on the maintenance of a diversified portfolio. Identified concentrations of credit risks are controlled and
managed accordingly. However, the Company identifies concentration of credit risk by reference to type
of counterparty. Maximum exposure to credit risk by type of counterparty is as follows:
2022 2021
Rupees Rupees
Customers:
- Sugar segment 253,303,072 311,288,858
- Co-Generation Power segment 2,279,250,935 3,185,206,180
Banking companies 285,437,136 243,487,040
Others 116,815,847 151,760,730
2,934,806,990 3,891,742,808

Credit quality and impairment
The credit quality of financial assets that are neither past due nor impaired can be assessed by reference
to external credit ratings or to historical information about counterparty.
130
Trade receivables - considered good
Majority of the Company’s revenue are on advance basis and trade receivables mainly represents
receivable from Central Power Purchasing Agency (Guarantee) Limited, a Government owned entity and
are secured by guarantee from GoP under the Implementation Agreements. Hence, the management
believes that no further impairment allowance is necessary in respect of these receivables (for details,
The Company recognized ECL for trade receivables using the simplified approach as explained in note
4.19.7. As per aforementioned approach, the loss allowance was determined as:

2022 2021
Gross carrying Accumulated Gross carrying Accumulated
amount impairment amount impairment
Not past due 1,156,874,546 – 976,065,163 –
Past due:
1 - 90 days 1,118,556,132 – 1,655,854,335 –
91 - 365 days 257,123,329 – 864,575,540 –
366 - above days 100,391,459 100,391,459 51,672,219 51,672,219
2,632,945,466 100,391,459 3,548,167,257 51,672,219

Customer credit risk is managed subject to the Company’s established policy, procedures and controls
relating to customer credit risk management. Based on past experience, the management believes that
no further impairment allowance is necessary in respect of trade receivables as some receivables have
been recovered subsequent to the year end and for other receivables there are reasonable grounds
to believe that the amounts will be recovered in short course of time. Management believes that the
unimpaired balances that are past due are still collectible in full, based on historical payment behavior
and review of financial strength of respective customers. 61 % of unimpaired balances that are past due
has been recovered from CPPA-G subsequent to year end. Therefore, the Company has no material
expected credit loss under IFRS 9 ‘Financial Instruments’ at the year end.

The above gross carrying amount includes Rs. 2,328 million (2021: Rs. 3,185 million) amount receivable
from Central Power Purchasing Agency (Guarantee) Limited against sale of energy.

Bank balances
Impairment on bank balances has been measured on a 12 months expected credit loss basis and
reflects the short maturities of the exposures. The Company considers that its bank balances have low
credit risk based on the external credit ratings of the counterparties. The credit quality of the Company’s
bank balances can be assessed with reference to external credit rating agencies as follows:


Rating Rating 2022 2021
Long term Short term Agency Rupees Rupees
Banks
Conventional
The Bank of Punjab AA+ A1+ PACRA 125,916,432 143,142,246
MCB Bank Limited AAA A1+ PACRA 92,750,165 50,187,860
Habib Bank Limited AAA A1+ JCR-VIS 19,809,845 4,667,761
National Bank of Pakistan AAA A1+ PACRA 6,632,642 30,098,417
Faysal Bank Limited AA A1+ PACRA 3,286,519 152,110
United Bank Limited AAA A1+ JCR-VIS 200,438 158,897
Sindh Bank Limited A+ A1 JCR-VIS 85,419 559,788
Allied Bank Limited AAA A1+ PACRA 77,050 66,424
Bank Alfalah Limited AA+ A1+ PACRA 75,394 61,781
Askari Bank Limited AA+ A1+ PACRA 23,137 11,724
The Bank of Khyber A A1 PACRA 16,047 115,031
The First Microfinance Bank Limited A+ A1 JCR-VIS 47,892 10,000
Summit Bank Limited BBB- A-3 JCR-VIS 43,290 17,774
Soneri Bank Limited AA- A1+ PACRA 22,788 10,000
Bank Al Habib Limited AAA A1+ PACRA 30,354 9,842
JS Bank Limited AA- A1+ PACRA 20,553 11,892
Silk Bank Limited A- A2 JCR-VIS 5,386 5,386
249,043,351 229,286,933
Islamic
National Bank of Pakistan AAA A1+ PACRA 14,687,889 183,054
Meezan Bank Limited AAA A1+ JCR-VIS 9,978,715 11,520,302
Bank Alfalah Limited AA+ A1+ PACRA 9,292,162 682,220
Dubai Islamic Bank (Pakistan) Limited AA A1+ JCR-VIS 1,227,687 7,801
Albaraka Bank (Pakistan) Limited A A1 PACRA 857,154 63,725
MCB Islamic Bank Limited A A1 PACRA 194,197 658,783
Bank Islamic (Pakistan) Limited A+ A1 PACRA 125,949 1,046,218
Al Baraka Bank (Pakistan) Limited
(Formally Burj Bank Limited) A+ A1 PACRA 20,016 20,016
Faysal Bank Limited AA A1+ PACRA 6,324 6,324
36,393,785 14,200,107
285,437,136 243,487,040

Due to the Company’s long standing business relationships with these counterparties and after giving
due consideration to their strong financial standing, management does not expect non performance by
these counterparties on their obligations to the Company. Accordingly, the credit risk is minimal.
Advances, deposits and other receivables

Advances, deposits and other receivables mainly comprise of advances to employees against salaries,
receivables from related parties and deposits with government entities and financial institution. The
Company has assessed, based on historical experience, available securities against advances to
employees and amounts are paid to counterparty as per agreement, that the expected credit loss
associated with these financial assets is trivial and therefore no impairment allowance is necessary.

132
44.1.2 Liquidity risk
Liquidity risk represents the risk that the Company will encounter difficulties in meeting obligations
associated with financial liabilities. The Company’s approach to manage liquidity is to ensure, as far as
possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and
stressed conditions. For this purpose, the Company has sufficient running finance facilities available
from various commercial and Islamic banks to meet its liquidity requirements. Further, liquidity position
of the Company is closely monitored through budgets, cash flow projections and comparison with
actual results by the Board of Directors. The table below analyses the Company’s financial liabilities into
relevant maturity groupings based on the remaining period at the statement of financial position date to
contractual maturity dates. The amounts disclosed in the table are the contractual undiscounted cash
flows:

2022
Carrying Contractual One year One to More than
amount cash flows or less five years five years
Rupees
Non-derivative financial liabilities
Long term finances - secured 9,286,409,849 12,235,499,849 4,311,495,900 7,924,003,949 –
Short term borrowings 11,034,338,292 12,305,330,011 12,305,330,011 – –
Lease liabilities 2,600,487,231 2,650,734,992 799,389,081 1,851,345,911 –
Accrued profit / interest / mark-up 812,967,857 812,967,857 812,967,857 – –
Trade and other payables 1,710,872,045 1,710,872,045 1,710,872,045 – –
Unclaimed dividend 40,640,932 40,640,932 40,640,932 – –
25,485,716,206 29,756,045,686 19,980,695,826 9,775,349,860 –

2021
Rupees
Long term finances - secured 12,350,572,214 14,771,940,000 4,263,530,000 9,726,850,000 781,560,000
19,125,715,513 22,916,658,078 12,504,990,119 11,096,507,825 781,560,000

44.1.3 Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and
equity prices will affect the Company’s income or the value of its holdings of financial instruments. The
objective of market risk management is to manage and control market risk exposures within acceptable
parameters, while optimizing the return.

i) Foreign currency risk
Foreign currency risk is the risk that the fair value of future cash flows of a financial instrument will
fluctuate because of changes in foreign exchange rates. This exists due to the Company’s exposure
resulting from outstanding import payments, foreign commercial transactions and related interest
payments if any.

Financial liabilities of the Company include Rs. 16.21 million (2021: Rs. 8.82 million) in foreign currencies
which are subject to currency risk exposure. The Company believes that the foreign exchange risk
exposure on financial assets and liabilities is immaterial.

Foreign currency risk management
The Company manages foreign currency risk through due monitoring of the exchange rates, adjusting
net exposure and obtaining forward covers where necessary.

ii) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market interest rates. The Company’s exposure to the risk of changes in market
interest rates relates primarily to the Company’s long-term and short-term financing arrangements at
floating interest rates to meet its business operations and working capital requirements. The effective
interest / mark-up rates for interest / mark-up bearing financial instruments are mentioned in relevant
notes to these unconsolidated financial statements. The interest rate profile of the Company’s
interest‑bearing financial instruments as reported to the management of the Company is as follows:
2022 2021
Financial Financial Financial Financial
asset liability asset liability
Non-derivative financial
instruments Note Rupees Rupees Rupees Rupees
Fixed rate instruments:
Long term financing -
SBP Refinance Scheme 8.1.1 – – – 560,129,192
Lease liabilities – 2,188,247,918 1,678,591,100
– 2,188,247,918 – 2,238,720,292
Variable rate instruments:
Long term finances - secured 8 – 9,286,409,849 – 11,790,443,022
Lease liabilities – 412,239,313 - 425,517,993
Lease receivables 26 – – 69,633,908 -
Short term borrowings 13 – 11,034,338,292 - 3,015,112,876
Cash at bank 32.1 1,780,395 – 1,868,139 -
1,780,395 20,732,987,454 71,502,047 15,231,073,891
1,780,395 22,921,235,372 71,502,047 17,469,794,183

Fair value sensitivity analysis for fixed-rate instruments
The Company does not account for any fixed rate financial assets and liabilities at fair value through profit
or loss. Therefore a change in interest rates at the reporting date would not affect this unconsolidated

Cash flow sensitivity analysis for variable rate instruments
A change of 100 basis points in interest rates at the reporting date would have increased / (decreased)
profit for the year by the amounts shown below. This analysis assumes that all other variables remain
constant. The analysis is performed on the same basis for 2021.
Profit or loss (100 bps)

2022 2021
Increase Decrease Increase Decrease
Rupees
(207,312,071) 207,312,071 (151,595,718) 151,595,718
The sensitivity analysis prepared is not necessarily indicative of the effects on profit for the year and
assets / liabilities of the Company.
134
Interest rate risk management
The Company manages these mismatches through risk management strategies where significant
changes in gap position can be adjusted. The long and short term financing / borrowing and obligation
under finance lease has variable rate pricing that is mostly dependent on Karachi Inter Bank Offered
Rate (“KIBOR”) as indicated in respective notes.
iii) Other price risk

Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market prices (other than those arising from currency risk or interest rate risk),
whether those changes are caused by factors specific to the individual financial instrument or its issuer,
or factors affecting all similar financial instruments traded in the market. The Company is not exposed
to other price risk.

44.2 Fair value measurements of financial instruments
Fair value estimation
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. Underlying the definition of fair
value is the presumption that the Company is a going concern without any intention or requirement
to curtail materially the scale of its operations or to undertake a transaction on adverse terms. The
carrying amounts of all the financial instruments reflected in these unconsolidated financial statements
approximate their fair value. Investments in subsidiary companies and associates are carried at cost
less accumulated impairment loss.

Fair value measurement
The fair value measurement is based on the presumption that the transaction to sell the asset or transfer
the liability takes place either:

– In the principal market for the asset or liability; or
– In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or a liability is measure using the assumptions that market participants would
use when pricing the asset or liability, assuming that market participants at in their economic best
interest.

A fair value measurement of a non-financial asset takes into account a market participants ability to
generate economic benefit by using the asset in its highest and best use or by selling it to another
market participant that would use the asset in its highest and best use.

Fair value hierarchy
IFRS 13, ‘Fair Value Measurements’ requires the Company to classify fair value measurements using a
fair value hierarchy that reflects the significance of the inputs used in making the measurements. The
fair value hierarchy has the following levels:

– Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can
access at the measurement date (level 1).
– Inputs other than quoted prices included within Level 1 that are observable for the asset or
liability, either directly or indirectly (level 2).
– Unobservable inputs for the asset or liability (level 3).

The Company recognizes transfers between levels of the fair value hierarchy at the end of the reporting
period during which the transfers occur. However, there were no transfers amongst levels during the
year.
For details of the valuation techniques and significant unobservable inputs related to determining the
fair value of biological assets, which are classified in level 3 of the fair value hierarchy, refer to note 27.

45. CAPITAL MANAGEMENT
The Board of Directors’ policy is to maintain an efficient capital base so as to maintain investor, creditor and market
confidence and to sustain the future development of its business. The Board of Directors monitors the return on
capital employed, which the Company defines as profit before operation divided by total capital employed. The
Board of Directors also monitors the level of dividends to ordinary shareholders.
The Company’s objectives when managing capital are:

a) to safeguard the entity’s ability to continue as a going concern, so that it can continue to provide returns for
shareholders and benefits for other stakeholders; and

b) to provide an adequate return to shareholders.

The Company manages the capital structure in the context of economic conditions and the risk characteristics of
the underlying assets. In order to maintain or adjust the capital structure, the Company may, for example, adjust
the amount of dividends paid to shareholders, issue new shares, or sell assets to reduce debt.

The Company’s strategy is to ensure compliance with the Prudential Regulations issued by the State Bank of
Pakistan and is in accordance with agreements executed with financial institutions so that the total borrowings to
equity ratio does not exceed the lender covenants. The total borrowings to equity ratio as at 30 September 2022
and 2021 are as follows:
2022 2021
Rupees Rupees
Total debt 21,545,955,312 16,068,106,077
Less: cash and bank balances (289,694,593) (247,319,679)
Net debt 21,256,260,719 15,820,786,398
Total equity 16,905,057,127 14,447,546,469
Total capital employed 38,161,317,846 30,268,332,867

Gearing ratio 56% 52%

Total debt comprises of long term financing from banking companies / financial institutions, lease obligation
towards banks only, short term borrowings and accrued mark-up.

Total equity includes issued, subscribed and paid-up share capital, share premium reserve and accumulated
profits.
136
46. TRANSACTIONS WITH RELATED PARTIES
Related parties comprise of subsidiary companies, associated companies, other related companies, entities
under common directorship, key management personnel and post employment benefit plans. Amounts due from
and due to related parties are shown under respective notes to these unconsolidated financial statements. Other
significant transactions with related parties except those disclosed elsewhere are as follows:
2022 2021
Name of company Relationship Nature of transactions Rupees Rupees
Deharki Sugar Mills Subsidiary Company Short term advances paid 4,865,610,000 1,620,000,000
(Pvt.) Limited (Equity held 100%) Short term advances received 5,865,610,000 –
Mark-up paid on short term advances 72,142,061 145,740,768
Sale of sugarcane 1,418,901,000 1,048,539,359
Purchase of bagasse 399,284,631 544,368,556
Payment made against purchase
of bagasse 414,189,295 322,134,328
Reimbursement on use of
Company’s aircraft 10,836,985 16,022,887
Rent on land acquired on lease 8,585,300 8,585,300
Purchase of agri-inputs 2,382,703 99,541,406
Sale of stores, spare parts and
loose tools 22,439,609 14,092,065
Sale of operating fixed assets 1,750,000 29,369,367
Purchase of operating fixed assets 15,857,080 16,553,472
Purchase of stores, spare parts
and loose tools – 2,086,265
Others 1,676,057 2,941,333

Sadiqabad Power Subsidiary Company Advances for issuance of shares – 395,000
(Pvt.) Limited (Equity held 100%) Shares issued during the year – 6,944,000

Ghotki Power Subsidiary Company Advances for issuance of shares – 365,000
(Pvt.) Limited (Equity held 100%) Shares issued during the year – 7,314,000

JDW Aviation Associated Company Reimbursement of expenses 4,557,417 4,323,538
(Pvt.) Limited (Common directorship) Refund of long term security deposit – 2,990,360

Lahore Flying Club Associated Company Services rendered against
(Guarantee) Limited (Related party) aircraft hangar 767,191 1,764,087

Post employment Other related party Provident fund contribution 259,729,396 223,024,212
benefit plans Payment to recognised
gratuity fund 58,781,330 104,674,839
Short term advances received 250,000,000 185,000,000
Short term advances paid 250,000,000 185,000,000
Mark-up paid on short term advances 3,425,096 1,505,818

Key management Key management Dividend paid 136,734,650 –
personnel Reimbursement of expenses 5,415,829 5,342,790
Consultancy services – 10,670,281

46.1 Detail of compensation to Chief Executive, Executive Directors, Non-Executive Directors and Executives
is disclosed in note 43.
46.2 There is no outstanding balance as at 30 September 2022 (2021: Nil) in respect of above transactions
except as disclosed in respective notes to these unconsolidated financial statements.
46.3 All transactions with related parties are entered into at agreed terms/contractual arrangement duly
approved by the Board of Directors of the Company.

2022 2021
Tons Tons
47. CAPACITY AND PRODUCTION
Sugar
Unit I
- Sugarcane crushed 3,311,789 2,537,605
- Sugar production 336,630 255,396

Unit II

Unit III

47.1 For details of crushing capacity, refer to note 19.1.19.

2022 2021
MWh MWh
Co - Generation Power
Unit II
Installed capacity (based on 8,760 hours) 233,016 233,016
Energy generated 195,649 218,299
Energy delivered 166,201 188,399

Unit III

47.2 Energy delivered to CPPA-G is dependent on the plant availability.

2022 2021
Corporate Farms Zones Acres/Maunds Zones Acres/Maunds
Land (Acres) Punjab & Sindh 24,970 Punjab & Sindh 25,835
Land under cultivation (Acres) Punjab & Sindh 19,712 Punjab & Sindh 20,539
Crop harvested (Maunds) Punjab & Sindh 19,045,523 Punjab & Sindh 17,079,808

47.3
The Company also have harvested 33,939 Maunds of wheat (2021: 39,733), 446 Maunds of Rhode
grass (2021: 31,354 Maunds) and 3,828 Maunds of Mustered (2021: 4,775 Maunds) and no any
Maunds of Rice (2021: 826) during the year.

138
48. CHANGE IN LIABILITIES ARISING FROM FINANCING ACTIVITIES
2022
Equity Liabilities
Accumulated Unclaimed Long term Lease Short term Accrued profit /
profit dividend finances - liabilities borrowings interest /
secured mark-up
Rupees
Balance as at 01 October 2021 13,171,462,931 33,748,830 12,350,572,214 2,104,109,093 3,015,112,876 251,304,750

Changes from financing cash flows:
Loans received during the year – – 1,000,000,000 – 134,041,325,237 –
Payments for lease liabilities – – – (957,555,198) – –
Dividend paid (1,494,416,526) (420,889) – – – –
Interest paid during the year – – – – – (2,575,657,251)
Loan repaid during the year – – (4,094,113,393) – (127,157,522,246) –
(1,494,416,526) (420,889) (3,094,113,393) (957,555,198) 6,883,802,991 (2,575,657,251)
Other changes - liability related:
Interest expense for the year – – – 260,253,949 – 3,143,883,078
Addition in lease liabilities – – – 1,314,109,525 – –
Profit for the year 3,951,927,184 – – – – –
Increase in short term finances – – – – 1,135,422,425 –
Impact of IAS 20 – – 23,388,308 – – –
Amortization of transaction cost – – 6,562,720 – – (6,562,720)
Others – 7,312,991 – (120,430,138) – –
Total liability-related other changes 3,951,927,184 7,312,991 29,951,028 1,453,933,336 1,135,422,425 3,137,320,358

Balance as at 30 September 2022 15,628,973,589 40,640,932 9,286,409,849 2,600,487,231 11,034,338,292 812,967,857

139
140
2021
Equity Liabilities
secured mark-up
Rupees

FINANCIAL

Changes from financing cash flows
Loans received during the year – – 866,666,669 – 123,861,908,679 –
Dividend paid – (194,188) – – – –
– (194,188) (1,992,827,391) (889,296,947) (4,384,760,140) (2,144,894,240)

Other changes - liability related
STATEMENTS

Decrease in short term finances – – – – (1,908,115,470) –
Impact of IAS 20 – – 40,001,514 – – –
Others – – – (51,064,767) – –
Total liability-related other changes 4,874,905,406 – 40,001,514 1,532,931,293 (1,908,115,470) 2,073,639,725

49. NUMBER OF EMPLOYEES
The average and total number of employees are as follows:

2022 2021
Number Number
Average number of employees during the year 7,862 7,753

Total number of employees as at 30 September 5,761 5,646

50. DATE OF AUTHORIZATION FOR ISSUE
These unconsolidated financial statements were authorized for issue on 05 January 2023 by the Board of
Directors of the Company.

51. SUBSEQUENT EVENTS
51.1 Subsequent to year ended 30 September 2022, the Company, with the approval of the Company’s
shareholders in extraordinary general meeting held on November 03, 2022 and in compliance of Section
88 of the Companies Act, 2017 read in conjunction with the Listing Companies (Buy Back of Shares)
Regulations, 2019, accorded to buy back upto to a maximum of its 2,000,000 issued, subscribed
and paid-up ordinary shares through the Pakistan Stock Exchange Limited at the spot/current price
prevailing during purchase period i.e., 11 November 2022 to 02 May 2023 or till such date that the Buy-
back of shares is completed, whichever is earlier. However, the Buy-back of shares has been completed
date 02 January 2023.
51.2 The Board of Directors in their meeting held on 05 January 2023 has proposed final cash dividend for the
year ended 30 September 2022 of Rs. 12.50 (2021: Rs. 10) per share amounting to Rs. 722.208 million
(2021: Rs. 597.766 million) subject to the approval of the Company in the forthcoming annual general
meeting. These financial statements do not include the effect of the above which will be accounted for
in the year in which it is approved.

52. CORRESPONDING FIGURES
Corresponding figures have been re-arranged and re-classified, wherever considered necessary, for the purposes
of comparison and better presentation to comply with the requirements of the accounting and reporting standards
as applicable in Pakistan, however, no significant re-arrangements and reclassification have been made during
the year.

05
CONSOLIDATED
154 Consolidated Statement of Financial Position
156 Consolidated Statement of Profit or Loss
157 Consolidated Statement of Comprehensive Income
158 Consolidated Statement of Cash Flows
159 Consolidated Statement of Changes in Equity
160 Notes to the Consolidated Financial Statements

DIRECTORS’ REPORT
on Consolidated Financial Statements
The Directors are pleased to present the Consolidated Financial Statements of JDW Sugar Mills Limited (“the Holding
Company”), its Subsidiary Companies; Deharki Sugar Mills (Private) Limited, Faruki Pulp Mills Limited, Sadiqabad Power
(Private) Limited and Ghotki Power (Private) Limited (“the Group”) and its Associated Companies; JDW Power (Private)
Limited and Kathai-II Hydro (Private) Limited for the year ended 30 September 2022.
Deharki Sugar Mills (Private) Limited (“DSML”) was incorporated as a Private Limited Company. The Principal activity
of Subsidiary Company is production and sale of crystalline sugar. The Holding Company holds 100% shares of the
Subsidiary Company.
Faruki Pulp Mills Limited (“FPML”) was incorporated as a Public Limited Company, with the primary objective to manufacture
and sale of paper pulp. The Holding Company holds 57.67% shares of the Subsidiary Company. Further FPML has been, for
the considerable number of years, unable to commence its commercial operations and considering this fact management
of subsidiary company has principally decided not to inject further funds in the company as significant capital expenditure
are required. Moreover, keeping in view commercial viability of the plant as well as the substantial accumulated losses the
management of the Subsidiary Company has determined that the company might not be able to realize its assets and
discharge its liabilities in the normal course of business. During the last year, the FPML through a special resolution passed
in its Extraordinary General Meeting held on March 25, 2020 resolved to dispose of its property, plant and equipment either
in parts or in their entirety to prospective buyers after due process, but due to COVID-19 Situation in the country this was
not completed during the current year and the said arrangement was re-approved by the FPML shareholders in its EOGM
held on 13 December 2021. However, subsequent to year end, the management of FPML has initiated the tendering
process for disposal of assets. We are expecting to complete this process in the year 2022-23.
Ghotki Power (Private) Limited (“GPL”) was incorporated on 15 December 2016. The Subsidiary Company will be
engaged in the production of electricity under the expansion program of the Holding Company’s existing bagasse based
Co-Generation Power Plants. The Holding Company holds 100% shares of the Subsidiary Company.
Sadiqabad Power (Private) Limited (“SPL”) was incorporated on 16 December 2016. The Subsidiary Company will be
engaged in the production of electricity under the expansion program of the Holding Company’s existing bagasse based
Co-Generation Power Plants. The Holding Company holds 100% shares of the Subsidiary Company.
JDW Power (Private) Limited (“JDWPL”) is a private limited company incorporated in Pakistan on 08 August 2009 under the
repealed Companies Ordinance, 1984. The principal activity of it is to build, own, operate, and maintain a Co-Generation
Power Plant. The Holding Company holds 47.37% shares of the Associated Company.
The Holding Company acquired the 20% shareholding in Kathai-II Hydro (Private) Limited (“the Associate”) on 12
November 2019. The Associate is a private limited company incorporated in Pakistan on 27 August 2012 under the
repealed Companies Ordinance, 1984. The principal activity of the associate is to generate, distribute and sell electricity.
It is being confirmed that to the best of our knowledge, these consolidated financial statements for the year ended 30
September 2022 give a true and fair view of the assets, liabilities, financial position and financial results of the Group and
are in conformity with approved accounting standards as applicable in Pakistan.
FINANCIAL OVERVIEW
The consolidated financial results are as follows:
(Rs. in Million)
2021-22 2020-21
Gross Revenue 78,923 74,796
Revenue from Contracts with Customers 69,089 65,256
Profit from Operations 9,524 7,283
Profit before Tax 5,285 4,761
Profit after Tax 4,319 4,608
Directors have given their detailed report of affairs of the Holding Company, Subsidiary Companies as well as Associated
Companies in Directors’ report to the shareholders of the Holding Company.
05 January 2023 Chief Executive Director

Lahore
JDW GROUP 145
146
INDEPENDENT AUDITORS’ REPORT
To the members of JDW Sugar Mills Limited
Opinion
We have audited the annexed consolidated financial statements of JDW Sugar Mills Limited and its subsidiaries (“the
Group”), which comprise the consolidated statement of financial position as at 30 September 2022, and the consolidated
statement of profit or loss, the consolidated statement of comprehensive income, the consolidated statement of changes
in equity, the consolidated statement of cash flows for the year then ended, and notes to the consolidated financial
statements, including a summary of significant accounting policies and other explanatory information.
In our opinion, except for the effects of the matter described in the Basis for Qualified Opinion section of our report the
accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position
of the Group as at 30 September 2022 and of its consolidated financial performance and its consolidated cash flows for
the year then ended in accordance with the accounting and reporting standards as applicable in Pakistan.
Basis for Qualified Opinion

Referring to note 8.1.1 and 49 to the consolidated financial statements, the management of the Deharki Sugar Mills
(Private) Limited, a wholly own subsidiary of the Holding Company, (‘DSML’) has obtained long term financing from Bank
of Punjab – Syndicate under Common Term Agreement (“the agreement”) dated January 10 2020. In accordance with the
terms of the agreement, the DSML is required to comply with certain financial covenants. The DSML was in compliance
with all financial covenant except debt service coverage ratio as define in the agreement. Pursuant to non-compliance of
above mentioned covenant contained in the agreement, the DSML has not classified non-current maturity of such loan as
current liability under the requirement of International Accounting Standards 1 ‘Presentation of Financial Statements’ which
constitutes a departure from IFRSs. The DSML’s accounting record indicate that, had management of DSML classified its
long term liabilities as current liabilities pursuant to such breach of covenant, total current liabilities has been increased by
Rs. 1,282 million as at reporting date.
We conducted our audit in accordance with International Standards on Auditing (ISAs) as applicable in Pakistan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated
Financial Statements section of our report. We are independent of the Group in accordance with the International Ethics
Standards Board for Accountants’ Code of Ethics for Professional Accountants as adopted by the Institute of Chartered
Accountants of Pakistan (the Code) and we have fulfilled our other ethical responsibilities in accordance with the Code. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified opinion.
Emphasis of Matters
We draw attention to following matters:
- Refer to note 1.4 to these consolidated financial statements, which describes that intention of Faruki Pulp Mills Limited
– Subsidiary Company to liquidate its property, plant and equipment and other assets and is no longer a going
concern, therefore, the financial statements of Faruki Pulp Mills Limited have been prepared using liquidation basis of
accounting.
- Refer to note 19.1.22 to these consolidated financial statements, which describes the Commission of Inquiry has
highlighted discrepancies with respect to crushing capacity of the Holding Company and standard business practice
of Pakistan sugar industry.


Tel: (92-42) 35940246-7, Fax: (92-42) 35940248
JDW GROUP 147

Our opinion is not modified in respect of above matters.
Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
consolidated financial statements of the current period. These matters were addressed in the context of our audit of the
consolidated 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:
1 Revenue recognition
Refer to notes 4.13 and 35 to these consolidated Our audit procedures, amongst others, included the
• obtained an understanding of the process relating
The Group principally generates revenue from sale of to recording of revenue and testing the design,
crystalline sugar, agriculture produce and electricity. implementation and operating effectiveness of
relevant key internal controls over recording of
We identified revenue recognition as a key audit revenue;
matter because it is one of the key performance
• assessed the appropriateness of the Group’s
indicator of the Group and gives rise to an inherent
accounting policy for recording of revenue
risk of misstatement to meet expectations or targets. and compliance of the policy with International
Financial Reporting Standard 15 (IFRS 15)
Revenue from contract with customers;
• reviewed the management procedures carried
out for evaluation of contractual arrangements
with customers (oral and written) with respect
to identification of each party’s rights regarding
the goods to be transferred and revenue has
been recognized after meeting the conditions of
IFRS 15;
• reviewed a sample of contractual arrangement
entered into by the Group with its customers
and checking the Group’s obligation to transfer
goods to a customer; for which the Group has
received consideration, has been satisfied before
recognition of revenue;
during the year with sales orders, sales invoices,
delivery orders and other relevant underlying
documents;
before and after reporting period and near the
year end with relevant underlying documentation
to assess whether revenue has been recorded in
the appropriate accounting period;
• compared a sample of electricity sales
transactions with energy invoices duly verified by
Central Power Purchasing Agency (Guarantee)
Limited (“CPPA-G”) and assess whether the
revenue has been recorded in the appropriate
accounting period;
• for a sample of invoices, recalculated the invoice
amount based on fixed and variable component
provided by National Electric Power Regulatory
Authority (NEPRA);
148
• scanned for any manual journal entries relating
to sales recorded during and near the year end
which were considered to be material or met
other specific risk based criteria for inspecting
underlying documentation; and
• assessed the adequacy of disclosures in these
consolidated financial statements to be in
2 Valuation of biological assets (standing
sugarcane)
Refer to notes 4.7 & 27 to these consolidated financial Our procedures performed in considering the
statements. appropriateness of the valuation of standing
sugarcane included the following:
Significant judgement and estimates are used in • management’s representation with regards to the
determining the fair value of biological assets. At valuation techniques and fair presentation of the
30 September 2022, the fair value of the standing biological assets were obtained and evaluated;
sugarcane is Rs. 2,853 million which constitutes a
significant balance on the consolidated statement of • critically evaluated the fair value methodology
against criteria in IAS 41 ‘Agriculture’ and IFRS
financial position.
13 ‘Fair Value Measurement’, measurements
and key assumptions applied by management
The value of standing sugarcane is based on the in determining the fair value of the standing
current estimated cane price for the following season sugarcane;
and sucrose content less the estimated cost of
harvesting, transport and other related cost. • examined the professional qualification of
management’s expert and assessed the
Significant judgement is required in estimating the independence, competence and experience of
expected cane yield, the maturity of the cane and the the management’s expert in the field;
estimated sucrose content for the various operating • performed sensitivities to assess the impact of
locations and is also considered subjective since it changes in the significant inputs;
is based on executive management, its experience, • reviewed the principles used in the valuation
expectations and relevant current external factors. of standing sugarcane and analysed the key
assumptions used in the valuation model;
Given the value of the biological assets, together
• detailed testing on the key inputs into the
with the significant judgement and estimates that are
standing sugarcane valuation model including
required in determining the fair value, the valuation of
estimated yields, estimated sucrose content and
biological assets is considered a key audit matter. forecast price to confirm the validity, accuracy
and completeness of the data by comparing the
data to market and other external data where
applicable;
• compared the prior year’s estimated yields,
estimated sucrose content and forecast price to
the current year actuals attained to assess the
reasonableness and accuracy of management’
estimates;
• reviewed the formulae as per the model and
recalculating for mathematical accuracy; and
• evaluated the adequacy of the consolidated
financial statements disclosures, including
disclosures of key assumptions, judgments and
sensitivities to ensure that they are in compliance
with the IAS 41 and IFRS 13.
JDW GROUP 149

3 Recognition of deferred tax assets relating to
Minimum Turnover Tax and Alternative Corporate
Tax (tax credits)
Refer to notes 4.10.2 & 10 to these consolidated Our audit procedures amongst others included the
• obtained understanding of management process
Under International Accounting Standard 12 “Income of preparation of taxable income and liability
Taxes”, the Group is required to review recoverability of forecast and deferred tax calculation;
the deferred tax assets recognized in the consolidated
statement of financial position at each reporting • tested management’s computation of un-used
period. tax credits for which deferred tax assets has been
recognized;
Recognition of deferred tax assets is dependent on • analyzed the requirements of Income Tax
management’s estimate of availability of sufficient Ordinance, 2001, in relation to above and
future taxable profits against which carried forward considered the ageing analysis, expiry periods of
un-used tax credits can be utilized. The future taxable relevant deferred tax assets and tax rates enacted
profits are based on approved projections. in consultation with our internal tax professionals;
• assessed the reasonableness of assumptions
This estimation involves a degree of uncertainty and such as growth rate, future revenue and costs
requires judgement in relation to the future cash flows and other relevant information for assessing
and also involves assessment of timing of reversal of the quality of Group’s forecasting process in
un-used tax credits. determining the future taxable profits;
• tested mathematical accuracy of future
As at 30 September 2022, the Group has recognized projections and the use of appropriate tax rate
deferred tax assets amounting to Rs. 2,189 million applicable on temporary differences; and
mainly on account of un-used tax credits.
• assessed the appropriateness of management’s
accounting for deferred taxes and the accuracy
We considered this as a key audit matter due to the
of related disclosures in accordance with the
inherent uncertainty in forecasting the amount and
applicable accounting and reporting standards.
timing of future taxable profits and the reversal of
deductible temporary differences and management
judgement regarding assumptions used in this area.
4 Valuation of stock-in-trade
Refer to note 29 to the consolidated financial We assessed the appropriateness of management
statements. assumptions applied in calculating the value of stock-
in-trade and validated the valuation by taking following
Stock-in-trade at the reporting date mainly included steps:
bagasse and finished goods (sugar bags). • assessed whether the Group’s accounting
policy for inventory valuation is in line with
The value of stock-in-trade at the reporting date the International Accounting Standards 2
aggregated to Rs. 17,918 million representing 58% of “Inventories”;
the Group’s total current assets.
• attended inventory count at the year-end and
The valuation of finished goods at cost has different reconciled physical inventory with inventory lists
components, which includes judgment and provided to ensure completeness of data;
assumptions in relation to the allocation of labour • assessed historical cost recorded in inventory
and other various overheads incurred in bringing the valuation by checking purchase invoices on
inventories to their present location and conditions. sample basis;
• re-calculated the value of stock in trade by
Judgment has also been exercised by the allocating the fixed and variable overheads and
management in determining the net realisable value of reviewed the adequacy of costing methodology;
finished goods and estimating the stock of bagasse.
• performed net realisable value test to assess
whether cost of inventories exceeded its net
We identified this matter as key in our audit due to the
realisable value by detailed review of subsequent
judgment and assumptions applied by the Group in
sale invoices; and
determining the cost and net realisable value of stock-
in-trade at the reporting date. • assessed the adequacy of disclosures in these
consolidated financial statements to be in
150
5 Financing obligations and compliance with
related covenant requirements
Refer notes 8 & 13 to these consolidated financial Our audit procedures in relation to verification of long
statements. and short term financing mainly included the following:
• reviewed terms and conditions of financing
At the reporting date, the Group has outstanding agreements entered into by the Group with
financing facilities (both long and short term) various banks and financial institutions;
aggregating Rs. 26,125 million which constitutes 71%
of total liabilities of the Group. • obtained direct balance confirmations from banks
and financial institutions and verified outstanding
The Group’s key operating / performance indicators obligations and certain other information from
such confirmations;
including liquidity, gearing and finance cost are
directly influenced by the additions to the portfolio of • reviewed maturity analysis of financing to
financing. ascertain the classification of financing as per
their remaining maturities;
Further, new financing arrangements entail additional • assessed the status of compliance with
financial and non-financial covenants for the Group to financing covenants and also inquired from the
comply with. management with regard to their ability to ensure
future compliance with the covenants;
The significance level of financing facilities obtained
• assessed the adequacy of disclosures made
along with the sensitivity of compliance with in respect of the long and short term financing
underlying financing covenants are considered a key / borrowings in these consolidated financial
area of focus during the audit and therefore, we have statements; and
identified this as a key audit matter.
• checked on test basis the calculations of finance
cost recognised in the consolidated statement of
profit or loss.
6 Contingencies
Refer to note 19.1 to these consolidated financial Our audit procedures in this area included, amongst
statements. others, the following:
• obtained an understanding of the Group’s
The Group is exposed to different laws, regulations processes and controls over litigations through
and interpretations thereof and hence, there is a meeting with the management, review of the
litigation risk. minutes of the Board of Directors;
Given the nature and amounts involved in such cases • reviewing the correspondence of the Group
and the appellate forums at which these are pending, with the relevant authorities and legal advisors
including judgments or orders passed by the
the ultimate outcome and the resultant accounting
competent authorities;
in the consolidated financial statements is subject to
significant judgement, which can change over time as • obtained and reviewed direct confirmations from
new facts emerge and each legal case progresses. For the Group’s external advisors for their views on
such reasons, we have considered the contingencies the legal position of the Group in relation to the
as a key audit matter. contingent matters;
• involved our internal tax professionals to assess
management’s conclusions on contingent tax
matters; and
• evaluated the adequacy of disclosures made in
respect of these contingencies in in accordance
with the applicable accounting and reporting
standards.
JDW GROUP 151

Information Other than the Consolidated and Unconsolidated Financial Statements and Auditor’s Report
Thereon
Management is responsible for the other information. The other information comprises the information included in the
annual report for the year ended 30 September 2022, but does not include the consolidated and unconsolidated financial
statements and our auditor’s report thereon.
Our opinion on the consolidated financial statements does not cover the other information and we do not express any form
of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or
our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we
are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and Board of Directors for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance
with accounting and reporting standards as applicable in Pakistan and Companies Act, 2017 and for such internal control
as management determines is necessary to enable the preparation of consolidated financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern
basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic
alternative but to do so.
The Board of Directors is responsible for overseeing the Group’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs
as applicable in Pakistan will always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with ISAs as applicable in Pakistan, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by management.
152
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated
financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based
on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may
cause the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the
disclosures, and whether the consolidated financial statements represent the underlying transactions and events
in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the consolidated financial statements. We are responsible for
the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with the Board of Directors regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the Board of Directors with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear
on our independence, and where applicable, related safeguards.
From the matters communicated with the Board of Directors, we determine those matters that were of most significance in
the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in
extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
The engagement partner on the audit resulting in this independent auditor’s report is Muhammad Ali Rafique.

UDIN: AR202210098T9GA5kSBt
JDW GROUP 153

CONSOLIDATED STATEMENT OF
FINANCIAL POSITION
Note 2022 2021
Rupees Rupees
EQUITY AND LIABILITIES

SHARE CAPITAL AND RESERVES

Share capital 6 597,766,610 597,766,610
Share premium reserve 7 678,316,928 678,316,928
Accumulated profit 17,521,680,614 14,693,902,094
Equity attributable to owners of the Holding Company 18,797,764,152 15,969,985,632

Non - controlling interest 34 374,672,247 376,074,277
19,172,436,399 16,346,059,909
NON-CURRENT LIABILITIES

Lease liabilities 9 1,846,353,605 1,313,728,626
Deferred taxation 10 380,933,944 114,896,886
Retirement benefits 11 23,650,196 55,987,252
Deferred income - Government grant 12 – 865,645
9,937,641,045 12,509,685,590
CURRENT LIABILITIES
Short term borrowings 13 14,830,264,117 3,433,591,564

Current portion of non-current liabilities 14 4,385,280,678 4,633,829,429
Trade and other payables 15 3,427,848,539 2,364,582,644
Advances from customers 16 3,291,833,080 1,408,574,415
Unclaimed dividend 17 40,640,932 33,748,830
Accrued profit / interest / mark-up 18 1,043,339,635 308,968,644
27,019,206,981 12,183,295,526
Liabilities classified as held for sale 33 36,593,732 37,417,291
27,055,800,713 12,220,712,817
CONTINGENCIES AND COMMITMENTS 19

56,165,878,157 41,076,458,316

The annexed notes from 1 to 56 form an integral part of these consolidated financial statements.
Chief Financial Officer
154
As at 30 September 2022
Note 2022 2021

Rupees Rupees
ASSETS

NON-CURRENT ASSETS
Property, plant and equipment 20 22,913,520,193 23,377,311,554

Right-of-use assets 21 1,623,707,863 1,836,163,006
Investment property 22 185,854,012 185,854,012
Intangibles 23 610,702,115 612,747,625
Long term investments 24 – –
Long term deposits 25 97,494,818 95,250,741
25,431,279,001 26,107,326,938

CURRENT ASSETS
Right-of-use assets 21 730,292,317 43,462,361

Short term investments 24.2 – –
Lease receivables 26 – 69,633,908
Biological assets 27 2,855,032,666 2,335,200,206
Stores, spare parts and loose tools 28 2,217,524,718 1,649,257,253
Stock-in-trade 29 17,918,960,986 3,495,317,580
Trade receivables 30 3,920,509,349 4,496,926,781
Advances, deposits, prepayments and other receivables 31 1,106,464,947 1,256,355,084
Advance income tax - net 596,663,748 386,597,266
Cash and bank balances 32 440,945,386 283,941,075
29,786,394,117 14,016,691,514
Assets classified as held for sale 33 948,205,039 952,439,864
30,734,599,156 14,969,131,378

56,165,878,157 41,076,458,316
JDW GROUP 155

PROFIT OR LOSS
Note 2022 2021
Rupees Rupees
Continuing operations:
Gross revenue 78,922,981,038 74,795,659,428
Sales tax and commission (9,833,936,218) (9,539,903,645)
Revenue from contracts with customers 35 69,089,044,820 65,255,755,783
Cost of revenue 36 (58,156,652,078) (53,729,963,559)
Gross profit 10,932,392,742 11,525,792,224

Administrative expenses 37 (2,875,576,418) (2,589,772,225)
Selling expenses 38 (63,394,544) (145,038,749)
Other income 39 1,940,773,445 2,218,137,777
Other expenses 40 (410,247,961) (3,726,228,216)
(1,408,445,478) (4,242,901,413)
Profit from operations 9,523,947,264 7,282,890,811

Share of loss of associate 24.1 – –
Finance cost 41 (4,238,507,133) (2,522,145,814)
Taxation 42 (962,605,454) (141,924,964)
Profit from continuing operations 4,322,834,677 4,618,820,033

Discontinued operations:
Loss from discontinued operations – net of tax 43.1 (3,411,266) (10,487,041)

Attributable to:
Owners of the Holding Company 4,320,825,441 4,612,643,166
Non - controlling interest 43.2 (1,402,030) (4,310,174)
4,319,423,411 4,608,332,992
Earnings per share - basic and diluted

Continuing operations 72.32 77.27
Discontinued operations (0.03) (0.10)
Attributable to owners of the Holding Company 44 72.29 77.17


156
COMPREHENSIVE INCOME
Note 2022 2021
Rupees Rupees

Other comprehensive income / (loss) - net of tax

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

Remeasurements of retirement benefits 11.4 2,044,186 (4,775,791)
Related deferred tax charge for the year 10.3 (674,581) 1,384,979
1,369,605 (3,390,812)
Total comprehensive income for the year 4,320,793,016 4,604,942,180

Attributable to:
Owners of the Holding Company 4,322,195,046 4,609,252,354
Non - controlling interest 43.2 (1,402,030) (4,310,174)
4,320,793,016 4,604,942,180

JDW GROUP 157

CASH FLOWS
Note 2022 2021
Rupees Rupees
CASH FLOWS FROM OPERATING ACTIVITIES

Cash (used in) / generated from operations 45 (580,992,985) 11,470,250,706

Taxes paid (906,432,043) (1,192,605,185)
Staff retirement benefits paid (326,796,468) (237,187,490)
Interest income received 630,526,856 390,600,832
Long term deposits (2,244,078) (34,275,044)
Workers’ Profit Participation Fund paid 15.3 (328,660,801) (160,656,876)
Workers’ Welfare Fund paid 15.4 (21,994,389) (55,128,962)
(955,600,923) (1,289,252,725)
Net cash (used in) / generated from operating activities (1,536,593,908) 10,180,997,981

CASH FLOWS FROM INVESTING ACTIVITIES

Capital expenditure (1,250,581,735) (669,598,828)
Right-of-use assets 655,711,065 1,507,655
Proceeds from insurance claim against loss of bagasse, crane & buildings 24,541,000 –
Proceeds from disposal of operating fixed assets 20.1.3 138,454,557 65,846,167
Net cash used in investing activities (431,875,113) (602,245,006)

CASH FLOWS FROM FINANCING ACTIVITIES

Long term finances - net (3,581,326,137) (1,931,586,596)
Short term borrowings - net 10,444,813,652 (2,082,957,755)
Financial charges paid as:
- finance cost (3,234,379,113) (2,545,087,957)
- interest on lease liability (261,513,480) (178,103,402)
Principal portion of lease liability paid (699,143,076) (711,193,545)
Dividend paid (1,494,837,415) (194,188)
Net cash generated from/(used in) financing activities 52 1,173,614,431 (7,449,123,443)
Net (decrease) / increase in cash and cash equivalents (794,854,590) 2,129,629,532

Cash and cash equivalents at beginning of the year (1,406,116,249) (3,535,745,781)
Cash and cash equivalents at end of the year (2,200,970,839) (1,406,116,249)
Cash and cash equivalents comprise of the following:

- Cash and bank balances 32 440,945,386 283,941,075
- Running / Morabaha / Karobar / Musharakah finances 13.2 & 13.5 (2,641,916,225) (1,690,057,324)
(2,200,970,839) (1,406,116,249)

158
Reserves
Equity
Capital Revenue attributable to
Share Share Accumulated Total owners of the Non-controlling Total
capital premium profit reserves Holding Company interest equity
Rupees Rupees Rupees Rupees Rupees Rupees Rupees

Balance as at 01 October 2020 597,766,610 678,316,928 10,084,649,740 10,762,966,668 11,360,733,278 380,384,451 11,741,117,729

Profit for the year – – 4,612,643,166 4,612,643,166 4,612,643,166 (4,310,174) 4,608,332,992
Other comprehensive loss for the year – – (3,390,812) (3,390,812) (3,390,812) – (3,390,812)
– – 4,609,252,354 4,609,252,354 4,609,252,354 (4,310,174) 4,604,942,180
Balance as at 30 September 2021 597,766,610 678,316,928 14,693,902,094 15,372,219,022 15,969,985,632 376,074,277 16,346,059,909

Profit for the year – – 4,320,825,441 4,320,825,441 4,320,825,441 (1,402,030) 4,319,423,411

CHANGES IN EQUITY
Other comprehensive income for the year – – 1,369,605 1,369,605 1,369,605 – 1,369,605
– – 4,322,195,046 4,322,195,046 4,322,195,046 (1,402,030) 4,320,793,016
Transactions with owners of Holding Company
recorded directly in equity
Final cash dividend @ Rs. 10 per share
for the year ended 30 September 2021 – – (597,766,610) (597,766,610) (597,766,610) – (597,766,610)
Interim cash dividend @ Rs. 7.50 per share
for the half year ended 31 March 2022 – – (448,324,958) (448,324,958) (448,324,958) – (448,324,958)
Interim cash dividend @ Rs. 7.50 per share
for the nine month ended 30 June 2022 – – (448,324,958) (448,324,958) (448,324,958) – (448,324,958)
– – (1,494,416,526) (1,494,416,526) (1,494,416,526) – (1,494,416,526)
Balance as at 30 September 2022 597,766,610 678,316,928 17,521,680,614 18,199,997,542 18,797,764,152 374,672,247 19,172,436,399

JDW GROUP
159
NOTES TO THE CONSOLIDATED
1. CORPORATE AND GENERAL INFORMATION

1.1 The Group consists of the Holding Company and its Subsidiary Companies.
2022 2021
Holding percentage
Holding Company
Subsidiaries:
- Deharki Sugar Mills (Private) Limited (“DSML”) 100% 100%
- Ghotki Power (Private) Limited (“GPL”) 100% 100%
- Sadiqabad Power (Private) Limited (“SPL”) 100% 100%
- Faruki Pulp Mills Limited (“FPML”) 57.67% 57.67%

Associates:
- JDW Power (Private) Limited (“JDWPL”) 47.37% 47.37%
- Kathai-II Hydro (Private) Limited (“KHL”) 20% 20%
JDW Sugar Mills Limited (“the Holding Company”) was incorporated in Pakistan on 31 May 1990 as a
private limited company and was subsequently converted into a public limited company on 24 August
1991. The shares of the Holding Company are listed on the Pakistan Stock Exchange Limited. The principal
activities of the Holding Company are production and sale of crystalline sugar including its by-products
i.e. molasses, bagasse and mud, generation of electricity and managing corporate farms.
The geographical locations and addresses of the Holding Company’s business units, including production
facilities are as under:
– Head office and registered office: 17 - Abid Majeed Road, Lahore Cantonment, Lahore, Pakistan
– Unit-I: Mauza Shirin, Jamal Din Wali, District Rahim Yar Khan, Punjab
– Unit-II: Machi Goth, Sadiqabad, District Rahim Yar Khan, Punjab
– Unit-III: Village Laluwali, District Ghotki, Sindh
– Corporate farms - Punjab Zone
– Corporate farms - Sindh Zone
The Holding Company has executed Energy Purchase Agreements (“EPA”) on 20 March 2014 for thirty
years with National Transmission & Despatch Company Limited (“NTDC”) through the Central Power
Purchasing Agency (Guarantee) Limited (“(‘CPPA-G’ and also referred to as “the Purchaser’)”) for its
Bagasse Based Co-Generation Power Plants (“Co-Generation Power”) at Unit-II, Sadiqabad, District
Rahim Yar Khan, Punjab and Unit-III, District Ghotki, Sindh.
On February 12, 2021, the Holding Company entered into a Novation Agreement to the EPA with NTDC
and CPPA-G, whereby, NTDC irrevocably transferred all of its rights, obligations and liabilities under the
Energy Purchase Agreement (‘EPA’) to CPPA-G and thereafter, NTDC ceased to be a party to the EPA, and
CPPA-G became a party to the EPA in place of NTDC. Further, on the same day, the Holding Company
entered into the EPA Amendment Agreement, as referred to note 1.2.
The 26.60 MW power plant at Unit-II achieved Commercial Operations Date (“COD”) on 12 June 2014
while the 26.83 MW power plant at Unit-III achieved COD on 03 October 2014 after completing all
independent testing and certification requirements and commenced supplying renewable electricity to
the national grid. Further, the Holding Company’s Co-Generation Power Plants are the first to materialize
under National Electric Power Regulatory Authority’s (“NEPRA”) upfront bagasse tariff.
1.2 Amendment to the Energy Purchase Agreement (EPA)

The Holding Company in the larger national interest and sustainability of the power sector, voluntarily
agreed to alter its existing contractual arrangements with the CPPA-G for the sale of electricity. In this
respect, the Holding Company entered into a “Master Agreement” and an “EPA Amendment Agreement”
(hereinafter referred to as the ‘Agreements’) on February 12, 2021.
160
Pursuant to the significant terms of these Agreements, the Holding Company will receive its outstanding
receivables amounting to Rs 2,041.979 million due from CPPA-G as on November 30, 2020 in two
installments. Accordingly, the Holding Company received Rs. 816.833 million as the 1st installment (40%)
on June 04, 2021 and second instalment of 60% of the aforementioned outstanding amount was received
on November 29, 2021. These instalments comprised of 1/3rd cash, 1/3rd in the form of tradeable Ijarah
Sukuk, and 1/3rd in the form of tradeable Pakistan Investment Bonds (PIBs). Further, the Holding Company
has provided discounts on insurance, Operations & Maintenance and return on equity in tariff.
Moreover, if the Holding Company operates above the annual 45% plant factor (the “Average PF”) in a
year, the CPPA-G shall pay 100% variable energy payments and 30% of fixed energy payment for energy
dispatched above the Average PF. If below the Average PF, the CPPA-G shall pay monthly energy payment
in accordance with clause 3.1.2 of the EPA Amendment Agreement. Both above arrangement shall remain
effective for every five year period starting from COD, after which a fresh reset shall be done to restart the
new five year period.
In addition to above, delayed payment rate’ as referred in note 30.2 of these consolidated financial
statements has been amended to for all future invoices (a) for the first sixty (60) days, 3MK plus two
percent per annum; (b) for any period thereafter sixty (60) days, 3MK plus four-point five percent per
annum and each calculated for the actual number of days for which the relevant amount remains unpaid.
Further, for all invoices, CPPA-G shall ensure that payments follow the EPA mandated FIFO payment
principle.
Upon the EPA Amendment becoming effective, CPPA-G and the Holding Company shall jointly proceed
to file application for disposal of pending litigation before the Courts in relation to the matter in respect of
the EPA. For details, refer to note 30.2.1
1.3 Deharki Sugar Mills (Private) Limited – “DSML” (“the Subsidiary Company”) having financial year ended
30 September 2022 was incorporated in Pakistan on 14 July 2010 as a Private Limited Company. The
principal activity of DSML is manufacturing and sale of crystalline sugar. Geographical location and
addresses of all business units are as follows:
• Head office / registered office: 17-Abid Majeed Road, Lahore Cantonment, Lahore, Pakistan;
• Manufacturing unit: KLP Road, Mauza Kamoo Shaheed, Taluka Ubauro, Mirpur Mathelo, Ghotki,
Sindh. and
• Karachi Office: Office No.4, 12th Floor Bahria Town Tower, Karachi.
1.4 Faruki Pulp Mills Limited – “FPML” (“the Subsidiary Company”) having financial year ended 30 September
2022 was incorporated in Pakistan on 20 October 1991 as a Public Limited Company. FPML will be
engaged in the manufacture and sale of paper pulp. Geographical location and addresses of all business
units are as follows:
• Head office / registered office: 14/4- Abid Majeed Road Lahore Cantt, Pakistan.; and
• Production facility is situated at 20 km from Gujrat, Sargodha Road, Mangowal, Punjab.
FPML has been unable to commence its commercial operations till date. The trial runs conducted over the
years, identified significant additional capital expenditure requirements to make the plant commercially
viable.
Keeping in view the commercial viability of the plant and substantial accumulated losses, the management
of FPML believes that it may not be able to realize its assets and discharge its liabilities in the normal
course of business, and there does not exist any realistic basis to prepare these financial statements on a
going concern basis (for details refer to note 23.1.2). Accordingly, separate financial statements of FPML
have been prepared on non-going concern basis. As at 30 September 2022, the Holding Company’s
share in the net assets of FPML is Rs. 498.59 million (2021: Rs. 497.19 million). The financial statements
of the Group have been prepared on a going concern basis.
Moreover, FPML through an extraordinary general meeting held on 25 March 2020, resolved to dispose
of its property, plant and equipment either in parts or in their entirety to the prospective buyers after
due process. As a result, the Group’s operations have been divided into Continuing and Discontinued
JDW GROUP 161

operations in accordance with the requirements of International Financial Reporting Standard (IFRS)
5, “Non-current Assets Held for Sale and Discontinued Operations”. Paper Pulp business have been
classified as Discontinued operations (for details, refer to note 33). Continuing operations include Sugar,
Co-Generation Power and Corporate Farms business.
1.5 Sadiqabad Power (Private) Limited - “SPL” (“the Subsidiary Company”) having financial year ended
30 September 2022 was incorporated in Pakistan on 16 December 2016. SPL will be engaged in the
production of electricity under the expansion program of the Holding Company’s existing bagasse based
Co-Generation Power Plants. Geographical location and addresses of all business units are as follows:
• Head office / registered office: 17-Abid Majeed Road, Lahore Cantonment, Lahore, Pakistan and
• Generation Facility is situated at Machi Goth, Sadiqabad, District Rahim Yar Khan.
1.6 Ghotki Power (Private) Limited - “GPL” (“the Subsidiary Company”) having financial year ended 30
September 2022 was incorporated in Pakistan on 15 December 2016. GPL will be engaged in the
production of electricity under the expansion program of the Holding Company’s existing bagasse based
Co-Generation Power Plants. Geographical location and addresses of all business units are as follows:
• Head office / registered office: 17-Abid Majeed Road, Lahore Cantonment, Lahore, Pakistan; and
• Generation Facility is situated at Village Laluwali, District Ghotki.
1.7 JDW Power (Private) Limited (“the associate”) having financial year ended 30 June 2022 is a private
limited company incorporated in Pakistan on August 08, 2009 under the repealed Companies Ordinance,
1984. The principal activity of it is to build, own, operate, and maintain a co-generation power plant. The
registered office of the associate is situated at 17-Abid Majeed Road, Lahore Cantt. (for details, refer to
note 24.2)
1.8 Kathai-II Hydro (Private) Limited – “KHL” (“the associate”) having financial year ended 30 June 2022 is
a private limited company incorporated in Pakistan on August 27, 2012 under the repealed Companies
Ordinance, 1984. The Principal activity of KHL is to generate, distribute and sell electricity. Geographical
location and addresses of all business units are as follows:
• Head office / registered office of KHL is situated at 300 Main Boulevard, Phase 6, DHA, Lahore; and
• Production unit is located on the Kathai Nullah in Azad Jammu & Kashmir (“AJK”) about 50 km east
of Muzaffarabad.
2. BASIS OF PREPARATION
2.1 Statement of compliance
These consolidated financial statements have been prepared in accordance with the accounting and
reporting standards as applicable in Pakistan. The accounting and reporting standards applicable in
Pakistan comprise of:
– International Financial Reporting Standards (IFRSs) issued by the International Accounting Standards
Board (IASB) as notified under the Companies Act, 2017;
– Islamic Financial Accounting Standards (IFASs) issued by the Institute of Chartered Accountants of
Pakistan as notified under the Companies Act, 2017; and
– Provisions of and directives issued under the Companies Act, 2017.
Where provisions of and directives issued under the Companies Act, 2017 differ from the IFRSs or IFASs,
the provisions of and directives issued under the Companies Act, 2017 have been followed.
2.2 Basis of measurement

These consolidated financial statements have been prepared under the historical cost convention except
for certain items as disclosed in the relevant accounting policies below.
2.3 Functional and presentation currency

These consolidated financial statements are presented in Pakistani Rupees (Rs. / Rupees) which is the
Group’s functional currency. All amounts have been rounded off to the nearest of Rs. / Rupees, unless
otherwise stated.
162
3. KEY JUDGMENTS AND ESTIMATES
The preparation of these consolidated financial statements in conformity with the accounting and reporting
standards as applicable in Pakistan requires management to exercise judgments, make estimates and
assumptions that affect the application of policies and reported amounts of assets, liabilities, income and
expenses.
The estimates and associated assumptions are based on historical experience and various other factors that are
believed to be reasonable under circumstances, and the results of which form the basis for making judgment
about carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may
differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. The revisions to accounting
estimates (if any) are recognised in the period in which the estimate is revised if the revision affects only that
period or in the period of the revision and future periods if the revision affects both current and future periods.
The areas involving a high degree of judgments or complexity, or areas where assumptions and estimates are
significant to these consolidated financial statements, are documented in the following accounting policies and
notes, and relate primarily to:
– Useful lives, residual values and depreciation method of operating fixed assets - note 4.3
– Useful lives, residual values and amortization method of intangible assets - note 4.6
– Fair value of biological assets - note 4.7 & 27
– Provision for impairment of inventories - note 4.8
– Current income tax expense, provision for current tax and recognition of deferred tax asset (for carried
forward tax losses and tax credits) - note 4.10
– Obligation of defined benefit obligation - note 4.11 & 11
– Estimation of provisions - note 4.17
– Estimation of contingent liabilities - note 4.18
– Expected credit losses of certain financial assets under IFRS 9 note - 4.20
– Impairment loss of non-financial assets other than inventories and deferred tax assets - note 4.21
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

The consolidated financial statements include the financial statements of the Holding Company and its
subsidiaries. The accounting policies set out below have been applied consistently to all periods presented
in these consolidated financial statements, and have been applied consistently by Group companies.
4.1.1 Subsidiaries
Subsidiaries are those entities in which the Holding Company directly or indirectly controls, beneficially
owns or holds more than 50 percent of its voting securities or otherwise has power to elect and appoint
more than 50 percent of its directors. The financial statements of subsidiaries are included in these
consolidated financial statements from the date control commences.
The financial statements of the subsidiaries are consolidated on a line-by-line basis and the carrying value
of investment held by the Holding Company is eliminated against the Holding Company’s share in paid up
capital of the subsidiaries. The Group applies uniform accounting policies for like transactions and events
in similar circumstances except where specified otherwise.
Non-controlling interests are that part of net results of the operations and of net assets of Subsidiary
Companies attributable to interest which are not owned by the Holding Company. Changes in the Holding
Company’s interest in the subsidiaries that do not result in a loss of control are accounted for as equity
transactions. Non-controlling interests are presented as separate item in these consolidated financial
statements. Non-controlling interest is measured at proportionate share of identifiable net assets at the
time of acquisition.
JDW GROUP 163

Intercompany transactions, balances and unrealised gains on transactions between group companies
are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an
impairment of the transferred asset.
4.1.2 Associates
Associates are all entities over which the Group has significant influence but not control or joint control.
This is generally the case where the Group holds between 20% to 50% of the voting rights. Investments
in associates are accounted for using the equity method of accounting, after initially being recognised at
cost.
Under the equity method of accounting, the investments are initially recognised at cost and adjusted
thereafter to recognise the Group’s share of the post-acquisition profits or losses of the investee in
consolidated statement of profit or loss, and the Group’s share of movements in other comprehensive
income of the investee in consolidated statement of comprehensive income. Dividends received or
receivable from associates are recognised as a reduction in the carrying amount of the investment.
When the Group’s share of losses in an equity-accounted investment equals or exceeds its interest in the
entity, the Group does not recognise additional losses unless the entity has incurred legal or constructive
obligations or made payments on behalf of the associate.
If the associate subsequently reports profits, the Group resumes recognising its share of those profits only
after its share of the profits equals the share of losses not recognised.
Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the
Group’s interest in these entities. Unrealised losses are also eliminated unless the transaction provides
evidence of an impairment of the asset transferred.
Associates, which the Group intends to dispose off within twelve months of the reporting date are not
accounted for under the equity method and are shown under non-current assets held for sale at the lower
of carrying amount and fair value less cost to sell.
The carrying amount of equity-accounted investments is tested for impairment in accordance with the
policy described in note 4.21.
4.2 Disposal group held for sale and discontinued operations

Disposal group comprising assets and liabilities, are classified as held for sale if it is highly probable that
they will be recovered primarily through sale rather than through continuing use.
Disposal group classified as held for sale are presented separately and measured at the lower of their
carrying amounts immediately prior to their classification as held for sale and their fair value less costs to
sell. However, some held for sale assets such as financial assets or deferred tax assets, continue to be
measured in accordance with the Group’s relevant accounting policy for those assets. Once classified as
held for sale, the assets are not subject to depreciation or amortization.
Additional disclosures are provided in note 33. All other notes to the consolidated financial statements
include amounts for continuing operations, unless indicated otherwise.
4.3 Property, plant and equipment

Items of property, plant and equipment other than freehold land and capital work in progress are measured
at cost less accumulated depreciation and impairment loss (if any).
Freehold land and capital work in progress are stated at cost less any impairment loss (if any). Cost
comprises purchase price, including import duties and non-refundable purchase taxes, after deducting
trade discounts and rebates, and includes other costs directly attributable to the acquisition or construction,
erection and installation. Cost in relation to certain items in operating fixed assets and capital work-in-
progress, signifies historical cost, borrowing cost (as referred to note 4.14) and exchange differences on
borrowings (if any).
164
Major stores, spare parts and loose tools held for capital expenditure qualify as property, plant and
equipment when the Group expects to use them for more than one year. Transfers are made to operating
fixed assets category as and when such items are available for use.
Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow to the
Group and the cost of the item can be measured reliably. Major repairs and improvements are capitalized.
All other repair and maintenance costs are charged to the consolidated statement of profit or loss during
the year in which they are incurred.
Depreciation is charged to the consolidated statement of profit or loss so as to write off the cost or carrying
amount of assets over their estimated useful lives, using reducing balance method at rates specified in
note 20.1 except that straight-line method is used for assets related to corporate farms segment. However,
sometimes, the future economic benefits embodied in an asset are absorbed in producing other assets.
In this case, the depreciation charge constitutes part of the cost of the other asset and is included in its
carrying amount.
During the year, the management, has revised the estimate in respect of useful life of assets related
to corporate farms segment keeping in consideration the class of assets and assessed useful life of
these assets. The management believed that the said change in estimate reflect more accurately to the
expected pattern of consumption of the future economic benefits embodied in these assets. The revision
was accounted for prospectively as a change in accounting estimate. Such change in estimate has not
significant impact the consolidated financial statements for the year.
Sugarcane roots (bearer plants) are stated at cost less accumulated depreciation and accumulated
impairment losses (if any). Costs capitalized to sugarcane roots include preparing the land, maintaining
a source of seed cane, planting the seed cane and costs related to establishing new area under cane.
Depreciation of bearer plants commences when they are ready for their intended use. Costs incurred for
infilling including block infilling are generally recognized in the consolidated statement of profit or loss
unless there is a significant increase in the yield of the sections, in which case such costs are capitalized
and depreciated over the remaining useful life of the respective fields. Depreciation on bearer plants is
recognized so as to write off its cost less residual values over useful lives, using the straight-line method
at rate as specified in note 20.1
Depreciation on additions is charged from the date when the asset is available for use, while no
depreciation is charged when an asset is derecognised upon disposal or when no future economic
benefits are expected from its use or disposal.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying
amount is greater than its estimated recoverable amount as referred in note 4.21.
Gains or losses arising on derecognition of an item of operating fixed assets is determined as the
difference between the disposal proceeds and the carrying amount of the assets and are recognised in the
consolidated statement of profit or loss within other income or other expenses. The useful lives, residual
values and depreciation method are reviewed on a regular basis. The effect of any changes in estimate
is accounted for on a prospective basis. The Group’s estimate of the residual value of its operating fixed
assets as at 30 September 2022 has not required any adjustment as its impact is considered insignificant.
4.4 Lease liability and right-of-use asset

4.4.1 The Group is the lessee
At the inception of a contract, the Group assesses whether a contract is, or contains, a lease based on
whether the contract conveys the right to control the use of an identified asset for a period of time in
exchange for consideration. Lease terms are negotiated on an individual basis and contain different terms
and conditions. The Group has lease contracts for agricultural land (for cultivation of sugarcane), vehicles
(for its employees and other business operations) and office buildings (for office operations).
In determining the lease term, management considers all facts and circumstances that create an economic
incentive to exercise an extension option or termination option. The assessment is reviewed if a significant
event or a significant change in circumstances occurs which affects this assessment and that is within the
control of the lessee.
JDW GROUP 165

The Group cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental
borrowing rate (IBR) to measure lease liabilities related to land and building. The Group estimates the IBR
using observable inputs (such as market interest rates) when available and is required to make certain
entity-specific estimates.
Right-of-use assets
The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the
underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated
depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities.
The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs
incurred, and lease payments made at or before the commencement date less any lease incentives
received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term
and the estimated useful lives of the assets, as specified in note 21.
Where the Group expects to obtain ownership of the leased asset at the end of the lease term, the
depreciation is charged over its estimated useful life. The Group also assesses the right-of-use asset for
impairment when such indicators exist.
The Group has elected not to recognize a right-of-use asset and corresponding lease liability for short-
term leases with terms of 12 months or less and leases of low-value assets. Lease payments on these
assets are charged to the consolidated statement of profit or loss as incurred.
Lease liabilities
At the commencement date, the Group measures the lease liability at the present value of the lease
payments unpaid at that date, discounted using the interest rate implicit in the lease if that rate is readily
available or the Group’s incremental borrowing rate. Lease payments included in the measurement of the
lease liability are made up of fixed payments (including in-substance fixed), variable payments based on
an index or rate, amounts expected to be payable under a residual value guarantee and payments arising
from options reasonably certain to be exercised.
Subsequent to initial measurement, the liability will be reduced for payments made and increased for
interest. It is remeasured to reflect any reassessment or modification, or if there are changes in in-
substance fixed payments. When the lease liability is remeasured, the corresponding adjustment is
reflected in the right-of-use asset, or profit or loss if the right-of-use asset is already reduced to zero.
4.4.2 The Group is the lessor

As a lessor, the Group classifies its leases as either operating or finance leases.
A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to
ownership of the underlying asset, and classified as an operating lease if it does not. However, all leases of
the Group are treated as operating leases and payments on operating lease agreements are recognised
as an expense on a straight-line basis over the lease term. Associated costs, such as maintenance and
insurance, are expensed as incurred. Initial direct costs incurred in negotiating and arranging an operating
lease are added to the carrying amount of the leased asset and recognised over the lease term on the
same basis as rental income. Contingent rents are recognised as revenue in the period in which they are
earned. The Group also earns rental income from operating leases of its investment properties (see note
4.5). Rental income is recognised on a straight-line basis over the term of the lease.
4.4.3 The Group is the intermediate lessor

When the Group is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease
separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset
arising from the head lease, not with reference to the underlying asset. If a head lease is a short-term lease
to which the Group applies the exemption as described in note 4.4.1, then it classifies the sub-lease as an
operating lease.
The Group perform assessment regarding operating lease or finance lease at the date of initial application
on the basis of the remaining contractual terms and conditions of the head lease and sublease at that
date.
166
The Group has sub-leased a land that has been presented as part of a right-of-use asset and recognised
a gain or loss on derecognition of the right-of-use asset pertaining to the land and presented the gain
as part of other income. The Group recognised interest income on lease receivables in the consolidated
4.5 Investment property

Investment property is property held either to earn rental income and / or for capital appreciation, but
not for sale in ordinary course of business, use in production or supply of goods or services as for
administrative purposes.
The Group’s investment property comprises of land which is carried at cost, including transaction cost,
less identified impairment loss, if any. The Group assesses at each consolidated statement of financial
position date whether there is any indication that investment property may be impaired. If such indication
exists, the carrying amount of such assets are reviewed to assess whether they are recorded in excess
of their recoverable amount. Where carrying value exceeds the respective recoverable amount, assets
are written down to their recoverable amounts and the resulting impairment loss is recognized in the
consolidated statement of profit or loss for the year. The recoverable amount is the higher of an asset’s
fair value less costs to sell and value-in-use.
Transfers are made to (or from) investment property only when there is a change in use. For a transfer
from investment property to owner-occupied property, the deemed cost for subsequent accounting is the
cost at the date of change in use. If owner-occupied property becomes an investment property, the Group
accounts for such property in accordance with the policy stated under property, plant and equipment up
to the date of change in use.
Investment property is derecognized either when it has been disposed off or when it is permanently
withdrawn from use and no future economic benefit is expected from its disposal. The gain or loss on
derecognition being difference between the net disposal proceeds and the carrying amount of the asset
is recognized in the consolidated statement of profit or loss as an income or expense in the period of
derecognition.
4.6 Intangibles
4.6.1 Goodwill
Goodwill is initially measured as at the acquisition date, being the excess of (a) the aggregate of the
consideration transferred, the amount of any non-controlling interest in the acquiree; and (b) the net of the
acquisition date amount of the identifiable assets acquired and the liabilities assumed.
In case the fair value attributable to the Group’s interest in the identifiable net assets exceeds the fair value
of consideration, the Group recognises the resulting gain in the consolidated statement of profit or loss on
the acquisition date.
Goodwill acquired in a business combination is measured, subsequent to initial recognition, at cost less
accumulated impairment losses, if any. (for impairment testing, refer to note 4.21).
On disposal of the relevant cash generating unit, the attributable amount of goodwill is included in the
determination of the profit or loss on disposal.
4.6.2 Computer software

Intangible assets acquired separately are initially recognized at cost. After initial recognition, these are
measured at cost less accumulated amortization and accumulated impairment losses. The estimated
useful life and amortization method is reviewed at the end of each annual reporting period, with effect
of any changes in estimate being accounted for on a prospective basis. In addition, they are subject to
impairment testing as described in note 4.21.
Intangible assets with finite useful life are amortized using straight-line method over its useful life as
specified in note 23 to these consolidated financial statements. Amortization on additions to intangible
assets is charged from the date when an asset is put to use till the asset is derecognised upon disposal
or when no future economic benefits are expected from its use or disposal. Subsequent expenditure is
capitalized only when it increases the future economic benefits embodied in the specific assets to which
it relates.
JDW GROUP 167

When an intangible asset is disposed of, the gain or loss on disposal is determined as the difference
between the proceeds and the carrying amount of the asset, and is recognised in the consolidated
statement of profit or loss within other income or other expenses.
4.7 Biological assets

The Group recognises a biological asset or agricultural produce when, and only when the Group controls
the asset as a result of past events; and it is probable that future economic benefits associated with the
asset will flow to the Group, and the fair value or cost of the asset can be measured reliably.
Consumable biological assets, comprising of standing sugarcane and other crops are measured at their
fair value determined by discounting future cash flows from operations over the estimated useful life of the
biological assets using the Holding Company risk adjusted discount rate. Significant assumptions used
are stated in note 27.1 to these consolidated financial statements. Fair value is deemed to approximate
the cost when little biological transformation has taken place or the impact of the transformation in price
is not expected to be material.
The sugarcane roots are bearer plants and are therefore presented and accounted for as property, plant
and equipment. However, the standing sugarcane and other crops are accounted for as biological assets
until the point of harvest. Sugarcane and other crops are transferred to inventory at fair value less costs
to sell when harvested. A gain or loss arising on initial recognition of a biological asset at fair value less
costs to sell and from a change in fair value less costs to sell of a biological asset are included in the
consolidated statement of profit or loss for the period in which it arises.
Initial and subsequent expenditure incurred for the establishment and conservation of biological assets
are capitalised as costs directly attributable to the biological transformation required to obtain the fair
value at which biological assets are valued.
Management of the Group regularly reviews significant unobservable inputs and valuation adjustments
used to arrive at fair value of biological assets. Any change in those inputs and valuation adjustments
might affect valuation of biological assets and accordingly charge to the consolidated statement of profit
or loss.
The Group managed, cultivate, consumed and sold sugarcane crops, while in case of other crops, the
Group engaged in cultivation and sale of wheat, mustard and rice etc.

These are stated at lower of cost and net realizable value. Cost is determined using the weighted average
method. Items in transit are valued at cost comprising invoice value plus other charges paid thereon.
Cost comprises direct materials, direct labour and an appropriate proportion of variable and fixed overhead
expenditure, that have been incurred in bringing the inventories to their present location and condition.
Estimates and judgements are continually evaluated and adjusted based on historical experience and
other factors, including expectations of future events that are believed to be reasonable under the
circumstances. The Group reviews the stores, spare parts and loose tools for possible impairment on
an annual basis. Any change in estimates in future years might affect the carrying amounts of respective
items of stores, spare parts and loose tools with a corresponding effect on provision.
4.9 Stock-in-trade
These are valued at the lower of weighted average cost and net realizable value except for stock in
transit, which is valued at cost comprising invoice value and related expenses incurred thereon up to the
consolidated statement of financial position date.
Cost is determined as follows:

Raw materials Average cost
Work-In-Process & Finished goods Average manufacturing cost
Molasses, Bagasse and Mud - by products Net realizable value
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The cost of harvested crops transferred from biological assets to stock-in-trade is its fair value less costs
to sell at the point of harvest.
The Group reviews the carrying amount of stock-in-trade on a regular basis. Carrying amount of stock-
in-trade is adjusted where the net realizable value is below the cost. Net realizable value is the estimated
selling price in the ordinary course of business, less the estimated costs of completion and estimated
costs necessary to make the sale.
4.10 Taxation
Taxation for the year is the tax payable on the current year’s taxable income based on the applicable
income tax rate. Income tax expense comprises current and deferred tax.
4.10.1 Current tax

Income tax
Provision of current tax is based on the taxable income for the year determined in accordance with the
prevailing law for taxation. The charge for current tax is calculated using tax rates (and laws) that have
been enacted or substantially enacted at the reporting date and after taking into account tax credits,
rebates and 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. However, profits and gains of the Group derived from bagasse based cogeneration power
project are exempt from tax in terms of clause 132C of Part I of the Second Schedule to the Income Tax
Ordinance, 2001, subject to the conditions and limitations provided therein. Under clause 11A of Part IV of
the Second Schedule to the Income Tax Ordinance, 2001, the Group is also exempt from levy of minimum
tax on ‘turnover’ under section 113 of the Income Tax Ordinance, 2001.

Agriculture tax
According to Section 41 of the Income Tax Ordinance, 2001, agriculture income of the Group is exempt
from tax under Federal Board of Revenue. Provision for current tax is based on the taxable agriculture
income for the year determined in accordance with the Punjab Agriculture Income Tax Act, 1997. The
charge for current tax is calculated using prevailing tax rates.
4.10.2 Deferred tax

Deferred tax is provided in full, using the liability method, on temporary differences arising between the
tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements.
However, deferred tax is not recognized for:
– temporary differences on the initial recognition of assets or liabilities in a transaction that is not a
business combination and that affects neither accounting nor taxable profit or loss;
– temporary differences related to investments in subsidiaries, associates and joint arrangements to
the extent that the Group is able to control the timing of the reversal of the temporary differences and
it is probable that they will not reverse in the foreseeable future; and
– taxable temporary differences arising on the initial recognition of goodwill.
Deferred tax assets are recognized for unused tax losses, unused tax credits and deductible temporary
differences to the extent that it is probable that future taxable profits will be available against which they
can be used. Future taxable profits are determined based on the reversal of relevant taxable temporary
differences. If the amount of taxable temporary differences is insufficient to recognize a deferred tax asset
in full, then future taxable profits, adjusted for reversals of existing temporary differences, are considered.
Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer
probable that the related tax benefit will be realized; such reductions are reversed when the probability of
future taxable profits improves.
Unrecognized deferred tax assets are reassessed at each reporting date and recognized to the extent
that it has become probable that future taxable profits will be available against which they can be used.
Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by
the end of the reporting period and are expected to apply when the related deferred tax asset is realised
or the deferred tax liability is settled. In this regard, the effect on deferred taxation of the portion of income
JDW GROUP 169

subject to under provisions of Section 113 is also considered in accordance with the requirement of
Technical Release - 27 of Institute of Chartered Accountants of Pakistan.
The measurement of deferred tax reflects the tax consequences that would follow from the manner in
which the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and
liabilities.
Deferred tax has been fully provided in these consolidated financial statements except profits and gains
of the Group derived from bagasse based cogeneration power which are exempt from tax subject to the
conditions and limitations provided for in terms of clause (132C) of Part I of the Second Schedule to the
Income Tax Ordinance, 2001 because the Group’s management believes that the temporary differences
will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax
assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax
assets and tax liabilities are offset where the Group has a legally enforceable right to offset and intends
either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
Current and deferred tax is recognised in consolidated statement of profit or loss, except to the extent that
it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is
also recognised in other comprehensive income or directly in equity, respectively.
4.10.3 Group taxation

The Holding Company has filed an application dated 08 December 2021 to Securities Exchange
Commission of Pakistan (‘SECP’) for Group Taxation under regulation 8 of the Group Companies
Registration Regulation 2008. The above mentioned application has been considered by the SECP dated
27 December 2021 and issued the designation letter to the Holding Company for Group Taxation which
comprises of the Holding Company and its wholly owned subsidiary, Deharki Sugar Mills (Pvt.) Limited
(group companies). Consequently, the group companies will be taxed as one fiscal unit from the tax year
2023 and onwards. Further, as per clause 103A of Part I and clause 11C of Part IV of the Second Schedule
to the Income Tax Ordinance, 2001 (‘the Ordinance’), any income derived from inter-corporate dividend
and applicability of provision of section 151 of the Ordinance on inter-corporate profit on debt within the
group companies entitled to group taxation under section 59AA of the Income Tax Ordinance, 2001 is
exempt from tax subject to the condition that return of the Group has been filed for the tax year.
Current and deferred income taxes are recognised by each entity within the group companies, regardless
of who has the legal rights for the recovery of tax. However, current tax liability / receivable is shown by
the respective companies of group as it has legal obligation / right of recovery of tax upon submission of
group annual income tax return. Balances among the group entities as a result of Group taxation is shown
as tax recoverable / payable to the respective group entity. Any adjustments in the current and deferred
taxes of the respective companies on account of group taxation are credited or charged to respective
statement of profit or loss in the year in which they arise.
4.11 Employee benefits

4.11.1 Defined contribution plan
A defined contribution plan is a post-employment benefit plan under which the Group pays fixed
contribution into a separate entity and will have no legal or constructive obligation to pay further amounts.
Obligations for contributions to defined contribution plan is recognized as an employee benefit expense
in the consolidated statement of profit or loss when they are due.
The Group operates approved contributory provident fund for its eligible employees. Equal monthly
contribution is made both by the Group and employee to the fund at the rate of 10% of basic salary.
4.11.2 Defined benefit plan

A defined benefit plan provides an amount of gratuity that an employee will receive on or after retirement,
usually dependent on one or more factors such as age, years of service and compensation. A defined
benefit plan is a plan that is not a defined contribution plan. The liability recognized in the consolidated
statement of financial position in respect of defined benefit plan is the present value of the defined benefit
obligation at the end of the reporting year less the fair value of plan assets.
170
The Holding Company operates approved funded gratuity fund covering eligible full time permanent
employees who have completed the minimum qualifying period of service as defined under the fund. The
gratuity fund is managed by the trustees. The calculation of the benefit requires assumptions to be made
of future outcomes, the principal ones being in respect of increase in remuneration and the discount rate
used to convert future cash flows to current values.
The calculation of defined benefit obligation is performed by qualified actuary by using the projected unit
credit method and charge for the year other than on account of experience adjustment is included in the
consolidated statement of profit or loss.
Remeasurement of the net defined benefit liability, which comprise actuarial gains and losses, the return
on plan assets (excluding interest) and the effect of asset ceiling (if any, excluding interest), are recognized
immediately in other comprehensive income.
The Holding Company determines the net interest expense (income) on the net defined liability / (asset) for
the year by applying the discount rate used to measure the defined benefit obligation at the beginning of
the annual year to the then - net defined benefit liability / (asset) during the year as a result of contributions
and benefit payments. Net interest expense and other expenses related to defined benefit plans are
recognized in the consolidated statement of profit or loss.
4.12 Deferred Government grant

Grant from the government is recognised at their fair value where there is a reasonable assurance that the
grant will be received and the Group will comply with all attached conditions. Government grant relating to
costs is deferred and recognised in the consolidated statement of profit or loss over the period necessary
to match them with the costs that they are intended to compensate. Amortization of deferred grant is
presented as reduction of related interest expense.
4.13 Revenue from contracts with customers

4.13.1 Revenue recognition
Revenue is recognised when or as performance obligations are satisfied by transferring control of a
promised goods or service to a customer, and control either transfers over time or at a point in time.
Revenue is measured at fair value of the consideration received or receivable, excluding discounts,
commissions and government levies. Revenue comprises income arising in the course of the Group’s
ordinary activities. The Group is engaged in the sale of crystalline sugar, its by-products, agri inputs, sale
of electricity and agricultural produce.
a) Sale of goods
Revenue from the sale of goods is recognized at the point in time when the performance obligations
arising from the contract with a customer is satisfied and the amount of revenue that it expects to be
entitled, can be determined. This usually occurs when control of the asset is transferred to the customer,
which is when goods are dispatched or delivered to the customer. The normal credit terms for customers
is as per sale order.
Revenue is measured based on the consideration specified in a contract with a customer and excludes
amounts collected on behalf of third parties. Revenue is disclosed net of returns, rebates, discounts and
other allowances.
b) Sale of energy
Revenue from sale of energy is recognized over time as energy is delivered and based on the rates
determined under the mechanism laid down in the EPA. The delivered energy units represent a series of
distinct goods that are substantially the same and have the same pattern of transfer to the customer as
measured using an output method. The amount that the Group has a right to bill the customer corresponds
directly with the value of the completed performance to the customer. As a result, the Group applies the
“right to invoice” practical expedient under IFRS 15 to measure and recognize revenue.
Invoices are generally raised on a monthly basis and are due after 30 days from acknowledgement by
CPPA-G.
Payments to customers are recorded as a reduction in revenue when the payments relate to the Group’s
performance obligations under the contract (e.g. liquidated damages or penalties).
JDW GROUP 171

c) Other income
The Group also generates revenue from following other sources which are enumerated below:
– income on bank deposits is accrued on a time proportion basis by reference to the principal
outstanding and the applicable rate of return;
– foreign currency gains and losses are reported on a net basis;
– rental income arising from investment property and sub-lease (operating lease) is recognized in
accordance with the terms of lease contracts over the lease term on straight-line basis;
– interest income is recognized as and when accrued on effective interest method.
– Upon the EPA Amendment becoming effective, delayed payment mark-up on amounts due under
the EPA is accrued on a time proportion basis. However, before effectiveness of EPA Amendment,
delayed mark-up on due payments by the CPPA-G is recognized only when the Group has fully
received the amount of relevant invoice due;
– Income from sale of scrap is recorded when risks and rewards are transferred to the customers which
coincides with the time of dispatch of items; and
– Other incomes, if any, are accounted when performance obligations are met.
4.13.2 Contract balances

a) Contract liabilities (advances from customers)
A contract liability is the obligation to transfer goods or services to a customer for which the Group
has received consideration (or an amount of consideration is due) from the customer. If a customer
pays consideration before the Group transfers goods or services to the customer, a contract liability is
recognised when the payment is made or the payment is due (whichever is earlier). Contract liabilities are
recognised as revenue when the Group performs under the contract.
The Group recognises contract liabilities for consideration received in respect of unsatisfied performance
obligations and reports these amounts as advances from customers in the consolidated statement of
financial position (refer to note 16).
b) Trade receivables / contract assets

If the Group satisfies a performance obligation before it receives the consideration, the Group recognises
either a contract asset or a trade receivable in its consolidated statement of financial position, depending
on whether something other than the passage of time is required before the consideration is due (refer to
note 30).
Trade receivables are amounts due from customers for goods or services that are delivered in the ordinary
course of business. If collection is expected in one year or less, they are classified as current assets. If not,
they are presented as non-current assets.
Trade receivables are recognised initially at the amount of consideration that is unconditional, unless they
contain significant financing components when they are recognised at fair value. They are subsequently
measured at amortised cost using the effective interest method, less loss allowance. Refer note 4.20.6 for
a description of the Group’s impairment policies.
c) Contract cost
The contract cost is the incremental cost that the Group incurs to obtain a contract with customers that it
would not have incurred if the contract had not been obtained. The Group recognized contract cost as an
expense in the consolidated statement of profit or loss on a systematic pattern of revenue.
4.14 Borrowing cost

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets,
which are assets that necessarily take a substantial period of time to get ready for their intended use, are
added to the cost of those assets, until such time as the assets are substantially ready for their intended
use. All other borrowing costs are recognized in the consolidated statement of profit or loss as incurred.
172
4.15 Cash and cash equivalents
Cash and cash equivalents in the consolidated statement of financial position comprise cash at banks and
on hand. For the purpose of the consolidated statement of cash flows, cash and cash equivalents consist
of cash and bank deposits, as defined above, net of outstanding bank running finances / Morabaha /
Karobar / Musharakah finances as they are considered an integral part of the Group’s cash management.
4.16 Trade and other payables

Trade and other payables are obligations to pay for goods or services that have been acquired in
ordinary course of business from suppliers. Trade and other payables are presented as current liabilities
unless payment is not due within twelve months after the reporting period. Trade and other payables are
recognized initially at fair value and subsequently measured at amortised cost using the effective interest
method.
4.17 Provisions
Provisions are recognized when the Group has a present legal or constructive obligation as a result of past
event and it is probable that an outflow of economic benefits will be required to settle the obligation and a
reliable estimate can be made. The Group reviews the status of all pending litigations and claims against
the Group. Based on its judgment and the advice of the legal advisors/consultants for the estimated
financial outcome, an appropriate disclosure or provision is made. The actual outcome of these litigations
and claims can have an effect on the carrying amounts of the liabilities recognized at the consolidated
statement of financial position date.
4.18 Contingent liabilities

A contingent liability is disclosed when the Group has a possible obligation as a result of past events,
whose existence will be confirmed only by the occurrence or non-occurrence, of one or more uncertain
future events not wholly within the control of the Group; or the Group has a present legal or constructive
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.
4.19 Contingent assets

Contingent assets are disclosed when there is a possible asset that arises from past events and whose
existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future
events not wholly within the control of the Group. Contingent assets are not recognised until their realisation
become virtually certain.
4.20 Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability
or equity instrument of another entity.
4.20.1 Recognition and initial measurement

All financial assets and financial liabilities are initially recognized when the Group becomes a party to the
contractual provisions of the instruments.
A financial asset (unless it is a trade receivable without a significant financing component or for which the
Group has applied the practical expedient) or financial liability is initially measured at fair value plus/less,
for an item not at fair value through profit or loss (FVTPL), transaction costs that are directly attributable
to its acquisition or issue. Trade receivables that do not contain a significant financing component or for
which the Group has applied the practical expedient are measured at the transaction price determined
under IFRS 15.
4.20.2 Classification and subsequent measurement

Financial assets
On initial recognition, a financial asset is classified as measured at amortized cost, fair value through
other comprehensive income (FVTOCI), Fair value through Profit or loss (FVTPL) and in case of an equity
instrument it is classified as FVTOCI or FVTPL. Currently, the Group does not have any financial assets
categorised as FVTPL and FVTOCI.
JDW GROUP 173

The classification is determined by both:
– the entity’s business model for managing the financial asset, and
– the contractual cash flow characteristics of the financial asset.
Financial assets – Business model assessment

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
associated with the principal amount outstanding during a particular period of time and for other basic
lending risks and costs (e.g. liquidity risk and administrative costs), as well as a profit margin.
In assessing whether the contractual cash flows are solely payments of principal and interest, the Group
considers the contractual terms of the instrument. This includes assessing whether the financial asset
contains a contractual term that could change the timing or amount of contractual cash flows such that it
would not meet this condition. In making this assessment, the Group considers:
– contingent events that would change the amount or timing of cash flows;
– terms that may adjust the contractual coupon rate, including variable-rate features;
– prepayment and extension features; and
– terms that limit the Group’s claim to cash flows from specified assets (e.g. non-recourse features).
Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its
business model for managing financial assets in which case all affected financial assets are reclassified
on the first day of the first reporting period following the change in the business model.
All revenue and expenses relating to financial assets that are recognised in consolidated statement
of profit or loss are presented within finance costs, other income or other financial items, except for
impairment of trade receivables which is presented within other expenses.
4.20.3 Subsequent measurement of financial assets

i) Financial assets at amortized cost (debt instruments)
A financial asset is measured at amortized cost if it meets both of the following conditions and is not
designated as at FVTPL:
– it is held within a business model whose objective is to hold assets to collect contractual cash flows;
and
– its contractual terms give rise on specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding.
After initial recognition, these are measured at amortised cost using the effective interest method.
Discounting is omitted where the effect of discounting is immaterial.
ii) Financial assets at fair value through OCI (debt instruments)

The Group measures debt instruments at fair value through OCI if both of the following conditions are
met:
– The financial asset is held within a business model with the objective of both holding to collect
contractual cash flows and selling; and
– The contractual terms of the financial asset give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding.
For debt instruments at fair value through OCI, interest income, foreign exchange revaluation and
impairment losses or reversals are recognised in the consolidated statement of profit or loss and
computed in the same manner as for financial assets measured at amortised cost. The remaining
fair value changes are recognised in OCI. Upon derecognition, the cumulative fair value change
recognised in OCI is recycled to profit or loss.
1 74
iii) Financial assets designated at fair value through OCI (equity instruments)
Upon initial recognition, the Group can elect to classify irrevocably its equity investments as equity
instruments designated at fair value through OCI when they meet the definition of equity under IAS
32 Financial Instruments: Presentation, and are not held for trading. The classification is determined
on an instrument-by-instrument basis.
Gains and losses on these financial assets are never recycled to profit or loss. Dividends are
recognised as other income in the consolidated statement of profit or loss when the right of payment
has been established, except when the Group benefits from such proceeds as a recovery of part
of the cost of the financial asset, in which case, such gains are recorded in OCI. Equity instruments
designated at fair value through OCI are not subject to impairment assessment. The Group elected
to classify irrevocably its non-listed equity investments under this category.
iv) Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss are carried in the statement of financial position
at fair value with net changes in fair value recognised in the consolidated statement of profit or loss.
This includes derivative instruments and listed equity investments, if any which the Group had not
irrevocably elected to classify at fair value through OCI. Assets in this category are measured at fair
value with gains or losses recognised in the consolidated statement of profit or loss. The fair values
of financial assets in this category are determined by reference to active market transactions or using
a valuation technique where no active market exists.
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or
loss, and financial liabilities at amortised cost, as appropriate. All financial liabilities are recognised initially
at fair value and, in the case of loans and borrowings and other payables, net of directly attributable
transaction costs. A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a
derivative or it is designated as such on initial recognition.
The Group has not designated any financial liability upon recognition as being at fair value through profit
or loss. Other financial liabilities are subsequently measured at amortized cost using the effective interest
method. Gains and losses are recognised in consolidated statement of profit or loss when the liabilities
are derecognised as well as through the EIR amortisation process.
4.20.4 Derecognition
Financial assets
The Group derecognizes a financial asset when the contractual rights to the cash flows from the financial
asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which
substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the
Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not
retain control of the financial asset.
The Group might enter into transactions whereby it transfers assets recognized in its consolidated
statement of financial position, but retains either all or substantially all of the risks and rewards of the
transferred assets. In these cases, the transferred assets are not derecognized.
On derecognition of a financial asset measured at amortised cost, the difference between the asset’s
carrying value and the sum of the consideration received and receivable is recognised in the consolidated
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or
expires. When an existing financial liability is replaced by another from the same lender on substantially
different terms, or the terms of an existing liability are substantially modified, such an exchange or
modification is treated as the derecognition of the original liability and the recognition of a new liability.
The difference in the respective carrying amounts is recognised in the consolidated statement of profit or
loss.
JDW GROUP 175

4.20.5 Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the consolidated
statement of financial position only when the Group has a legally enforceable right to set off the recognized
amounts and intends to either settle on a net basis or realize the asset and settle the liability simultaneously.
4.20.6 Impairment of financial assets

The Group recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at
fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due
in accordance with the contract and all the cash flows that the Group expects to receive. The shortfall is
then discounted at an approximation to the assets’ original effective interest rate.
The Group recognizes loss allowances for ECLs on:
– financial assets measured at amortized cost (debt instruments); and

– trade receivables (including due from Government of Pakistan) and lease receivables.
The Group measures loss allowances at an amount equal to lifetime ECLs, except for bank balances, due
from related parties and other financial assets for which credit risk (i.e. the risk of default occurring over
the expected life of the financial instrument) has not increased significantly since initial recognition, which
are measured at 12-month ECLs:
12-month ECLs are the portion of ECLs that result from default events that are possible within the 12
months after the reporting date (or a shorter period if the expected life of the instrument is less than 12
months).
The Group has elected to measure loss allowances for trade receivables including due from ‘Government
of Pakistan’ (see note 4.20.7) and lease receivables using IFRS 9 simplified approach and has calculated
ECLs based on lifetime ECLs. The Group has established a provision matrix that is based on the Group’s
historical credit loss experience, adjusted for forward-looking factors specific to the trade receivables and
lease receivable and the economic environment.
When determining whether the credit risk of a financial asset has increased significantly since initial
recognition and when estimating ECL, the Group considers reasonable and supportable information
that is relevant and available without undue cost or effort. This includes both quantitative and qualitative
information and analysis, based on the Group’s historical experience and informed credit assessment and
including forward-looking information.
The Group assumes that the credit risk on a financial asset has increased significantly if it is more than
past due for a reasonable period of time. Loss allowances for trade receivables and lease receivables
are always measured at an amount equal to lifetime ECLs. Lifetime ECLs are the ECLs that result from all
possible default events over the expected life of a financial instrument. The maximum period considered
when estimating ECLs is the maximum contractual period over which the Group is exposed to credit risk.
Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying
amount of the assets.
The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations
of recovering of a financial asset in its entirety or a portion thereof. The Group individually makes an
assessment with respect to the timing and amount of write-off based on whether there is a reasonable
expectation of recovery. The Group expects no significant recovery from the amount written off. However,
financial assets that are written off could still be subject to enforcement activities in order to comply with
the Group’s procedures for recovery of amounts due.
The Group reviews the recoverability of its trade receivables, lease receivables, deposits, advances and
other receivables to assess the impairment allowances required on an annual basis. Refer to note 48.1.1
for a detailed analysis of how the impairment requirements of IFRS 9 are applied.
176
4.20.7 Financial assets due from the Government of Pakistan
Financial assets due from the Government of Pakistan include trade receivables due from CPPA-G
under the EPA that also includes accrued amounts of markup. SECP vide S.R.O. 1177 (I)/2021 dated
13 September 2021 notified a partial exemption, that in respect of companies holding financial assets
due from the Government of Pakistan in respect of circular debt, the requirements contained in “IFRS
9 (Financial Instruments) with respect to application of Expected Credit Losses method” shall not be
applicable till June 30, 2022, provided that such companies shall follow relevant requirements of IAS 39-
Financial Instruments: Recognition and Measurement, in respect of above referred financial assets during
the exemption period. However, subsequent to year end, the Holding Company has applied to the SECP
to further extend the application of Expected Credit Loss model under IFRS-9 for IPPs for period 01 July
2022 to 30 September 2027 but no any further exemption has been granted by the SECP.
Accordingly, the Group has adopted a particular requirement (expected credit losses impairment model)
of IFRS 9 ‘Financial Instruments’ from 01 July 2022, in respect of its trade debts due from Government
of Pakistan in respect of circular debt after expiration of exemption period i-e; from initial application of
IFRS 9 till 30 June 2022, as granted by SECP vide S.R.O. 1177 (I)/2021 dated 13 September 2021 (for
details, refer to note 4.20.6). For trade receivables due from Government of Pakistan, the Group has opted
to apply simplified approach (that is, to measure the loss allowance at an amount equal to lifetime ECL
at initial recognition and throughout its life), rather than apply the general model. However, adaptation
of such new accounting policy has not significant impact on the amounts reported in the consolidated
financial statements (for details, refer to note 48.1.1).
Provision against trade debt due from CPPA-G reported under exemption period
The Group has applied the following policy during exemption period.
A provision for impairment is established when there is objective evidence that the Group will not be able
to collect all the amount due according to the original terms of the receivable. The Group assesses at the
end of each reporting period whether there is objective evidence that the financial asset is impaired.
The financial asset is impaired and impairment losses are incurred only if there is objective evidence of
impairment as a result of one or more events that occurred after the initial recognition of the asset (a ‘loss
event’) and that loss event (or events) has an impact on the estimated future cash flows of the financial
asset that can be reliably estimated.
Evidence of impairment may include indications that the debtor is experiencing significant financial difficulty,
default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or
other financial reorganisation, and where observable data indicates that there is a measurable decrease
in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with
defaults.
The amount of the loss is measured as the difference between the asset’s carrying amount and the
present value of estimated future cash flows (excluding future credit losses that have not been incurred)
discounted at the financial asset’s original effective interest rate. The carrying amount of the asset is
reduced and the amount of the loss is recognized in the consolidated statement of profit or loss. When
the financial asset is uncollectible, it is written off against the provision.
Subsequent recoveries of amounts previously written off are credited to the consolidated statement of profit
or loss. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be
related objectively to an event occurring after the impairment was recognized (such as an improvement in
the debtor’s credit rating), the reversal of the previously recognized impairment loss is recognised in the
consolidated statement of profit or loss.
4.21 Non - Financial assets

The carrying amount of the Group’s non-financial assets, other than inventories and deferred tax assets
are reviewed at each reporting date to determine whether there is any indication of impairment. If any such
indication exists, then the asset’s recoverable amount is estimated. The recoverable amount of an asset or
cash generating unit is the greater of its value in use and its fair value less cost to sell. In assessing value
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
cash generating unit.
JDW GROUP 177

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 consolidated statement of profit
or loss. Impairment 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 reporting date for any indications that the loss has decreased or no longer exists.
The management of the Group reviews carrying amounts of its assets including goodwill, long term
investments, receivables and advances and cash generating units for possible impairment and makes
formal estimates of recoverable amount if there is any such indication. In case of goodwill, formal estimates
of recoverable amount is made on an annual basis.
An impairment loss 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 exceed the carrying amount that would have been determined, net of depreciation
and amortization, if no impairment loss had been recognized. A reversal of impairment loss for a cash
generating unit is allocated to the assets of the unit, except for goodwill, pro rata with the carrying amounts
of those assets. The increase in the carrying amounts shall be treated as reversals of impairment losses
for individual assets and recognized in the consolidated statement of profit or loss unless the asset is
measured at revalued amount. Any reversal of impairment loss of a revalued asset shall be treated as a
revaluation increase.
4.22 Business combination

Business combinations are accounted for by applying the acquisition method. The cost of acquisition
is measured as the fair value of assets given, equity instruments issued and the liabilities incurred or
assumed at the date of acquisition. The consideration transferred includes the fair value of any asset
or liability resulting from a contingent consideration arrangement, if any. Acquisition-related costs are
expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a
business combination are measured initially at their fair values at the acquisition date. The excess of the
consideration transferred over the fair value of the identifiable net assets acquired is recorded as goodwill
(for details, refer to note 4.6.1). If this is less than the fair value of the net assets acquired in the case of a
bargain purchase, the difference is charged directly in the consolidated statement of profit or loss.
4.23 Foreign currency transactions

Transactions in foreign currencies are translated to the respective functional currencies of the Group at
exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign
currencies at the reporting date are retranslated to the functional currency at the exchange rate at the
reporting date. The foreign currency gain or loss on monetary items is the difference between amortized
cost in the functional currency at the beginning of the year, adjusted for effective interest and payments
during the year, and the amortized cost in foreign currency translated at the exchange rate at the end of
the year.
Non-monetary assets and liabilities that are measured at fair value in a foreign currency are retranslated to
the functional currency at the exchange rate at the date that the fair value was determined. Non-monetary
items that are measured based on historical cost in a foreign currency are not translated again at the
reporting date.
Foreign currency differences arising on retranslation are generally recognized in the consolidated
4.24 Dividend
Dividend to ordinary shareholders is recognized as a deduction from accumulated profit in the consolidated
statement of changes in equity and as a liability in the Group’s consolidated statement of financial position
in the year in which it is declared by the Board of Directors.
4.25 Earnings per share (EPS)

Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Holding
Company by weighted average number of ordinary shares outstanding during the year. Diluted EPS is
calculated by adjusting basic EPS with weighted average number of ordinary shares that would be issued
on conversion of all dilutive potential ordinary shares into ordinary shares and post-tax effect of changes
in profit or loss attributable to ordinary shareholders of the Holding Company that would result from
conversion of all dilutive potential ordinary shares into ordinary shares.
178
4.26 Operating segment
Segment reporting is based on the operating (business) segments of the Group. An operating segment
is a component of the Group that engages in business activities from which it may earn revenues and
incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other
components. An operating segment’s operating results are reviewed regularly by the chief operating
decision maker to make decisions about resources to be allocated to the segment and assess its
performance, and for which discrete financial information is available. Segment results that are reported
to the chief operating decision maker include items directly attributable to a segment as well as those that
can be allocated on a reasonable basis. Those incomes, expenses, assets, liabilities and other balances
which cannot be allocated to a particular segment on a reasonable basis are reported as unallocated (for
details, refer to note 46.2).
5. NEW STANDARDS, AMENDMENTS TO APPROVED ACCOUNTING STANDARDS AND NEW INTERPRETATIONS

The following amendments to existing standards have been published that are applicable to the consolidated
financial statements covering annual periods, beginning on or after the following dates:
5.1 Standards, interpretations and amendments to published approved accounting standards that
are effective during the current year
Certain standards, amendments and interpretations to IFRSs are effective for accounting periods
beginning on October 01, 2021 but are considered not to be relevant or to have any significant effect on
the Group’s operations (although they may affect the accounting for future transactions and events) and
are, therefore, not detailed in these consolidated financial statements.
5.2 Standards, amendments and interpretations to existing standards that are not yet effective and
have not been early adopted by the Group
The following Standards and amendments to published approved accounting standards that are effective
for accounting periods, beginning on or after the date mentioned against each to them:
Effective for
on or after
IAS-8 Accounting Policies, changes in Accounting Estimates and Errors January 01, 2023
(Amendment regarding the definition of accounting estimates)
IAS-1 Presentation of Financial Statements & Accounting Policies – January 01, 2023
Amendments regarding the classification of liabilities
IAS-12 Income Taxes (The amendments to narrow the scope of the initial January 01, 2023
recognition exemption)
IAS-16 Property, Plant and Equipment – Amendments prohibiting a company January 01, 2022
from deducting from the cost of property, plant and equipment amounts
received from selling items produced while the company is preparing
the asset for its intended use
IAS-37 Provisions, Contingent Liabilities and Contingent Assets – Amendments January 01, 2022
regarding the costs to include when assessing whether a contract is
onerous
IFRS-10 Consolidated Financial Statements and IAS 28 - Investment in Associates Not yet finalised
and Joint Ventures (Amendment regarding sale or contribution of assets
between an investor and its associate or Joint Venture).
IFRS-3 Business Combinations – Amendments updating a reference to the January 01, 2022
Conceptual Framework
IFRS-4 Insurance Contracts – Amendments regarding the expiry date of the January 01, 2023
deferral approach
JDW GROUP 179

Effective for
on or after
IAS-41 Agriculture – Amendments resulting from Annual Improvements to IFRS January 01, 2022
Standards 2018–2020 (taxation in fair value measurements)
IFRS-1 First-time Adoption of International Financial Reporting Standards – January 01, 2022
Amendments resulting from Annual Improvements to IFRS Standards
2018–2020 (subsidiary as a first-time adopter)
IFRS-9 Financial Instruments – Amendments resulting from Annual January 01, 2022
Improvements to IFRS Standards 2018–2020 (fees in the ‘10 per cent’
test for de-recognition of financial liabilities)
IFRS-16 Leases – Amendments resulting from Annual Improvements to IFRS January 01, 2022
Standards 2018–2020 (Lease incentives)
The above amendments and improvements are not expected to have any material impact on the
consolidated financial statements in the period of initial application.
5.3 New Standards issued by IASB but not yet been notified / adopted by SECP
Following new standards issued by IASB but not yet been notified / adopted by SECP:
Effective for
on or after
IFRS – 1 First Time Adoption of IFRS July 01, 2009
IFRS – 17 Insurance Contracts January 01, 2023
Further, the above new standards have been issued by IASB which are yet to be notified by the SECP
for the purpose of applicability in Pakistan and are not expected to have any material impact on the
consolidated financial statements in the period of initial application.
5.4 Waiver from application of IFRS 16 “Leases”

The Securities and Exchange Commission of Pakistan (SECP) through S.R.O. 24 (I) / 2012 dated January
16, 2012, as modified by S.R.O. 986 (I) / 2019 dated September 02, 2019, granted exemption from the
application of IFRS 16 ‘Leases’ to all companies, which have entered into power purchase agreements
before January 01, 2019. However, SECP made it mandatory to disclose the impact of the application of
IFRS 16 on the company’s financial statements. The Group’s arrangement with CPPA-G covered under
respective EPAs and consequently are exempt under the aforesaid S.R.O. Under IFRS-16 Leases, the
consideration required to be made by lessees CPPA-(G) for the right to use the asset would have been
accounted for as finance lease. The Group’s power plant’s control due to purchase of total output by
CPPA-G appears to fall under the scope of finance lease under IFRS 16. Further, comparative information
has been restated of below disclosure due to error in applying IFRS 16. Consequently, if the Group were
to follow IFRS 16 with respect to its EPA, the effect on the consolidated financial statements would be as
given below:
2022 2021
Rupees Rupees
De-recognition of property, plant and equipment (3,919,193,645) (4,132,209,168)
Recognition of lease receivables 17,187,586,969 17,802,340,090
Increase in un-appropriated profit at beginning of the year 13,670,130,922 9,902,089,301

(Decrease)/increase in profit for the year (401,737,598) 3,768,041,621
Increase in un-appropriated profit at end of the year 13,268,393,324 13,670,130,922
180
2022 2021
Rupees Rupees
6. SHARE CAPITAL
6.1 Authorized share capital
75,000,000 (2021: 75,000,000) voting ordinary
shares of Rs. 10 each 750,000,000 750,000,000
25,000,000 (2021: 25,000,000) preference
shares of Rs. 10 each 250,000,000 250,000,000
1,000,000,000 1,000,000,000
6.2 Issued, subscribed and paid up share capital
32,145,725 (2021: 32,145,725) voting ordinary shares
of Rs. 10 each fully paid in cash 321,457,250 321,457,250
27,630,936 (2021: 27,630,936) voting bonus shares
of Rs. 10 each fully paid 276,309,360 276,309,360
597,766,610 597,766,610

6.2.1 Mr. Jahangir Khan Tareen, an Executive Director (2021: Executive Director) holds 9,269,012 (2021:
9,552,293) and Makhdoom Syed Ahmad Mahmud, a Non-Executive Director (2021: Non-Executive
Director) holds 17,547,213 (2021: 16,493,932) ordinary shares of Rs. 10 each representing 15.51% (2021:
15.98%) and 29.35% (2021: 27.59%) of the paid up capital of the Holding Company respectively.
6.2.2 The shareholders are entitled to receive all distributions including dividends and other entitlements in
the form of bonus and right shares as and when declared by the Holding Company. All shares carry one
vote per share without restriction. The Group does not pay dividend until certain financial requirements of
lenders are satisfied.
7. SHARE PREMIUM RESERVE

This reserve can be utilized by the Group only for the purposes specified in section 81(2) and 81(3) of the
Note 2022 2021

Rupees Rupees
8. LONG TERM FINANCES - SECURED
banks / financial institutions 8.1.1 10,279,166,666 13,241,278,239
Islamic mode of financing 8.1.2 1,051,685,905 1,645,038,469
8.1 & 8.3 11,330,852,571 14,886,316,708
Less: Transaction cost
As at 01 October (43,656,920) (51,900,469)
Amortization of transaction cost 41 & 45 8,243,549 8,243,549
As at 30 September (35,413,371) (43,656,920)
11,295,439,200 14,842,659,788
Current maturity presented under current liabilities:
banks / financial institutions (3,046,633,333) (3,225,100,039)
Islamic mode of financing (562,102,567) (593,352,568)
14 (3,608,735,900) (3,818,452,607)
7,686,703,300 11,024,207,181
JDW GROUP 181

8.1 Long term finances - secured
Mark-up / Year Principal Principal
Loan Grace
Interest Limit of loan outstanding outstanding
duration period
basis maturity 2022 2021
Rupees Years Years Rupees Rupees

8.1.1 Mark-up bearing finances from conventional banks/ financial institutions

The Bank of Punjab - Led Syndicate
The Bank of Punjab *3mk + 1.10 2,500,000,000 06 Years - 2027 2,250,000,000 2,444,499,999
National Bank of Pakistan 3mk + 1.10 1,500,000,000 06 Years - 2027 1,350,000,000 1,466,700,000
Askari Bank Limited 3mk + 1.10 975,000,000 06 Years - 2027 877,500,000 953,355,000
MCB Bank Limited 3mk + 1.10 1,000,000,000 06 Years - 2027 900,000,000 977,800,000
Dubai Islamic Bank Limited 3mk + 1.10 1,000,000,000 06 Years - 2027 900,000,000 977,800,000
Pak Kuwait Investment Company (Pvt.) Limited 3mk + 1.10 750,000,000 06 Years - 2027 675,000,000 733,350,000
MCB Islamic Bank Limited 3mk + 1.10 750,000,000 06 Years - 2027 674,999,997 733,349,998
Askari Bank Limited (Islamic) 3mk + 1.10 525,000,000 06 Years - 2027 472,500,000 513,345,000
9,000,000,000 8,099,999,997 8,800,199,997
Conventional banks/ financial institutions

Allied Bank Limited (II) 3mk + 0.50 1,000,000,000 1.5 Years 01 Year 2023 1,000,000,000 -
Pak Libya Holding Company Limited (II) 3mk + 1.00 450,000,000 05 Years 0.5 Year 2026 350,000,000 450,000,000
Pak Brunei Investment Company Limited 3mk + 1.00 500,000,000 06 Years 01 Year 2025 300,000,000 400,000,000
Askari Bank Limited (IV) 3mk + 1.25 500,000,000 04 Years 0.25 Year 2024 266,666,669 400,000,001
Soneri Bank Limited (II) 3mk + 1.00 500,000,000 05 Years 01 Year 2023 125,000,000 250,000,000
Pak Oman Investment Company Limited (II) 3mk + 1.00 500,000,000 06 Years 01 Year 2023 75,000,000 175,000,000
Habib Bank Limited 6mk + 1.00 500,000,000 05 Years 01 Year 2022 62,500,000 187,500,000
Soneri Bank Limited (I) 3mk + 1.00 195,000,000 05 Years - 2022 - 60,000,000
Habib Bank Limited - SBP Refinance
Scheme (note - 8.2) **SBP Rate + 1.50 1,000,000,000 2.5 Years 0.5 year 2022 - 560,129,192
United Bank Limited - SBP Refinance
Scheme (note - 8.2) SBP Rate + 3.00 232,398,668 2.25 Years 0.5 Year 2022 - 75,119,050
MCB Bank Limited (II) 3mk + 1.00 2,000,000,000 03 Years 0.5 year 2023 - 1,400,000,000
Allied Bank Limited (I) 3mk + 0.50 1,000,000,000 1.5 Years - 2021 - 333,329,999
Standard Chartered Bank (Pakistan) Limited 3mk + 1.00 1,000,000,000 05 Years - 2022 - 150,000,000
9,377,398,668 2,179,166,669 4,441,078,242
18,377,398,668 10,279,166,666 13,241,278,239
8.1.2 Islamic mode of financing
Al Baraka Bank Limited 3mk + 1.00 1,000,000,000 05 Years 01 Year 2023 312,500,000 562,500,000
Bank Islami Pakistan Limited 3mk + 1.25 500,000,000 05 Years 01 Year 2026 437,500,000 500,000,000
National Bank of Pakistan (II) 3mk + 1.00 250,000,000 05 Years 01 Year 2024 177,083,338 239,583,334
Bank Alfalah Limited 3mk + 0.90 500,000,000 05 Years 01 Year 2023 124,602,567 249,205,135
Dubai Islamic Bank (Pakistan) Limited (II) 3mk + 1.00 500,000,000 05 Years 01 Year 2022 - 93,750,000
2,750,000,000 1,051,685,905 1,645,038,469
21,127,398,668 11,330,852,571 14,886,316,708
* 3 mk i.e. 3 months KIBOR
** SBP rate i.e. 0%

8.2 The Group had obtained borrowing under Refinance Scheme for payment of Wages & Salaries by the
State Bank of Pakistan (SBP) at subsidized rate in different tranches on various dates starting from June
2020, earmarked from running and cash finance limit, which was repayable in 8 quarterly installments
to commercial banks under the SBP Refinance Scheme. This loan was recognized and measured in
accordance with IFRS 9 ‘Financial Instruments’. Fair value adjustment had been measured as difference
between subsidized rate i.e. 0% KIBOR plus 150 to 350 bps per annum and prevailing market rate i.e.
182
three months KIBOR plus 100 to 150 bps per annum which had been recognised as Government grant in
accordance with IAS 20 “Accounting for Government Grants and Disclosure of Government Assistance”
(see note 12 to these consolidated financial statements) and had been amortised to interest income
in line with the recognition of interest expense the grant was compensating. The grant was conditional
subject to fulfillment of certain conditions as defined in the SBP Refinance Scheme. This loan has been
fully repaid during the year.

8.3 Long term finances are secured against ranking / joint parri passu charge over all present and future
fixed assets including land, building and plant and machinery of the Group amounting to Rs. 23,869
million (2021: Rs. 23,975 million) and personal guarantees of sponsor Directors of the Group.
Note 2022 2021

Rupees Rupees
9. LEASE LIABILITIES
Balance as at 01 October 2,104,109,093 1,460,474,747
Additions / modification of lease 1,338,362,504 1,405,892,658
Impact of early termination (172,416,416) (41,641,412)
Impact of remeasurment of lease liabilities 51,986,278 (9,423,355)
Finance cost regarding lease arrangement 41 261,513,480 178,103,402
Lease payments (960,656,556) (889,296,947)
9.1 2,622,898,383 2,104,109,093
Less: Current maturity presented under current liabilities 14 (776,544,778) (790,380,467)
Balance as at 30 September 1,846,353,605 1,313,728,626

9.1 This includes Rs. 416.268 million and Rs. 13.531 million (2021: Rs. 398.526 million and Rs. 26.991
million) outstanding under Diminishing Musharakah financing arrangement and conventional banks
respectively.
9.2 Implicit borrowing rate against lease liabilities towards financial institutions / conventional banks is six
month KIBOR plus 100 to 120 bps per annum (2021: six month KIBOR plus 100 to 110 bps per annum).
These are secured against charge on the leased assets and security deposits (for details, refer to
note 21 & 25). Further, the Group has provided Demand Promissory Note in favour of the Diminishing
Musharakah financing arrangement as security of outstanding due.
9.3 The maturity analysis of lease liabilities is presented in note 48.1.2 to these consolidated financial
statements.
9.4 The incremental borrowing rate applied to lease liabilities related to land and building ranging from
9.70% to 15.87% (2021: 8.65% to 14.9%). There are no variable lease payments in lease contracts.
There were no lease with residual value guarantee.
9.5 At 30 September 2022, the Group had committed to leases for vehicles which had not yet commenced.
The total expected future cash outflows for such leases are Rs. 21 million (2021: Rs. 27.4 million).
JDW GROUP 183

Note 2022 2021
Rupees Rupees
10. DEFERRED TAXATION
Deferred tax liability on taxable temporary differences
- accelerated tax depreciation on operating fixed assets 3,805,706,346 3,394,497,981
4,476,267,753 3,863,017,343
Deferred tax asset on deductible temporary differences
- provisions for doubtful debts and obsolescence (66,396,127) (91,755,635)
- provision for Workers’ Welfare Fund (20,198,922) (21,259,365)
- tax losses – (186,624,114)
- staff retirement benefits (15,934,856) (21,218,847)
- tax credits 10.1 (2,189,800,142) (2,139,697,529)
(3,124,567,613) (3,055,378,849)
- Unrecognized deferred tax liability related to operating
fixed assets of bagasse based Co-Generation 4.10.2 (970,766,196) (692,741,608)
10.3 380,933,944 114,896,886
10.1 The Group has not recognised deferred tax asset in respect of tax credits available for carry forward
under section 113 and 113C of the Income tax Ordinance, 2001, amounting to Rs. Nil (2021: Rs. 282.98
million having expiry upto 2026), in line with accounting policies of the Group as stated in note 4.10.2 to
these consolidated financial statements.
10.2 Under the Finance Act, 2019, corporate rate of tax has been fixed at 29% for tax year 2020 and onwards.
Further, during the year, an amendment made to Income Tax Ordinance, 2001 through Finance Act, 2022.
In accordance with the such amendment, super tax at the rate of 4% for tax year 2023 and onwards has
been levied on high earning persons in addition to the corporate tax rate of 29%. Accordingly, deferred
tax assets and liabilities have been recognised using the expected applicable rate ranging from 32% to
33% (2021: 29%).
Note 2022 2021

Rupees Rupees
10.3 Movement in deferred tax balances is as follows:
As at 01 October 114,896,886 1,050,724,523
Recognized in statement of profit or loss:
- accelerated tax depreciation on operating fixed assets 133,183,777 (770,714,022)
- provisions for doubtful debts and obsolescence 25,359,508 (4,671,711)
- provision for Workers’ Welfare Fund 1,060,443 8,908,286
- staff retirement benefits 4,609,410 12,939,542
- tax losses 186,624,114 94,583,221
- origination and reversal of tax credits (50,102,613) (267,426,223)
42 265,362,477 (934,442,658)
Recognized in other comprehensive income:
- staff retirement benefits 674,581 (1,384,979)
10 380,933,944 114,896,886
184
11. RETIREMENT BENEFITS
The latest actuarial valuation of the Holding Company’s defined benefit plan was conducted on 30 September
2022 using projected unit credit method. Details of obligation for defined benefit plan are as follows:
Note 2022 2021

Rupees Rupees
11.1 Consolidated statement of financial position
Present value of defined benefit obligation 11.2 282,100,806 240,194,734
Fair value of plan assets 11.3 (258,450,610) (184,207,482)
Net liability at end of the year 23,650,196 55,987,252

11.2 Movement in liability for funded
defined benefit obligation
at beginning of the year 240,194,734 189,817,372
Current service cost for the year 25,956,103 20,868,916
at end of the year 11.1 282,100,806 240,194,734
11.3 Movement in fair value of plan assets

Return on plan assets excluding interest income 21,854,410 12,534,635
Contributions made during the year 58,781,330 104,674,839
Remeasurement on plan assets 4,529,206 (246,515)
Fair value of plan assets at end of the year 11.1 258,450,610 184,207,482

11.4 Charge for the year
Consolidated statement of profit or loss:
Current service cost 25,956,103 20,868,916
Return on plan assets excluding interest income (21,854,410) (12,534,635)
28,488,460 51,270,277
Other comprehensive income
Remeasurement on plan assets (4,529,206) 246,515
(2,044,186) 4,775,791
26,444,274 56,046,068
11.5 Movement in experience losses

Opening experience losses – –
Experience losses 2,044,186 (4,775,791)
Charge to other comprehensive income (2,044,186) 4,775,791
Closing experience losses – –
JDW GROUP 185

2022 2021
Break up of plan assets Rupees % Rupees %
Mutual funds 57,077,277 22% 50,672,665 28%
Term Deposit Receipts 110,472,397 43% 110,520,765 60%
Term Finance Certificates 31,440,296 12% – 0%
Cash at bank 59,460,640 23% 23,014,052 12%
258,450,610 100% 184,207,482 100%

11.6 Risks on account of defined benefit plan
The Holding Company faces the following risks on account of defined benefit plan:

Final salary risk - The most common type of retirement benefit is one where the benefit is linked with
final salary. The risk arises when the actual increases are higher than expectation and impacts the
liability accordingly.

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

Investment risk - The risk arises when the actual performance of the investments is lower than
expectation and thus creating a shortfall in the funding objectives.

Withdrawal risks – The risk of higher or lower withdrawal experience than assumed. The final effect
could go either way depending on the beneficiaries’ service/age distribution and the benefit.
11.7 Expected future contribution

Expected future contribution for the year ending 30 September 2023 is Rs. 30.711 million (2022: Rs.
26.246 million).

11.8 Actuarial assumptions sensitivity analysis
The below sensitivity analysis of the defined benefit obligation to the significant actuarial assumptions
has been performed using the same calculation techniques as applied for calculation of defined benefit
obligation reported in these consolidated statement of financial position. If the significant actuarial
assumptions used to estimate the defined benefit obligation at the reporting date, had fluctuated by
100 bps with all other variables held constant, the impact on the present value of the defined benefit
obligation as at 30 September 2022 and 2021 would have been as follows:

Impact on defined benefit obligation
2022 2021
Change Increase Decrease Increase Decrease
Rupees
Discount rate 100 BPS (23,355,229) 26,921,458 (19,484,759) 22,824,367
Salary growth rate 100 BPS 26,083,843 (23,055,602) 22,016,306 (19,152,247)

If longevity increases by 1 year, the resultant increase in obligation is insignificant.

Although the analysis does not take account of the full distribution of cash flows expected under the
plan, it does provide an approximation of the sensitivity of the assumptions shown.
186
2022 2021
11.9 Principal actuarial assumptions used
Valuation discount rate 13.25% 10.50%
Salary increase rate 13.25% 10.50%
Expected return on plan assets 13.25% 10.50%
Retirement assumption 60 years 60 years
Weighted average duration of obligation 9 year 8.8 year
Mortality rate SLIC 2001 - 2005 SLIC 2001 - 2005
Withdrawal rate Moderate Moderate
2022 2021
Rupees Rupees
11.10 Maturity profile
1 - 5 years 178,617,636 97,416,889
6 - 10 years 143,312,839 119,242,326
11 - above years 1,276,937,097 701,367,483

Note 2022 2021
Rupees Rupees
12. DEFERRED INCOME - GOVERNMENT GRANT
Recognized during the year 8.2 – 10,377,270
Amortized during the year 41 (25,862,000) (52,263,447)
– 25,862,000
under current liabilities 14 – (24,996,355)
Balance as at 30 September – 865,645

Note 2022 2021
Rupees Rupees
13. SHORT TERM BORROWINGS
Mark-up based borrowings from conventional
banks - secured
- Cash finances 13.1 9,235,755,370 1,118,382,821
- Running finances 13.2 2,641,916,225 1,340,057,324
- Finance against trust receipts 13.3 270,733,089 83,026,419
12,148,404,684 2,541,466,564
Islamic mode of financing - secured
- Salam / Istisna / Musawamah / Tijarah finances 13.4 2,681,859,433 542,125,000
- Morabaha / Karobar/ Musharakah finances 13.5 – 350,000,000
2,681,859,433 892,125,000
14,830,264,117 3,433,591,564

13.1 The Group has availed cash finance facilities from various banks aggregated to Rs. 15,000 million
(2021: Rs. 12,250 million). The mark-up rates applicable during the year ranges from one to three
months KIBOR plus 20 to 100 bps per annum (2021: one to three months KIBOR plus 20 to 125 bps per
annum) on utilized limits. These facilities are secured against pledge charge over white refined sugar
bags at 10% to 25% margin, corporate guarantee of the Holding Company and personal guarantees of
all Directors of the Holding Company.
JDW GROUP 187

13.2 The Group has obtained running finance facilities aggregating to Rs. 2,921 million (2021: Rs. 1,921
million). The mark-up rates applicable during the year ranges from one to three months KIBOR plus 75
to 100 bps per annum (2021: one to three months KIBOR plus 75 to 100 bps per annum). These are
secured against ranking charge / joint pari passu charge over all present and future current assets,
excluding pledge stock, of the Group, corporate guarantee of the Holding Company and personal
guarantees of the all Directors of the Holding Company.
13.3 The limit of finance against trust receipt facility is Rs. 480 million (2021: Rs. 480 million). It carries mark-
up ranging from one to six months KIBOR plus 100 bps per annum (2021: one to six months KIBOR plus
100 bps per annum). These are secured against ranking charge / joint pari passu charge over present
and future current assets, excluding pledge stock, of the Group, trust receipt, corporate guarantee of
the Holding Company and personal guarantees of the sponsor Directors of the Holding Company.
13.4 The Group has obtained Salam / Istisna / Musawamah / Tijarah financing facilities from various banks
aggregating to Rs. 10,584 million (2021: Rs. 8,085 million). The mark-up rates applicable during the
year ranging from one to six months KIBOR plus 50 to 100 bps per annum (2021: three to six months
KIBOR plus 50 to 100 bps per annum). These facilities are secured against pledge charge over white
refined sugar bags at 10% to 25% margin and personal guarantees of sponsor Directors of the Holding
Company.
13.5 The Group has availed Morabaha / Karobar / Musharakah finance facilities aggregated to Rs. Nil
(2021: Rs. 350 million). The mark-up rates applicable during the year ranges from three to six month
KIBOR plus 100 bps per annum (2021: three to one year KIBOR plus 75 to 100 bps per annum). These
are secured against ranking charge / joint pari passu charge over present and future current assets,
excluding pledge stock, of the Group, ownership of Karobar finance and personal guarantees of the
sponsor Directors of the Holding Company.
13.6 The available facilities for opening letters of credit and guarantee as on the reporting date aggregate to
Rs. 2,050 million (2021: Rs. 1,950 million) which includes Rs. 580 million (2021: Rs. 450 million) sub-limit
of FATR facility. Further, facilities of amounting Rs. 100 million (2021: Rs. 300 million) remain unutilized
as on reporting date. These are secured against ranking charge / joint pari passu charge over present
and future current assets, excluding pledge stock, of the Group and by lien over local, import & inland
shipping documents, corporate guarantee of the Holding Company and personal guarantees of the
sponsor Directors of the Group.
13.7 Credit facilities as mentioned in note 13.2, 13.3, 13.5 and 13.6 are secured by an aggregate amount of
Rs. 4,714 million (2021: Rs. 8,374 million ) as at reporting date.
Note 2022 2021

Rupees Rupees
14. CURRENT PORTION OF NON-CURRENT LIABILITIES
Lease liabilities 9 776,544,778 790,380,467
Deferred income - Government grant 12 – 24,996,355
4,385,280,678 4,633,829,429
188
Note 2022 2021
Rupees Rupees
15. TRADE AND OTHER PAYABLES
Trade and other creditors 15.1 1,623,535,085 1,301,978,979
Sales tax payable 996,981,883 375,811,979
Accrued expenses 15.2 147,473,501 101,054,714
Payable to Workers’ Profit Participation Fund 15.3 280,677,992 256,254,006
Tax deducted at source 123,860,021 44,155,441
Payable to Workers’ Welfare Fund 15.4 68,629,362 80,976,232
Payable to Employees’ Provident Fund 30,260,305 24,780,257
Retention money 12,212,985 11,123,912
Agriculture Income Tax payable 3,012,782 3,003,164
Other payables 15.5 141,204,623 165,443,960
3,427,848,539 2,364,582,644

15.1 Payable to growers against purchase of sugarcane was Rs. Nil as at 30 September 2022 (2021: Rs. Nil).

15.2 This includes Rs. 97.63 million (2021: Rs. 60.78 million) in respect of market committee fee (for details,
Note 2022 2021

Rupees Rupees
15.3 Payable to Workers’ Profit Participation Fund
- allocation for the year 40 & 45 280,677,992 256,254,006
- interest on funds utilized 41 72,406,795 7,289,820
609,338,793 416,910,882

15.3.1 The interest on funds utilized by the Group is charged higher of interest at the rate of 2.5% above the
bank interest rate or 75 % of the rate at which dividend is declared by the Group as prescribed under the
Companies Profit (Workers Participation) Act, 1968 and Sindh Companies Profit (Workers Participation)
Act, 2021 till the date of distribution of funds to the workers.
Note 2022 2021

Rupees Rupees
15.4 Payable to Workers’ Welfare Fund
Allocation for the year 40 & 45 39,219,566 22,696,751
(Reversal) / Charge of prior year provision 39 (29,572,047) 880,223
90,623,751 136,105,194

15.4.1 Under section 9.2(a) of the EPA, payments for Workers’ Welfare Fund and Workers’ Profit Participation
Fund are recoverable from CPPA-G as a pass through item in relation to Co-Generation Power Plants
segment of the Holding Company only.

Allocation for the year has been made in accordance with provision of the Sindh Workers Welfare Fund
(Amendment) Act, 2021 and Workers Welfare Fund Act, 1971 for Deharki Sugar Mills (Pvt.) Limited -
Subsidiary Company and the Holding Company respectively.
JDW GROUP 189

15.5 These mainly represents deduction from employees against vehicles as per the Group’s finance car
scheme. This includes deposits for Rs. 1.168 million (2021: Rs. 0.844 million) taken from the key
management personnel of the Group.
16. ADVANCES FROM CUSTOMERS

The advances from customers primarily relate to the advance consideration received from customers for sale of
sugar and molasses, for which revenue is recognised at point in time when goods are transferred. Information
regarding the timing of satisfaction of performance obligations underlying the closing contract liability is not
presented since the expected duration of all the contracts entered into with the customers is less than one year.

17. UNCLAIMED DIVIDEND
As at the reporting date, the Holding Company is in the process of complying with the provisions of Section 244
of the Companies Act, 2017.
2022 2021
Rupees Rupees
18. ACCRUED PROFIT / INTEREST / MARK-UP
Mark-up on financing / borrowings from
conventional banks / financial institutions:
790,138,359 279,944,907
Profit on Islamic mode of financing:
253,201,276 29,023,737
1,043,339,635 308,968,644

19. CONTINGENCIES AND COMMITMENTS
19.1 Contingencies
19.1.1 The tax department issued a show cause notice to the Holding Company on 09 April 2013 on the
grounds that the Holding Company has charged Federal Excise duty at the rate of 0.5% instead of 8%
on local supplies made and raised a demand of Rs. 50.68 million. Consequently, the Holding Company
filed a writ petition against this notice in the Honorable Lahore High Court (“Court”) on the basis that the
rate of 0.5% has been charged as allowed by the FBR vide SRO 77(I)/2013 dated 07 February 2013. The
Honorable Lahore High Court decided the matter in favour of the Holding Company by declaring the
afore-mentioned SRO illegal vide order dated 22 November 2013. The Federal Board of Revenue has
filed an intra-court appeal against the order dated 22 November 2013 before Lahore High Court which
is still pending for adjudication. Management of the Holding Company expects a favorable outcome in
this case.

19.1.2 The Holding Company was selected for audit u/s 177 of Income Tax Ordinance, 2001 (“I.T.O”) for Tax
year 2008. Assistant Commissioner of Inland Revenue (“ACIR”) passed an order u/s 122(5) / 122(1) of
I.T.O by making additions on different issues i.e. interest expense, salaries, sale, gain on sale of assets
etc., amounting to Rs. 516 million by reducing brought forward losses. The Holding Company has filed
an appeal before Commissioner Inland Revenue (Appeals) (“CIR(A)”), who vide order dated 06 April
2010 decided appeal in favor of the Holding Company on most of the issues. The department filed an
appeal before Appellate Tribunal Inland Revenue (“ATIR”). Respectable ATIR passed an order in favor of
the Holding Company except for two issues with an aggregate amount of Rs. 72.57 million. The Holding
Company has filed an appeal before Honorable Lahore High Court (LHC), against the order of the ATIR.
The management of the Holding Company is confident that this case will be decided in its favor.
190
19.1.3 The Holding Company (Previously United Sugar Mills Limited) was selected for audit u/s 177 of I.T.O
for Tax year 2008. The Holding Company has filed Writ Petition (WP) before LHC against selection of
audit which was rejected by the LHC. Income tax department initiated audit proceeding and Deputy
Commissioner Inland Revenue (“DCIR”) passed an order u/s 122(4)/(5) of I.T.O by making additions on
different issues and created a demand of Rs. 76.56 million vide order dated 22-12-2017. The Holding
Company filed an appeal before CIR(A), who passed ex-parte order against the Holding Company. The
Holding Company has filed second appeal before (“ATIR”). Appeal was heard and matter has been
remanded back for denovo consideration. The management of the Holding Company is confident that
this case will be decided in its favor.

19.1.4 Additional Commissioner Inland Revenue (“ACIR”) issued show cause notice u/s 122(5A) of I.T.O for
tax year 2011 confronting several matters. The said notice was duly complied and plea of the Holding
Company was largely accepted by the tax department. ACIR passed order u/s 122(5A) of I.T.O by making
additions on different issues and created a demand of Rs. 18.75 million vide order dated 30-06-2017.
The Holding Company filed an appeal before CIR(A). The CIR(A) has decided the case majorly in the
favour of the Holding Company vide order no. 45-A/V dated 22-02-2021. The Federal Board of Revenue
(FBR) has filed appeal before (“ATIR”) against the CIR(A) order which is still pending for adjudication. The
management of the Holding Company is confident that this case will be decided in its favor.
19.1.5 The Holding Company was selected for audit u/s 177 of I.T.O for tax year 2014. DCIR passed an order
u/s 122(1) of I.T.O by making additions on different expenses, amounting to Rs. 163.16 million. The
Holding Company has filed an appeal before CIR(A) who vide order dated 07-03-2018 accepted the tax
payer contention and has granted relief on major issues amounting Rs. 127.03 million and upheld the
remaining issues amounting to Rs. 36.15 million. The Holding Company has filed second appeal before
ATIR against the issues. The hearing of the same is pending. The management of the Holding Company
is confident that this case will be decided in its favor.

19.1.6 The Holding Company was selected for audit u/s 72B of Sale Tax Act, 1990 (the Act) for the period from
June 2013 to July 2014 by the Federal Board of Revenue (‘the FBR’). A sales tax demand was raised
by the tax department on various grounds of Rs. 70.94 million. The Holding Company has filed an
appeal before CIR(A) who vide dated 08-02-2018 has granted relief amounting Rs. 57.37 million and
the remaining issues with an aggregate amount of Rs. 12.62 million were upheld. The Holding Company
has filed second appeal before ATIR. The hearing of the same is pending. The management of the
Holding Company is confident that this case will be decided in its favor.

19.1.7 The Holding Company was selected for audit u/s 214C of I.T.O for tax year 2016. ACIR passed an order
u/s 122(4) / 122(5) of I.T.O by making additions on different issues amounting to Rs. 506 million by
reducing brought forward losses. The Holding Company has filed an appeal before CIR(A) who granted
relief for an amount of Rs. 30.88 million vide its order no. 12/A-V dated 08 April 2021. The Holding
Company has filed second appeal before appellate tribunal (“ATIR”) against the above mentioned order
which is pending for adjudication. The management of the Holding Company is confident that this case
will be decided in its favor.
19.1.8 The Holding Company has filed W.P 67473/2020 & 65212/2019 before LHC challenging the amendment
inserted vide Finance Act, 2019 whereby tax credit under section 65B of I.T.O has been reduced from
10% to 5% for the tax year 2019 and period for availing this credit has also been restricted till 30 June
2019. The Holding Company has claimed tax credit at the rate of 10% for the year ended 30 September
2018 and 30 September 2019 amounting to Rs. 254.9 million and Rs. 94.34 million respectively. Now
the matter is pending before the LHC. The management of the Holding Company expects a favorable
outcome in this case.

19.1.9 A show-cause notice u/s 122(5) of I.T.O was served by DCIR for tax year 2015 confronting bank credits
to the Holding Company. The said notice duly complied and the plea of the Holding Company was
JDW GROUP 191

accepted to some extent in the order dated 15-06-2021. As a result, demand amounting to Rs. 1,555
million was created on account of unexplained bank credits. The Holding Company has filed an appeal
before CIR (A). The CIR (A) remanded back the case to learned DCIR for reassessment and affording
proper time to the Holding Company. The Holding Company has filed second appeal before ATIR
against above mentioned order of CIR (A). The ATIR adjudicated the appeal vide ITA. No. 799/LB/2022
dated 19-05-2022 by remanding back the case to assessing officer for denovo consideration. The
Holding Company has filed reference before LHC against ATIR order. The reference has been admitted
and operation of impugned order dated 19-05-2022 has been suspended. Now the matter is pending
before the LHC. The management of the Holding Company expects a favorable outcome.

19.1.10 A show-cause notice u/s 122(5A)/122(9) of I.T.O was served by Additional CIR for tax year 2015 to
the Holding Company confronting several matters. The notice was duly complied and the plea of the
Holding Company was largely accepted in the order dated 02-07-2021. As a result, demand for Rs.
258.8 million was created on account of proration of expenses and advances from customers. The
Holding Company has filed an appeal before CIR (A). The CIR (A) has granted relief on allocation of
expenses amounting to Rs. 6.9 million only and upheld the advances from customers amounting to Rs.
687.4 million. The Holding Company has filed second appeal before ATIR on advances from customers
against CIR (A) order, which is still pending. The management of the Holding Company expects a
favorable outcome.
19.1.11 A show cause notice under Sale Tax Act, 1990 was served to the Holding Company confronting matter
of inadmissible input sale tax. The said notice was duly complied and plea of the Company was rejected
and a demand of Rs. 19.7 million was created through order dated 09-09-2020. The Company, being
aggrieved, has filed an appeal before CIR (A) who in its order having no. 16/A-V dated 30-04-2021
upheld the decision of DCIR. The Company, being aggrieved, filed second appeal before ATIR who vide
order STA No. 853/LB/2021 dated 25-05-2022 decided the case in favour of the Company. The Federal
Board of Revenue, has filed a sales tax reference before Honorable Lahore High Court challenging the
afore-mentioned order of ATIR. The hearing of the same is pending.

19.1.12 A show cause notice u/s 11(2) of Sale Tax Act, 1990 (the Act) was served to the Holding Company
confronting matter of inadmissible input sale tax for period October 2016 to December 2016. The said
notice was duly complied and plea of the Holding Company was accepted to some extent and a
demand of Rs. 13.3 million was created through order dated August 31, 2021. The Holding Company
has filed an appeal before CIR (A). The CIR (A) adjudicated the matter by deleting tax demand of Rs. 9.47
million and remanded back the input disallowance of Rs. 1.9 million and confirmed the disallowance
amounting to Rs. 1.88 million. The Holding Company has filed second appeal before ATIR against
CIR (A) order which is still pending. The management of the Holding Company expects a favorable
outcome.
19.1.13 A show cause notice u/s 11(2) of Sale Tax Act, 1990 (the Act) was served to the Holding Company
confronting matter of inadmissible input sale tax for period Jan 2017 to March 2017. The said notice
was duly complied and plea of the Holding Company was accepted to some extent and a demand
of Rs. 21.86 million was created through order dated August 31, 2021. The Holding Company has
filed an appeal before CIR (A). The CIR (A) adjudicated the matter by allowing relief of Rs. 1.1 million
and remanded back the input disallowance upto Rs. 17.12 million and confirmed the disallowance
amounting Rs. 3.63 million. The Holding Company has filed second appeal against order of CIR (A)
before ATIR which is still pending. The management of the Holding Company expects a favorable
outcome.

19.1.14 A show cause notice u/s 11(3) of Sale Tax Act, 1990 was served to the Holding Company confronting
matter of suppression of sales. The said notice was duly complied and plea of the Holding Company
was rejected and a demand of Rs. 845.52 million was created vide order dated July 10, 2020. The
192
Holding Company, being aggrieved, has filed appeal before CIR (A), who vide order No. 02/A-V, dated
December 15, 2020 remanded back the case. Thus, tax payable has become nil. The Holding Company
and the tax department both has challenged the decision of CIR (A) in ATIR. The hearing of the appeal
is still pending. However, the management of the Holding Company expects a favorable outcome.

19.1.15 A show-cause notice u/s 8 of Sale Tax Act, 1990 (the Act) dated 16-02-2022 was served by ACIR to
the Holding Company on account of claim of input tax of Rs. 83.85 million for the period July-2021
to November-2021. The ACIR has finalized the proceeding vide its order no. 19473 dated May 12,
2022 disallowing input tax of Rs. 19.52 million & imposing penalty of Rs. 0.975 million. The Holding
Company has filed an appeal before CIR (A) against the order of ACIR. The CIR (A) adjudicated the
appeal by confirming the disallowance and penalty imposed by ACIR. The Holding Company has filed
second appeal against order of CIR (A) before ATIR which is pending. The management of the Holding
Company expects a favorable outcome.

19.1.16 A show-cause notice u/s 73(4) Sale Tax Act, 1990 (the Act) dated 14-02-2022 was issued by ACIR to the
Holding Company on account of claim of inadmissible input tax amounting to Rs. 11.614 million for the
period July-2020 to November-2021. The ACIR finalized the proceeding vide his order no. 18484 dated
April 25, 2022 by confirming the said disallowance. The Holding Company has filed an appeal before
CIR (A) against the order of ACIR. The CIR (A) adjudicated the appeal by deleting the disallowance upto
Rs. 0.950 million and confirmed the disallowance amount of Rs. 10.66 million. The Holding Company
has filed second appeal against order of CIR (A) before ATIR challenging the vires of section 73(4)
which is pending. It may be noted that constitutionality of the section 73(4) of the Act has already been
challenged in the LHC who also granted interim relief in cases where order has not been passed. The
management of the Holding Company expects a favorable outcome.

19.1.17 The DCIR has passed an order dated 28-06-2019 by making additions amounting to Rs. 41.1 million
for Tax Year 2016. The Holding Company has filed an appeal before CIR(A) against the said order. The
CIR(A) has confirmed the additions made by DCIR vide order dated 24-10-2022. The Holding Company
has filed second appeal before appellate tribunal (“ATIR”) against the above mentioned order which is
pending for adjudication. The management of the Holding Company expects a favorable outcome.

19.1.18 The Holding Company has filed Writ Petition before the Honorable Lahore High Court challenging the
ultra vires of section 4C of the Income Tax Ordinance, 2001. The Honorable Lahore High Court has
granted interim relief in the afore-mentioned petition till the final decision of Court. The financial impact
of Super Tax u/s 4C of the Income Tax Ordinance, 2001 amounting to Rs. 132.6 million for Tax Year 2022
has not been recognized in these consolidated financial statements.
19.1.19 The tax department issued a show cause notice to the Subsidiary Company - DSML on May 23, 2013 on
the grounds that the DSML has charged Federal Excise duty at the rate of 0.5% instead of 8% on local
supplies made and raised a demand of Rs. 15.8 million. Consequently, DSML filed a writ petition against
this notice in the Honorable Sindh High Court (“Court”) on the basis that the rate of 0.5% has been
charged as allowed by the FBR vide SRO 77(I)/2013 dated 07 February 2013. The Court suspended
the proceedings of the notice and the final outcome of the case is pending. Management of the DSML
expects a favorable outcome in this case. Hence no provision has been made in these consolidated
financial statements.

19.1.20 The Subsidiary Company - DSML filed writ petition before Honorable Lahore High Court (“Court”)
challenging the amendment inserted vide Finance Act, 2019 whereby tax credit under section 65B of
Income Tax Ordinance, 2001 has been reduced from 10% to 5% for tax year 2019 and period for availing
this credit has also been restricted till June 30, 2019. The DSML prayed for the grant of relief regarding
filing of tax returns for tax year 2019 with tax credit @ 10% i.e. Rs. 26.5 million. Management of the DSML
expects a favorable outcome in this case.

JDW GROUP 193

19.1.21 The Subsidiary Company - DSML has filed appeals before the Commissioner Inland Revenue - Appeals
(CIRA) against the penalty orders issued under section 182 of the Income Tax Ordinance, 2001 for Tax
Year 2015 and 2019 amounting to Rs. 2,143 million and Rs. 2,788 million respectively. The matter is still
pending with the office of the CIR(A), Karachi. The DSML has also obtained stay from the Honorable
Sindh High Court against the above-mentioned demands till the decision of appeals by CIR(A).
Management of the DSML expects a favorable outcome in this case.

19.1.22 The Ministry of Interior (GoP) had constituted the Inquiry Commission under the Pakistan Commission
of Inquiry Act, 2017 dated 16 March 2020 to probe into the increase in sugar prices in the country.
The Commission of Inquiry selected 10 units of sugar mills including 3 units of the Holding Company,
accordingly report of the Inquiry Commission has been issued dated 21 May 2020. The Commission
of Inquiry in its report has highlighted discrepancies with respect to Benami Transactions (Prohibition)
Act, 2017 with respect to the standard business practice of Pakistan sugar industry. The Commission
of inquiry has revealed that names of the brokers may be masked, by the sugar mills, and there is
risk of sales in benami / fictitious names. The Commission of Inquiry in its report has also highlighted
discrepancies in crushing capacity of the Holding Company (refer to note 51) and claimed that such
enhancement and enlargement was made in the period of ban on capacity enhancement/enlargement.
(Show cause notices have already been issued by the Directorate of Industries, Punjab for both Units
I and II of the Holding Company way back in 2014 and matter is still pending). In addition to above,
Pakistan Sugar Mills Association (PSMA) along with its member sugar mills, including the Holding
Company and its Subsidiary Company - DSML, filed writ petition 1544/2020 before the Honorable
Islamabad High Court (IHC) challenging the initiation of inquiry, Constitution of the Commission Inquiry
and all action taken pursuant thereto. Vide short order dated 20 June 2020, this above petition was
disposed off and the commission’s report upheld. PSMA along with its member sugar mills, including
the Holding Company and DSML, challenged the order before the Division Bench of IHC in Intra Court
Appeal (ICA) No. 156 of 2020. This ICA was dismissed on 18 August 2020. Thereafter, on 26 October
2020, PSMA and the Holding Company and DSML filed Civil Petition for to Leave to Appeal (CPLA)
No. 2697 of 2020 against the judgment dated 18 August 2020 before the Honorable Supreme Court of
Pakistan. The Holding Company and DSML has a good prima facie case.

19.1.23 A petitioner has filed Constitution Petition (CP) No. 3823 of 2018 in the Honorable High Court of Sindh
against the Holding Company (Unit III at Ghotki) and DSML along with other sugar mills dated 15 May
2018 for withdrawal/cancellation/refunding of the cash freight subsidy on sugar export approved by the
Cabinet Economic Coordination Committee and additional cash freight subsidy approved by the Sindh
Cabinet. The matter is pending adjudication.
19.1.24 The matter of fixation of minimum price of sugarcane fixed under relevant notifications for crushing
season 2014 - 2015 and 2017-2018 issued by the Government of Sindh was challenged by sugar
mills including Unit III of the Holding Company and DSML before the Honorable High Court of Sindh
(the Honorable Court). During the proceedings, an interim arrangement was reached out between the
parties whereby price of Rs. 172 was fixed out of which Rs. 160 were to be paid by the Mills and Rs.
12 were to be paid by the Government. The said arrangement was subject to the final outcome in the
decision of the Honorable Supreme Court of Pakistan in Appeals. The management of the Holding
Company and DSML believes that the matter will ultimately be decided in favor of the Holding Company
and DSML. Furthermore, the Holding Company and DSML along with other sugar mills have also filed
petition in the Honorable Supreme Court challenging the minimum price fixation mechanism, which is
also pending before the Honorable Supreme Court.

19.1.25 A petitioner has filed civil suit no. 1296 of 2005 in the Honorable Sindh High Court against the Holding
Company who has claimed a sum of Rs. 446 million and entitlement to retain the possession of and run
the Unit II of the Holding Company unless the dues of the plaintiff have been fully paid. The matter is
pending adjudication.
194
19.1.26 The Secretary and Administrator of the Market Committee (MC) issued notices to Units I and II of
the Holding Company demanding arrears on account of market fee for crushing season 2016-
2017 to 2018-2019 amounting to Rs. 16.45 million. The Holding Company has filed an appeal
before the Director Agriculture (E&M) against such notices which is pending adjudication.

Further, the Holding Company was in a Constitutional Writ Petition challenging notification No. DIR
(FB) XV-II8I-VIII dated 02 August 2017 issued by the Govt of the Punjab whereby market committee
fee was enhanced for purchase of sugarcane from 50 paisa to 1 rupee per 100 kg and for Sugar &
molasses from 1 rupee to 2 rupees per 100 kg vide order dated 18.12.2020, the said writ petition was
referred to the Secretary Agriculture for deciding the grievance in the light of new legal framework.
However, the Secretary Agriculture, Govt. of Pakistan via order dated 07 July 2021 concluded that said
notification is valid from its issuance and demanded Rs. 76.8 million. The Holding Company has filed
an W.P. 55108/2021 against above order and notification. The High Court of Lahore has restrained the
authorities from taking any coercive measures. The case is currently pending adjudication. (for details,
refer to note 15.2).

19.1.27 Federal Investigation Agency (FIA) has registered various cases revolving around issues like Money
Laundering and collusion against accused from within the Holding Company for misappropriation of
public holder money. The allegations, however, were so weak that till to date, FIA officials after complete
and thorough investigation failed to incriminate the accused due to deficient evidence and also have not
submitted report. As per legal counsel of the Holding Company, it would be a disservicing to the Holding
Company to make an assessment of financial loss that could be incurred, in any.

19.1.28 The Holding Company has filed a WP 59553/2021 against Federation of Pakistan in the Honorable
Lahore High Court and challenging the lifting of sugar from the mill at ex-mill price as determined
Rs. 84.75/kg through SRO. 1259(I)2021 dated 21 September 2021. However, such Writ Petition has
disposed off vid order dated 29 September 2021 and concluded that benefit shall be extended to
consumers for any excess amount charged as per above mentioned SRO and appellate Committee
Order dated 07 October 2021. However, the Holding Company has filed intara court appeal 61698/2021
and WP 63011 & 61692/2021 in the Honorable Lahore High Court against such order and notification.
The Holding Company has also file C.P.L.A 2050/2021 in the Honorable Supreme Court of Pakistan
against above mentioned order and notices. The matter is pending adjudication.

19.1.29 Employee Old Age Benefits Institution (EOBI) issued show cause notices to the Holding Company
demanding an amount of Rs. 7,084,800 and Rs. 5,313,600 in respect of employees of Unit-I & Unit-
II respectively for the period October, 2015 to September, 2016. Further, the Adjudicating Authority
passed an order dated 08 December 2020 against the Holding Company and directed to recover the
demanded amount immediately. The Holding Company has filed appeal against such order. The matter
is pending adjudication. Further, during the year, Adjudicating Authority, Lahore issued assessment
order and demand notice to the Holding Company and DSML demanding an amount of Rs. 12,038,176
and Rs. 11,502,410 in respect of employees of Unit III of the Holding Company and DSML for the period
July, 2018 to June, 2020 respectively. The Holding Company and DSML has filed complaint before
Adjudicating Authority, Lahore for setting aside of impugned assessment order and impugned demand
notices. The matter is pending adjudication.

19.1.30 The Honorable Sindh High Court passed an order in C.P. no. D-1313/2013 dated 12 February 2018,
according to which, in the case of trans-provincial companies, the companies are required to pay
Workers’ Profit Participation Fund (WPPF) under the Sindh Companies Profits (Workers’ Participation
Act), 2015. Sindh Revenue Board (SRB) vide the impugned judgment issued notice to the Holding
Company for the non payment of WPPF as per the impugned judgment. The Holding Company has
filed an C.P.L.A 954/2018 against this order in the Honorable Supreme Court and impugned judgment
of the Honorable Sindh High Court has been suspended. However, allocation for the year has been
recognized in accordance with provision of the Companies Profit (Workers’ Participation) Act, 1968 (for
details, refer to note 15.3).
JDW GROUP 195

19.1.31 The Holding Company received various show cause notices from the Sindh Revenue Board (SRB)
demanding payment of Sindh Workers’ Welfare Fund for the period 2015 to 2017 for Rs. 116 million. The
Holding Company has challenged the said notice through C.P. 7956/2019 in High Court of Sindh on the
ground that after the 18th Amendment, SRB and Federation of Pakistan, both can only collect Workers’
Welfare Fund (WWF) from the Holding Company after a law is enacted catering to WWF collection from
trans-provincial organizations. Further, august Supreme Court of Pakistan, in CA. No. 1583 of 2014 has
held that exclusive jurisdiction rested with the Parliament and Federation of Pakistan in respect of labour
matters of trans-provincial organizations. The Federation of Pakistan and the Province of Sindh along
with SRB have been made parties in the said matter. The Holding Company’s legal counsel is of the
view that the Holding Company, being a trans-provincial organization, has a good chance of success.
However, provision for the year has been recognized in accordance with the Workers Welfare Fund
Ordinance, 1971 (for details, refer to note 15.4).

19.1.32 The Holding Company and DSML has filed an appeal No. 55, 56 & 57 of 2022 and No. 6 of 2021 & No.
15 of 2022 before the Competition Appellate Tribunal against the order dated 13 August 2021 of the
Competition Commission of Pakistan (‘’CCP’’) in which a penalty of Rs. 8,237.78 million and Rs. 747.37
million was imposed on the Holding Company and DSML respectively. However, Appellate Tribunal has
restrained the CCP from adopting any coercive measures against the Holding Company and DSML for
recovery of the fine in its order dated 02 June 2022. The appeal is pending adjudication.

The Holding Company and DSML also challenged the order dated 13 August 2021 before the Lahore
High Court in Writ Petition No. 64858 of 2021 & 64850 of 2021 respectively. The operation of said order
has been suspended and CCP has been restrained from recovering the penalty imposed in terms of an
order of the Lahore High Court dated 18 October 2021. The matter is pending adjudication before the
Lahore High Court.

19.1.33 As at 30 September 2022, several cases were filed against the Holding Company and DSML before
various court of laws relating to claims and settlements of dues, etc., the amount of which cannot be
determined. The management of the Holding Company and DSML, based on the opinion of the legal
counsel expects that the outcome of all these cases will be in favour of the Holding Company and
DSML, as they have a reasonable defense in the cases filed. Accordingly, no provision has been made
in these consolidated financial statements.

19.1.34 In year 2016, the subsidiary companies (SPL & GPL) was formed for establishment of Bagasse
Base Power Plant with generation capacity of 45-MW and accordingly, both SPL & GPL has adopted
Upfront Tariff 2013 and Framework for Power Cogeneration 2013 (Bagasse and Biomass) vide order
of National Electric Power Regulatory Authority (‘NEPRA’) dated 11.9.2017. Hence later on, sudden
shift in Government power policy and renewable energy projects pushed at back-burner including the
SPL & GPL project. Accordingly, the Central Power Purchasing Agency (Guarantee) Limited (CPPA-G)
refused to issue Energy Purchase Consent on “Take or Pay bases”. The both SPL & GPL have filed
review petition against NEPRA Tariff Ruling, which was rejected by NEPRA, then CPPA-G approached
Islamabad High Court through Writ Petition No. 1571/2018, the same is pending adjudication. Witnessing
the Government policy shift from renewable energy and ancillary issues, the operations of the both
companies project were put on hold for the time being.

19.1.35 Civil suit titled Ghotki Power (Private) Limited and Sadiqabad Power (Private) Limited (subsidiary
companies) Vs. Alternate Energy Development Board (AEDB) & 3 others, instituted before the Court
of Senior Civil Judge, (West) Islamabad, impugning the decision of Alternate Energy Development
Board dated 5-8-2020 to the extent of encashment of a Bank Guarantee No. 1398LBG170654 and No.
1398LBG170655 respectively submitted by the both subsidiary companies in the process of setting up
a Bagasse Based Generation Power Project. The suit is pending adjudication before the Court of Senior
Civil Judge, (West) Islamabad for evidence of AEDB.

196
Based on the opinion of legal advisors of the Holding Company, DSML, SPL & GPL, management is
expecting a favorable outcome of the above cases from 19.1.23 to 19.1.29, 19.1.32 and 19.1.34 to
19.1.35. Therefore, no provision has been recognized in these consolidated financial statements.

19.1.36 Guarantees issued by the banks on behalf of the Group in favour of various parties as at the reporting
date aggregate amounts to Rs. 899 million (2021: Rs. 965 million).

19.1.37 The Group has availed growers financing facilities from various banks aggregated to Rs. 2,271 million
(2021: Rs. 1,315 million). The mark-up rates applicable during the year ranges from one year KIBOR
plus 240 to 300 bps per annum (2021: one year KIBOR plus 240 to 250 bps per annum). The Group has
provided counter guarantees to various banks against growers financing facilities as at the reporting
date amounts to Rs. 3,395 million (2021: Rs. 2,520 million) and personal guarantees of sponsor directors
of the Group (for details, refer to note 30.1).

19.1.38 Guarantees issued by the banks on behalf of the Holding Company in favor of Sadiqabad Power
(Private) Limited and Ghotki Power (Private) Limited, wholly owned subsidiary companies, as at the
reporting date aggregate amounts to Rs. Nil (2021: Rs. 38 million).

19.1.39 The Holding Company has issued cross corporate guarantees of Rs. 944 million (2021: Rs. 751.3
million) on behalf of Deharki Sugar Mills (Private) Limited - wholly owned subsidiary, to secure the
obligations of subsidiary company towards their lenders.
Note 2022 2021

Rupees Rupees
19.2 Commitments
19.2.1 Letters of credit for import of machinery

and its related components

Holding Company - JDWSML 19.2.1.1 404,899,443 201,323,470
Subsidiary Company - DSML 94,096,363 19,553,572
498,995,806 220,877,042

19.2.1.1 It includes shipping guarantee amounting to Rs. nil (2021: Rs. 8.812 million).
19.2.2 Commitments in respect of operation and maintenance cost of Co - Generation Power Plants contracted
for but not incurred as at 30 September 2022 amounts to Rs. Nil (2021: Rs. 115.33 million).
Note 2022 2021

Rupees Rupees
20. PROPERTY, PLANT AND EQUIPMENT
Operating fixed assets 20.1 22,595,408,838 23,211,878,042
Capital work in progress 20.2 224,145,180 60,266,380
Stores, spare parts and loose tools held for
capital expenditure 20.3 93,966,175 105,167,132
22,913,520,193 23,377,311,554
JDW GROUP 197

198
20.1 Operating fixed assets
Reconciliation of ending balances by classes of assets is as follows:
20.1.1

Cost Depreciation
Carrying
Owned
FINANCIAL
Freehold land 2,392,979,913 - - 2,392,979,913 - - - - - 2,392,979,913
Factory building on freehold land 2,943,163,304 - (1,060,000) 2,942,103,304 10% 1,624,311,390 130,405,654 (563,145) 1,754,153,899 1,187,949,405
- -
Non-factory building on freehold land 1,058,076,026 13,907,082 (44,619,735) 1,027,363,373 5% - 5/20 years 452,297,285 30,223,978 (10,139,808) 472,381,455 554,981,918
- -
Plant and machinery 26,474,438,216 114,366,627 (56,086,750) 26,529,972,802 5% - 5/10 years 9,143,969,624 891,633,215 (39,190,785) 9,994,569,543 16,535,403,259
(2,745,291) (1,842,511)
Sugarcane roots 776,236,276 651,405,712 - 1,061,299,933 3 years 274,848,701 302,772,325 - 330,681,596 730,618,337
(366,342,055) - (246,939,430)
STATEMENTS
Motor vehicles 2,024,877,480 201,781,971 101,709,512 2,162,629,547 20% - 5 years 1,742,965,022 98,584,084 60,376,380 1,771,678,445 390,951,102
(165,739,416) (130,247,041)
Electrical installation 192,745,624 4,432,541 11,200,736 207,259,790 10% - 10 years 102,836,738 10,378,814 5,625,003 118,040,230 89,219,560
(1,119,111) (800,325)
Office equipment 83,366,008 3,515,653 (10,704,741) 75,623,088 20% - 5 years 65,176,058 3,444,604 (9,103,596) 59,046,976 16,576,112
(553,832) (470,090)
Tools and equipment 88,561,624 3,096,242 (722,426) 90,935,440 10% 44,117,011 4,590,182 (320,371) 48,386,822 42,548,618
- -
Furniture and fixture 32,742,429 1,445,914 (12,669,557) 21,279,957 10% - 10 years 19,677,215 1,239,936 (6,529,918) 14,174,491 7,105,466
(238,829) (212,742)
Weighbridge 46,824,436 - 1,226,011 48,050,447 10% - 10 years 28,426,371 1,962,408 960,377 31,349,156 16,701,291
- -
Cost Depreciation
Carrying
Roads and boundary wall 170,564,168 - 44,390,410 214,954,578 10% - 5 years 107,834,764 11,794,863 10,109,085 129,738,712 85,215,866
- -
Arms and ammunitions 8,272,259 - 72,348 8,344,607 10% - 10 years 5,886,908 238,535 72,348 6,197,791 2,146,816
- -
Fire fighting equipment 82,815,232 - 2,535,355 85,350,587 20% 65,779,405 3,758,518 778,591 70,316,514 15,034,073
- -
Aircrafts 902,022,925 59,754,736 - 961,777,661 10% 412,811,389 53,245,340 - 466,056,729 495,720,932
- -
Tube well 9,556,913 - 50,441,119 59,998,032 10% - 5 years 5,940,827 3,296,054 38,706,035 47,942,916 12,055,116
- -
Computers 88,059,208 5,358,449 12,733,717 100,004,404 33% - 3 years 66,545,291 9,648,143 9,233,248 79,803,350 20,201,054
(6,146,970) (5,623,332)
37,375,302,041 1,059,064,927 98,445,999 37,989,927,463 14,163,423,999 1,557,216,653 60,013,444 15,394,518,625 22,595,408,838
(542,885,504) (386,135,471)

20.1.2 Additions in operating fixed assets included transfer from capital work in progress and stores, spare parts and loose tools held for capital expenditure amounting to
Rs. 739.038 million (2021: Rs. 517.34 million) and Rs. 28.9 million (2021: Rs. 60.92 million) respectively.

20.1.3 Transfers to motor vehicles represents transfer of vehicles from right-of-use assets at carrying value amounting to Rs. 38.8 million (2021: Rs. 14.11 million).

20.1.4 Property, plant and equipment of the Group are kept secured with the banks under ranking and joint pari passu charge, for obtaining long term financing. This charge
will exist till 31 January 2027. For details, refer to note 8.
20.1.5 Operating fixed assets having carrying amount Rs. 94 (2021: Rs. 94) as at 30 September 2022 have been retired from active use and not classified as held for sale in
accordance with IFRS 5.
JDW GROUP
199
200
Reconciliation of beginning balances by classes of assets is as follows:
20.1.6
Cost Depreciation
Carrying
Owned
Freehold land 2,349,698,225 43,281,688 - 2,392,979,913 - - - - - - 2,392,979,913

FINANCIAL
- -
Factory building on freehold land 2,958,858,193 - - 2,943,163,304 10% 1,491,866,698 145,269,298 - - 1,624,311,390 1,318,851,914
(15,694,889) (12,824,606)
Non-factory building on 1,043,809,291 14,551,040 - 1,058,076,026 5% - 5/20 years 417,941,907 34,355,378 - - 452,297,285 605,778,741
freehold land (284,305) -
Plant and machinery 26,958,453,782 34,962,882 - 26,474,438,216 5% - 5/10 years 8,655,507,342 940,685,353 - 17,768,134 9,143,969,624 17,330,468,592
(518,978,448) (469,991,205)
Sugarcane roots 744,430,754 498,972,201 - 776,236,276 3 years 211,930,205 216,431,818 - - 274,848,701 501,387,575
(467,166,679) (153,513,322)
Motor vehicles 2,016,156,996 41,618,809 56,371,350 2,024,877,480 20% - 5 years 1,654,561,271 111,285,249 42,254,670 - 1,742,965,022 281,912,458
STATEMENTS
(89,269,675) (65,136,168)
Electrical installation 193,810,877 6,177,860 - 192,745,624 10% 96,759,740 10,011,527 - 1,301,680 102,836,738 89,908,886
(7,243,113) (5,236,209)
Office equipment 81,939,032 1,515,276 - 83,366,008 20% - 5 years 60,221,754 4,985,488 - 55,641 65,176,058 18,189,950
(88,300) (86,825)
Tools and equipment 90,881,036 1,884,742 - 88,561,624 10% 42,423,913 4,974,976 - 176,886 44,117,011 44,444,613
(4,204,154) (3,458,764)
Furniture and fixture 31,164,026 2,068,773 - 32,742,429 10% - 10 years 17,698,802 2,413,624 - 33,849 19,677,215 13,065,214
(490,370) (469,060)
Weighbridge 47,424,436 - - 46,824,436 10% 26,933,050 2,049,139 - - 28,426,371 18,398,065
(600,000) (555,818)
Cost Depreciation
Carrying
Roads and boundary wall 170,868,140 - - 170,564,168 10% 100,885,150 6,998,299 - - 107,834,764 62,729,404
(303,972) (48,685)
Arms and ammunitions 8,224,057 272,642 - 8,272,259 10% 5,817,662 258,544 - - 5,886,908 2,385,351
(224,440) (189,298)
Fire fighting equipment 82,815,232 - - 82,815,232 20% 61,520,448 4,258,957 - - 65,779,405 17,035,827
- -
Aircrafts 873,689,731 28,333,194 - 902,022,925 10% 360,964,930 51,846,459 - - 412,811,389 489,211,536
- -
Tube well 10,173,641 - - 9,556,913 10% 5,823,432 435,021 - 6,997 5,940,827 3,616,086
(616,728) (324,623)
Computers 84,897,192 4,919,493 - 88,059,208 33% 58,247,912 9,717,410 - 64,554 66,545,291 21,513,917
(1,757,477) (1,484,585)
37,747,294,641 678,558,599 56,371,350 37,375,302,041 13,269,104,216 1,545,976,540 42,254,670 19,407,741 14,163,423,999 23,211,878,042
(1,106,922,550) (713,319,168)
JDW GROUP
201
20.1.7 Particulars of immovable property (i.e. land and building) in the name of Group are as follows:
Usage of immovable Total area

Location property (Acres)
Mauza Shirin, Jamal Din Wali, District Rahim Yar Khan Manufacturing facility 318.60
Machi Goth, Sadiqabad, District Rahim Yar Khan Manufacturing facility & Co-Gen Power Plant 187.15
Village Laluwali, District Ghotki Manufacturing facility & Co-Gen Power Plant 157.03
Mauza Kamoo Shaheed, Taluka Ubauro, Mirpur Mathelo, Ghotki Manufacturing facility 120.18
Mangowal, Gujrat Manufacturing facility 28.38
59-A, Gulberg, Lahore Record room / space for corporate office 0.65
29-B, Gulberg, Lahore Rest house 0.30
Agricultural Land - Punjab (various locations)* Agriculture land 1,014.32
Agricultural Land - Sindh (various locations)* Agriculture land 1,078.98

The buildings on freehold land and other immovable fixed assets of the Group are constructed / located
at above mentioned freehold land.

* Due to large number of area, it is impracticable to disclose the name of each location of these
immovable fixed assets, as required under Paragraph 1(b) of the 4th Schedule to the Companies Act,
2017.
20.1.8 Land measuring 158.5 Kanals/19.81 acres situated at Sadiqabad is under litigation by virtue of an
appeal filed by the Holding Company, whereby the Additional Commissioner Revenue, Bahawalpur has
granted stay order in the favour of the Holding Company dated 08 November 2021 against order dated
26 October 2021 passed by the Additional Deputy Commissioner Revenue, Bahawalpur. The matter is
pending adjudication.
Note 2022 2021

Rupees Rupees
20.1.9 Depreciation charge for the year has
been allocated as follows:
Cost of goods manufactured 36.1 1,020,132,294 1,135,761,773
1,557,216,653 1,545,976,540

20.1.10 Impairment charge for the year ended 30 September 2021 had been allocated to cost of goods
manufactured.
202
20.1.11 Detail of disposals of operating fixed assets
The details of operating fixed assets disposed off / written off during the year are as follows:
Accumulated Net book Sales Gain / Mode of Relationship

Description Particulars of purchaser Cost depreciation value value (loss) disposal with the Group

Motor vehicles
Toyota Corolla Altis Mr. Umair Khalid 2,395,500 1,854,233 541,267 2,025,000 1,483,733 Negotiation Ex. Employee
Toyota Corolla Altis Mr. Bashir Ahmed 2,399,000 1,141,956 1,257,044 1,303,271 46,227 Negotiation Ex. Employee
Toyota Corolla Altis Mr. M. Attique Khan 1,985,000 1,425,654 559,346 610,500 51,154 Company Policy Ex. Employee
Toyota Corolla GLI Mr. Kamal-Ur-Rehman 1,800,000 1,297,775 502,225 540,000 37,775 Company Policy Employee
Toyota Corolla Altis Mr. M Zaman Khan 2,015,500 1,372,025 643,475 604,650 (38,825) Company Policy Employee
Toyota Corolla Altis Mr. Raza Zaidi 2,015,500 1,372,025 643,475 604,650 (38,825) Company Policy Employee
Toyota Corolla Altis Dr. Faqir Gulzar 2,010,000 1,446,404 563,596 603,000 39,404 Company Policy Employee
Toyota Corolla XLI Mr. Bilal Yaqoob 1,655,000 1,017,267 637,733 662,000 24,267 Company Policy Employee
Toyota Corolla GLI Mr. M. Ramzan 1,800,000 1,225,792 574,208 540,000 (34,208) Company Policy Employee
Toyota Corolla Altis Mr. Jawad Rashid 3,396,000 951,533 2,444,467 3,700,000 1,255,533 Company Policy Employee
Toyota Corolla XLI Mr. Naweed Rashid 2,041,500 1,237,365 804,135 598,840 (205,295) Company Policy Employee
Suzuki Swift M. Ramzan Adeel 1,585,000 768,296 816,704 348,711 (467,993) Company Policy Employee
25,098,000 15,110,325 9,987,675 12,140,622 2,152,947
Assets - written off
Sugarcane roots 366,342,055 246,939,430 119,402,625 - - Company policy
Others 14,580,709 12,635,665 1,945,044 - - Company policy
380,922,764 259,575,095 121,347,669 - -
Assets having net book value
less than Rs. 500,000 136,864,740 111,450,051 25,414,689 126,313,935 100,896,860
2022 542,885,504 386,135,471 156,750,033 138,454,557 103,049,807
2021 1,106,922,550 713,319,168 393,603,382 65,846,167 36,451,248
Note 2022 2021

Rupees Rupees
20.2 Capital work in progress
Transfers made during the year (739,038,817) (517,340,981)

20.2.1 Reconciliation of carrying amounts by classes of assets is as follows:
2022
Transferred to
Advances for vehicles 31.2 30,670,978 64,281,164 (30,670,978) 64,281,164

Building 11,579,326 18,855,950 (14,039,562) 16,395,714
Plant and machinery 16,419,823 169,971,044 (42,922,565) 143,468,302
Sugarcane roots 20.2.2 1,596,253 649,809,459 (651,405,712) –
60,266,380 902,917,617 (739,038,817) 224,145,180

JDW GROUP 203

2021
Transferred to
Advances for vehicles 31.2 – 30,670,978 – 30,670,978

Building 14,516,860 11,613,506 (14,551,040) 11,579,326
Plant and machinery – 20,237,562 (3,817,739) 16,419,823
Sugarcane roots 20.2.2 82,560 500,485,895 (498,972,202) 1,596,253
14,599,420 563,007,941 (517,340,981) 60,266,380

20.2.2 Additions in sugarcane roots included transfer from biological assets amounting to Rs. 369 million
(2021: Rs. 288.156 million).
Note 2022 2021

Rupees Rupees
held for capital expenditure
123,071,898 171,109,167
Transferred to operating fixed assets 20.1.2 (28,941,390) (60,922,298)
Charged to consumption / adjustments (164,333) (5,019,737)
(29,105,723) (65,942,035)

21. RIGHT-OF-USE ASSETS
2022
Balance as at 01 October 45,446,352 1,362,720,555 471,458,460 1,879,625,367

Deletions during the year – (95,685,274) (540,632) (96,225,906)
Transfer to operating fixed
assets - net book value – – (38,838,956) (38,838,956)
Impact of remeasurement 51,986,278 – – 51,986,278
Balance as at 30 September 61,030,916 1,813,183,236 479,786,028 2,354,000,180
under current assets (27,741,791) (664,235,994) (38,314,532) (730,292,317)
33,289,125 1,148,947,242 441,471,496 1,623,707,863

204
2021
As at 01 October 83,561,321 839,299,150 253,601,056 1,176,461,527

Deletions during the year – (32,325,447) – (32,325,447)
Derecognition due to sublease – (68,940,024) – (68,940,024)
Transfer to operating fixed
assets - net book value – – (14,116,680) (14,116,680)
Impact of remeasurement (1,487,689) (7,935,666) – (9,423,355)
As at 30 September 45,446,352 1,362,720,555 471,458,460 1,879,625,367
under current assets – – (43,462,361) (43,462,361)
45,446,352 1,362,720,555 427,996,099 1,836,163,006


21.1 The Group’s obligations under leases of vehicle are secured by the lessor’s title to the leased assets.
Generally, the Group is restricted from assigning and subleasing the leased assets. There are several
lease contracts that include extension and termination options, which are further discussed in note 4.4.
Leases for vehicles may contain an option to purchase the underlying leased asset outright at the end
of the lease and the Group has the intention to exercise such option.
21.2 The depreciation charge on right-of-use assets for the year has been allocated as follows:
Note 2022 2021

Rupees Rupees
790,316,478 576,415,656

22. INVESTMENT PROPERTY
Investment property represents agricultural land measuring 401.04 acres (2021: 401.04 acres) situated at various
locations of Tehsil Sadiqabad, District Rahim Yar Khan given on operating lease having the fair value of Rs. 577
million as at 30 June 2022. The value of investment property was determined by approved external, independent
property valuer i.e. Hamid Mukhtar and Co. (Pvt.) Limited by using the market comparable method and categorize
as level 2 fair value (i.e. significant observable inputs). The most significant input in this valuation approach is
price / rate per acre in particular locality.
JDW GROUP 205

22.1 Forced sale value of the investment property as per the latest valuation report is Rs. 462 million (2021:
Rs. 276 million).
22.2 The Group as a lessor has entered into operating leases contract having lease terms upto 2 years.
Maturity analysis of future operating lease rentals are as follows:
2022 2021
Rupees Rupees
Less than one year 14,618,381 11,853,433
More than one year – 8,184,825
14,618,381 20,038,258

Note 2022 2021
Rupees Rupees
23. INTANGIBLES
Goodwill 23.1 608,310,693 608,310,693
Oracle / computer software 23.2 2,391,422 4,436,932
610,702,115 612,747,625
Note 2022 2021

Rupees Rupees
23.1 Goodwill
As at 01 October 608,310,693 608,310,693
Less: Impairment charge / reversal
for the year 23.1.1 & 23.1.2 – –
As at 30 September 608,310,693 608,310,693

23.1.1 Goodwill on United Sugar Mills Limited and Ghotki Sugar Mills (Private) Limited

Goodwill includes Rs. 568,545,391 and Rs. 39,765,302 arisen at the time of mergers of United Sugar
Mills Limited and Ghotki Sugar Mills (Private) Limited into the Holding Company. For impairment testing,
the recoverable amount of both cash generating units are determined based on value in use calculation
which uses cash flow projections approved by the Board of Directors covering a five-year period using
the average discount rate of 13.94% per annum (2021: 15.46% per annum). The calculation of value in
use is sensitive to discount rate and key commercial assumptions. The discount rate reflects current
market assessment of the rate of return required for the business and is calculated using the Capital
Asset Pricing Model. The discount rate reflects the Weighted Average Cost of Capital of the Holding
Company. Management’s key assumptions include stable profit margins, based on past experience
in this market. No expected efficiency improvements have been taken into account and prices and
wages reflect publicly available forecasts of inflation for the industry. Management believes that after
considering the various scenarios no reasonably possible change in any of the above key assumptions
would cause the carrying value of the unit to materially exceed its recoverable amount. Based on this
calculation, no impairment is required to be accounted for against the carrying amount of goodwill.

206
23.1.2 Goodwill on Faruki Pulp Mills Limited - FPML

Keeping in view the commercial viability of the plant and substantial accumulated losses, the
management of FPML believes that FPML may not be able to realize its assets and discharge its
liabilities in the normal course of business and prepared its financial statements for the year ended 30
September 2022 and 2021 on liquidation basis of accounting. Accordingly, management of the Group
has estimated the recoverable amount of investment in FPML Rs. 760.405 million (2021: Rs. 666 million)
as determined by the independent valuer. The recoverable amount was estimated based on valuation
technique used as mention below and categorise as level 3 fair value.
Further, FPML through an extraordinary general meeting held on 25 March 2020, has resolved to
dispose of its property, plant and equipment either in parts or in their entirety to the prospective buyers
after due process. However, due to COVID-19 situation in the country this was not completed during the
financial year 2020 and the said arrangement was re-approved by the FPML shareholders in its EOGM
held on 13 December 2021. However, subsequent to year end, the management of FPML has initiated
the tendering process for disposal of assets of FPML under guideline set by the Board.

Valuation techniques used to derive fair values of the underlying assets

Carrying Recoverable
Valuation technique used
Value amount
Rupees Rupees
Net current assets 7,462,454 7,462,454 The carrying amount is assumed to approximate the fair value
as these are reported at amounts not less than those at which
these are expected to be recovered.

Property, plant and equipment 644,532,037 752,943,466 Sales comparison approach for the freehold land and
depreciated replacement cost for plant & machinery and
ancillary equipment.

2022 651,994,491 760,405,920
2021 582,283,258 665,975,620

FPML engaged an independent valuer, to assess the recoverable amount of the property, plant and
equipment based on fair value less costs of disposal calculation. The fair value of freehold land has
been derived using a sales comparison approach. Sale prices of comparable land in close proximity
are adjusted for differences in key attributes such as location and size of the land. The most significant
input in this valuation approach is price per acre which has significant change from prior year.
The fair value of plant, machinery and ancillary equipment is based on depreciated replacement
cost approach taking into account the prevailing market value of identified items and net realizable
value assets grouped according to machinery class, adjusted against depreciation, price indices and
exchange differences on imported assets. The fair value of building and civil work is based on depreciated
replacement cost approach taking into account the construction features and measurements of built
area involved.
The following table summarizes the quantitative and qualitative information about the significant
unobservable inputs used in fair value measurements.

JDW GROUP 207

Description Significant unobservable Quantitative data / range and
inputs relationship to the fair value
Buildings and civil works Cost of construction of a The prevailing market rate of
similar building and structure. construction has been
determined by taking into
account the finishes required in
wood pulp manufacturing
industry.
Straight line depreciation The versatility and general

applied for usage from date conditions of the building have
of construction. been used to estimate the
Forced sale value used since straight line basis of depreciation
FPML is liquidating its assets. of the building.

Plant and machinery and Cost of acquisition of similar The market value has been
ancillary equipment machinery with similar level of determined by using cost
technology. of acquisition of similar
plant and machinery with
similar level or technology
and applying a suitable
depreciation factor
based on remaining useful
lives of plant and equipment.
Suitable depreciation rate The higher the cost of

to arrive at depreciated acquisition of similar machinery,
replacement value. the higher the fair value of plant
and equipment. Furthermore,
Forced sale value used since higher the depreciation rate, the
FPML is liquidating its assets. lower the fair value of items.

Note 2022 2021
Rupees Rupees
23.2 Oracle / computer software
Cost 22,747,279 22,747,279
Accumulated amortization
As at 01 October 18,310,347 16,261,990
Amortization for the year 23.2.1 2,045,510 2,048,357
20,355,857 18,310,347
As at 30 September 2,391,422 4,436,932

Rate of amortization 10% - 33% 10% - 33%

23.2.1 Amortization for the year has been allocated to administrative expense.
208
Note 2022 2021
Rupees Rupees
24. LONG TERM INVESTMENTS
Kathai-II Hydro (Private) Limited (“KHL”) 24.1 – –
JDW Power (Private) Limited (“JDWPL”) 24.2 – –
– –
Less: Classified under current assets
as short term investments
JDW Power (Private) Limited (“JDWPL”) 24.2.1 – –
Classified under non - current assets – –
Note 2022 2021

Rupees Rupees
24.1 Kathai-II Hydro (Private) Limited (“KHL”)
250 (2021: 250) fully paid shares of Rs. 10 each
Equity held 20% (2021: 20%) 2,500 2,500
Share of post acquisition reserve:
Brought forward post acquisition loss (2,500) (2,500)
Share of loss for the year 24.1.1 – –
(2,500) (2,500)
Balance as at 30 September – –

24.1.1 Equity method has been applied on audited financial statements for the year ended June 30, 2022
(2021: June 30, 2021). Post acquisition reserves restricted to the cost of investment, therefore share of
loss amounted to Rs. 204,831 (2021: Rs. 210,968) for the year has not taken under equity method. The
summarized audited financial information of KHL is as follows:
Note 2022 2021

Rupees Rupees
Revenue – –
Loss for the year (1,024,154) (1,054,840)
Company’s share of loss 24.1.1 (204,831) (210,968)
Other comprehensive income for the year – –
Company’s share of other comprehensive income – –
Note 2022 2021

Rupees Rupees
24.2 JDW Power (Private) Limited (“JDWPL”)
9,000,000 (2021: 9,000,000) fully paid
Equity held 47.37% (2021: 47.37%) 90,000,000 90,000,000
Less: Accumulated impairment allowance (90,000,000) (90,000,000)
Balance as at 30 September 24.2.1 – –
24.2.1 On 11 July 2019, the shareholders of JDWPL through an extra ordinary general meeting passed a
resolution for the winding up of JDWPL, subsequently management of the JDWPL has applied to the
Securities and Exchange Commission of Pakistan (SECP) for the approval of winding up.

JDW GROUP 209

25. LONG TERM DEPOSITS

These includes security deposits with conventional banks and Islamic financial institution/banks in respect of
leasing facilities availed against right-of-use assets amounting to Rs. 4.46 million and Rs. 90.75 million (2021: Rs.
7.97 million and Rs. 86.89 million) respectively. Current maturity of long term deposits for Rs. 13.04 million (2021:
Rs. 13.37 million) are presented under current assets (refer to note 31). The fair value adjustment in accordance
with the requirements of IFRS 9 ‘Financial Instruments’ arising in respect of long term security deposits other
than right-of-use assets for Rs. 15.32 million (2021: Rs. 12.21 million) is not considered material and hence not
recognized. This also includes an advance amounting to Rs. 1.85 million (2021: Rs. 1.55 million) due from JDW
Aviation (Pvt.) Limited, an associated company. The maximum aggregate amount outstanding during the year
with respect to month end balances amounts to Rs. 4.56 million (2021: Rs. 4.25 million). These deposits do not
carry any interest or markup.
Note 2022 2021

Rupees Rupees
26. LEASE RECEIVABLES
Balance as at 01 October 69,633,908 –
Recognised during the year – 112,922,359
Impact of early termination (13,718,278) –
Impact of remeasurment 3,589,965 –
Receipt during the year / other adjustment (62,210,714) (48,812,122)
Balance as at 30 September 26.2 – 69,633,908

26.1 It presents sub-lease of agriculture land for lease term 1 to 1.5 years. The incremental borrowing rate
applied to lease receivable is 9.71% (2021: 8.70%).

26.2 The following undiscounted /discounted lease payments to be received after the reporting date are as:
2022 2021
Rupees Rupees
Total undiscounted lease receivable – 72,261,312
Unearned finance income – (2,627,404)
Discounted lease receivables – 69,633,908

26.3
The risks associated with rights the Group retains in underlying assets are not considered to be
significant, the Group employs strategies to further minimise these risks as ensuring all contracts include
clauses requiring the lessee to submit security cheque during the lease term which will be refundable at
the end of lease term.

210
27. BIOLOGICAL ASSETS
2022

At the beginning of the year at fair value 2,333,366,150 1,317,463 52,436 464,157 – 2,335,200,206
Further cost charged during the year 36.1.1.1 1,118,077,306 33,010,047 – 4,728,157 – 1,155,815,510
of agricultural produce 36.1.1 816,440,302 40,338,568 126,064 16,268,878 – 873,173,812
Decrease due to harvest (4,267,883,756) (74,666,078) (178,500) (21,461,194) – (4,364,189,528)
Cost incurred on standing crops 39.1.1 2,397,069,755 836,163 – 737,668 – 2,398,643,586
At the end of the year at fair value 2,853,458,837 836,163 – 737,666 – 2,855,032,666

2021

At the beginning of the year at fair value 1,816,363,807 955,781 – 1,408,532 1,387,860 1,820,115,980
Further cost charged during the year 36.1.1.1 767,924,711 23,398,351 13,749,388 4,546,700 194,116 809,813,266
of agricultural produce 36.1.1 838,458,688 52,309,317 (3,277,778) 14,170,131 153,620 901,813,978
Decrease due to harvest (3,422,747,205) (76,663,449) (10,471,610) (20,125,363) (1,735,597) (3,531,743,224)
Cost incurred on standing crops 39.1.1 1,964,493,216 1,317,463 52,436 464,158 – 1,966,327,273
At the end of the year at fair value 2,333,366,150 1,317,463 52,436 464,157 – 2,335,200,206
JDW GROUP
211
27.1 Measurement of fair values
27.1.1 Fair value hierarchy
In absence of active market for standing sugarcane crop, the fair value measurement for the standing
sugarcane crop has been categorised as Level 3 fair value based on the inputs to the valuation
techniques used. Fair value has been determined by independent professional valuer, Osam Consultants
Engineers as at 30 September 2022 on the basis of a discounted cash flow model. The valuation model
considers the present value of the net cash flows expected to be generated by the standing sugarcane
crop at maturity, in its most relevant market, and includes the potential biological transformation and
related risks associated with the asset. The cash flows projections include specific estimates for next
year which mainly include crop’s expected yield and expected production costs and costs to sell. The
expected cash flows are discounted using an average risk adjusted discount rate.
27.1.2 Valuation techniques and significant unobservable inputs

The key variables, assumptions and the impact of changes in those is given below:
Unit 2022 2021

Valued plantations (Actual)
- Punjab Zone Acres 8,736 9,615
- Sindh Zone Acres 11,102 11,174

Estimated further production costs and
costs to sell per acre
- Punjab Zone Rupees 117,558 87,842
- Sindh Zone Rupees 112,582 73,013

Estimated yield per acre
- Punjab Zone Maunds 942 892
- Sindh Zone Maunds 857 790

Harvest age Months 12 - 14 12 - 14

Estimated future sugarcane
support price per maunds
- Punjab Zone Rupees 300 225
- Sindh Zone Rupees 302 250

Risk - adjusted discount rate % per month 0.81% 0.98%

Cost of biological assets other than standing sugarcane crop of Rs. 1.57 million (2021: Rs. 1.83 million)
is considered to approximate their respective fair value less costs to sell as these assets are still at a
very early stage of plantation and it is considered that insignificant biological transformation has taken
place or the impact of fair value measurement is not significant.

212
27.2 Sensitivity analysis
Impact of changes in key subjective assumptions on fair value of biological assets is given below:

Increase / Increase /
(Decrease) (Decrease)
2022 2021
Rupees Rupees
Decrease of 10% in estimated average yield per acre (498,013,252) (288,169,555)
Increase of 10% in estimated further production cost (212,667,368) (151,464,625)
Increase of 10% in estimated average selling price
per maund 498,013,252 384,801,240
Increase of 10% in discount rate (11,452,384) (11,239,328)

27.3 Risk management strategy related to agricultural activities
The Group is exposed to the following risks relating to its sugarcane cultivation.

Regulatory and environmental risks
The Group is subject to various laws and regulations in Pakistan. The Group has established
environmental policies and procedures aimed at ensuring compliance with local environmental and
other laws. Management performs regular reviews to identify environmental risks and to ensure that the
systems in place are adequate to manage those risks.
Climate and other risks

Due to inherent nature of the agricultural assets, it contains elements of significant risks and uncertainties
which may adversely affect business and resultant profitability, including but not limited to the following:
i) adverse weather conditions such as floods etc. affecting the quality and quantity of production; and

ii) potential insect, fungal and weed infestations resulting in crop failure and reduced yields.

The Group is principally dependent upon the Government’s measures for flood control. The Group
follows an effective preventive pesticide / insecticide / fungicide program, regularly monitors the crops
for any infestations and takes immediate curative measures. As per assessment of crop losses in Sindh
Province using satellite data by International Centre for Integrated Mountain Development and Pakistan
Agricultural Research Council, the Pakistan’s Sindh Province is projecting 61% loss of the expected
production of sugarcane due to 2022 Pakistan floods. The floods struck before the harvesting stage
of key crops of the Group e.g. sugarcane. The Group’s sugarcane crop is predominantly grown in
the northeastern districts, where flood inundation remained relatively lower. Management of the Group
expect lesser production of sugarcane due to 2022 Pakistan floods.
Supply and demand risk

The price of sugarcane is driven by consumer demand of sugar as well as Government’s intervention
in setting of minimum / support price for the grower. Surplus production or bumper crop may result in a
lower selling price hence affecting profitability of the Group adversely. The Group manages this risk by
aligning its harvest volume to market supply and demand. Management performs regular industry trend
analysis for projected harvest volume and analysis.

JDW GROUP 213

Note 2022 2021
Rupees Rupees
28. STORES, SPARE PARTS AND LOOSE TOOLS
Stores:
- Sugar 1,235,765,208 926,083,919
- Corporate Farms 537,236,178 396,847,011
1,938,265,315 1,487,473,074
Spare parts:
- Sugar 608,984,969 602,693,106
706,226,916 685,251,975
Loose tools:
- Sugar 44,633,468 41,378,145
55,932,402 50,590,218
2,700,424,633 2,223,315,267

Less: Provision for obsolescence 28.1 (482,899,915) (574,058,014)
28.3 2,217,524,718 1,649,257,253

28.1 This includes reversals of Rs. 159.05 million (2021: Rs. 23.39 million) which is included in cost of goods
manufactured.

28.2 Stores, spare parts and loose tools was mortagaged as security against short term borrowings (refer to
note 13).
28.3 It includes 2,891 items of store, spare parts and loose tools which had been discarded in prior periods
and measured at nil value.

Note 2022 2021
Rupees Rupees
29. STOCK-IN-TRADE
Sugar 29.1 16,905,020,652 3,230,570,741
Bagasse 935,260,218 251,138,904
Mud 78,680,116 13,607,935
36 17,918,960,986 3,495,317,580

29.1 The closing stock of sugar, net of 10% to 25% margin, having carrying value of Rs. 11,917 million (2021:
Rs. 1,660 million) has been pledged against cash finance obtained from commercial and Islamic banks
(for details, refer to note 13).
Note 2022 2021

Rupees Rupees
30. TRADE RECEIVABLES
Considered good 30.1 & 30.2 3,920,509,349 4,496,926,781
Considered doubtful - local 100,391,459 51,672,219
4,020,900,808 4,548,599,000
Less: Impairment allowance 30.3 (100,391,459) (51,672,219)
3,920,509,349 4,496,926,781
214
30.1 It includes net carrying amount of Rs. 1,254 million (2021: Rs. 699 million) receivables from growers
against sale of agri inputs. The gross carrying amount of such receivables amounting to Rs. 3,530
million (2021: Rs. 2,014 million) is off set by Rs. 2,275 million (2021: Rs. 1,315 million) in line with
accounting policies of the Group as stated in note 4.20.5 to the financial statements (for details, refer to
note 19.1.37).
30.2 These also includes Rs. 2,279 million (2021: Rs. 3,185 million) receivable from CPPA-G on account
of sale of electricity under Energy Purchase Agreements. These are secured by a guarantee from the
Government of Pakistan under the Implementation Agreements (IAs), however, a delayed payment mark-
up is charged in case the amounts are not paid within due dates. The rate of delayed payment mark-up
charged during the year on outstanding amounts was 3MK+2% to 3MK+4.5% (2021: 3MK+2% to
3MK+4.5%) per annum.

30.2.1 The Holding Company had filed a Writ Petition No. 1298 against CPPA-G’s decision of unilaterally making
an unauthorized set-off of Rs. 4,062.01 million from the energy invoices (fixed energy) of the Holding
Company based on its interpretation of the Upfront Tariff for New Bagasse Based Co-Generation Power
Projects dated 29 May 2013 (2013 Upfront Tariff) determined by the NEPRA as opted by and applied to
the Holding Company. The petition is currently pending adjudication before the Honorable Islamabad
High Court.

However, Pursuant to the provisions of the Master Agreement and EPA Amendment Agreement as
mentioned in note 1.2, CPPA-G and the Holding Company shall jointly proceed to file application for
disposal of pending litigation before the Court which are in under process and and at present, no any
unlawfully deducted/disputed amount is recoverable as CPPA-G has made full payment to the Holding
Company for such unlawfully deducted/disputed amount as agreed. Accordingly, the Holding Company
has assessed that amounts aggregating Rs. Nil (2021: Rs 3,326 million) are no longer recoverable as
referred in note 40.
Note 2022 2021

Rupees Rupees
30.3 Movement for impairment allowance
Impairment against delayed payment
markup - CPPA - G 40 & 45 48,719,240 –
Recovered during the year – (5,912,056)

Note 2022 2021
Rupees Rupees
31. ADVANCES, DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES
Short term advances 31.1 – 600,000,000
Advances to suppliers and contractors 31.2 384,562,678 185,077,548
Advances to growers 31.3 534,701,497 347,856,235
Prepaid expenses 45,606,445 37,461,329
Current portion of long term security deposits 25 13,036,630 13,371,450
Other short term security deposits 31.4 88,500,690 44,517,500
Advances to staff 31.5 14,722,110 19,634,472
Sugar export subsidy 31.6 – –
Other receivables 31.7 25,334,897 8,436,550
1,106,464,947 1,256,355,084

JDW GROUP 215

31.1 The Subsidiary Company “ DSML” has entered into an agreement dated 08 January 2021 with JK Sugar
Mills (Pvt.) Ltd. (‘JKSML’) to provide the short term secured advance up to aggregate amount to Rs. 1
billion (2021: Rs. 1 billion), for period of one year. This is receivable as and when funds were available
with JKSML or upon demand of the DSML, provided that the entire outstanding principal amount
reduced to zero by the end of term. Mark up is receivable quarterly at the average borrowing rate of the
DSML ranging from 8.78 % to 11.48 % (2021: 8.26 % to 8.57 % per annum). Further, these advances /
loan are secured by personal guarantee of one director of JKSML with an amount aggregating to Rs.
1.3 billion.
Note 2022 2021

Rupees Rupees
31.2 Advances to suppliers and contractors
- Considered good 31.2.1 448,843,842 215,748,526
509,434,978 276,339,662
Less: Advances for vehicles 20.2.1 (64,281,164) (30,670,978)
Less: Provision for doubtful advances 31.2.2 (60,591,136) (60,591,136)
384,562,678 185,077,548

31.2.1 This includes Rs. 74,148 (2021: Rs. 693,043) due to / from Lahore Flying Club (Guarantee) Limited, an
associated company as Makhdoom Syed Ahmad Mahmud, a Non-Executive Director, is also president
of Lahore Flying Club (Guarantee) Limited. The maximum aggregate amount outstanding during the
year with respect to month end balances amounts to Rs. 0.53 million (2021: Rs. 1.01 million). These are
neither past due nor impaired.
Note 2022 2021

Rupees Rupees
31.2.2 Provision for doubtful advances
Reversal of provision for the year – (7,091,784)
Balance at end of the year 60,591,136 60,591,136
31.3 Advances to growers

- Considered good 534,701,497 347,856,235
539,639,463 352,794,201
Less: Provision for doubtful advances (4,937,966) (4,937,966)
31.3.1 534,701,497 347,856,235

31.3.1 This represents advances provided to various sugarcane growers in the form of cash, seeds and agri-
implements. These carry interest rates ranging from 10% to 17% (2021: 12% to 17%) per annum and will
be adjusted against sugarcane payment in forthcoming crushing season.
31.4 This includes Rs. 88.5 million (2021: Rs. 36.8 million) in respect of security deposit paid to Utility Stores
Corporation of Pakistan against the tender of sale of sugar.

These also includes Rs. Nil (2021: Rs. 7.72 million) deposited agaisnt bank guarantee given by MCB
Bank Limited on behalf of the Subsidaries Companies - SPL & GPL in favor of the Alternative Energy
Development Board (“AEDB”) against Letter of Interest having validity up to January 09, 2021.

216
Note 2022 2021
Rupees Rupees
31.5 Advances to staff
- against salaries 11,077,078 17,275,175
- against expenses 3,645,032 2,359,297
31.5.1 14,722,110 19,634,472

31.5.1 These represent advances given to staff as in accordance with the Group’s policy.
Note 2022 2021

Rupees Rupees
31.6 Sugar export subsidy
Considered good – –
19.1.23 498,493,590 498,493,590
– –

31.7 Other receivables
Considered good 31.7.1 25,334,897 8,436,550
31.7.2 28,931,231 12,032,884
25,334,897 8,436,550

31.7.1 It includes Rs. nil (2021: Rs. 3.406 million) due from key management personnel of the Group. The
maximum aggregate amount outstanding during the year with respect to month end balances amounts
to Rs. nil (2021: Rs. 3.41 million). These were neither past due nor impaired.
31.7.2 It includes Rs. 21.35 million (2021: Rs. Nil) receivable in respect of sub-lease of land and are classified
as operating lease in line with accounting policies of the Group as stated in note 4.4.3 to these
consolidated financial statements.
Note 2022 2021

Rupees Rupees
32. CASH AND BANK BALANCES
At banks:
Current accounts
- Balance with conventional banks 332,347,315 261,386,412
- Balance with Islamic banks 74,754,946 14,494,119
407,102,261 275,880,531
Saving accounts
- Deposits with conventional banks 32.1 28,996,915 1,952,027
436,099,176 277,832,558
Cash in hand 4,846,210 6,108,517
440,945,386 283,941,075

32.1 The balances in savings accounts are placed under mark-up arrangements and bear mark-up ranging
from 5.50% to 14.25% (2021: 5.50%) per annum.
JDW GROUP 217


33. ASSETS / (LIABILIITIES) CLASSIFIED AS HELD FOR SALE
As explianed in note 23.1.2 to the consolidated financial statements, the Board of Directors of the Subsidiary
Company “FPML” through an extraordinary general meeting held on 25 March 2020, resolved to dispose of its
property, plant and equipment either in parts or in their entirety to the prospective buyers after due process.
However, due to COVID-19 situation in the country this was not completed during the financial year 2020 and the
said arrangement was re-approved by the FPML shareholders in its EOGM held on 13 December 2021.However,
subsequent to year end, the management of FPML has initiated the tendering process for disposal of assets of
FPML under guideline set by the Board.
As at 30 September 2022, the disposal group is stated at lower of carrying value or fair value less cost to sell i.e.
carrying value which comprised of the following assets and liabilities:
Note 2022 2021

Rupees Rupees
Disposal group

Operating fixed assets 70,000,000 70,000,000
Capital work-in-progress - net 828,942,347 828,942,347
Advances, deposits, prepayments
and other receivables – 9,000
Cash and bank balances 43.3 49,262,692 53,488,517
Assets held for sale 948,205,039 952,439,864

Trade and other payables 33,633,018 33,358,049
Provision for tax 2,960,714 4,059,242
Liabilities held for sale 36,593,732 37,417,291
Net assets 911,611,307 915,022,573
Note 2022 2021

Rupees Rupees
34. NON - CONTROLLING INTEREST - “NCI”
NCI percentage 41.10% 41.10%

Net assets 33 911,611,307 915,022,573

Net assets attributable to NCI 374,672,247 376,074,277
218
Note 2022 2021
Rupees Rupees
35. REVENUE FROM CONTRACTS WITH CUSTOMERS
Disaggregation of revenue based on:

35.1 Segments
Sugar
Sugar - Local 51,211,264,019 52,602,345,341
Molasses - by product 35.1.1 9,914,365,971 6,297,213,958
Agri Inputs 3,495,975,809 2,226,158,961
Mud - by product 404,349,826 307,621,245
Bagasse - by product 322,472,112 63,948,810
65,348,427,737 61,497,288,315
Co-Generation Power 35.1.2 3,641,150,936 3,631,419,740
Corporate Farms 35.1.3 99,466,147 127,047,728
69,089,044,820 65,255,755,783

35.1.1 Molasses - by product
- Sale under DTRE (Duty & Tax Remission for Exporters) 8,984,640,650 5,971,538,128
- Others 929,725,321 325,675,830
9,914,365,971 6,297,213,958

35.1.2 Co-Generation Power
Variable energy price 2,219,199,529 2,214,816,346
Fixed energy price 1,421,951,407 1,416,603,394
3,641,150,936 3,631,419,740

35.1.3 Corporate Farms
Sugarcane seed and others crops 99,466,147 127,047,728

35.1.4 Timing of revenue recognition
Products transferred at a point in time 65,447,893,884 61,624,336,043
Products transferred over time 3,641,150,936 3,631,419,740
69,089,044,820 65,255,755,783

35.2 Revenue recognised during the year included Rs. 1,404 million (2021: Rs. 4,510 million) that was
included in contract liabilities / advances from customers at the beginning of the year.
JDW GROUP 219

Note 2022 2021
Rupees Rupees
36. COST OF REVENUE
Opening stock-in-trade 3,495,317,580 4,709,113,989
Add: Cost of goods manufactured 36.1 72,549,817,338 52,484,496,385
Add: Freight and other costs related to contracts 30,478,146 31,670,765
76,075,613,064 57,225,281,139
Less: closing stock-in-trade
- Sugar (16,905,020,652) (3,230,570,741)
- Bagasse (935,260,218) (251,138,904)
- Mud (78,680,116) (13,607,935)
29 (17,918,960,986) (3,495,317,580)
36.1.3 58,156,652,078 53,729,963,559

Note 2022 2021
Rupees Rupees
36.1 Cost of goods manufactured
Cost of crops consumed
(including procurement and other costs) 36.1.1 61,558,707,512 43,914,952,080
Salaries, wages and other benefits 36.1.2 3,433,213,490 2,857,829,098
Cost of agri inputs 3,138,358,789 1,926,737,652
Depreciation of operating fixed assets 20.1.9 1,020,132,294 1,135,761,773
Packing materials consumed 720,569,528 357,809,681
Chemicals consumed 664,964,886 277,641,259
Stores and spare parts consumed 28.1 536,639,428 450,559,018
Operation and maintenance 36.1.4 221,032,622 212,629,695
Cost of bagasse consumed 205,742,182 176,464,222
Sugarcane roots written off 20.1.11 119,402,625 313,653,357
Insurance 99,221,676 94,446,002
Oil, lubricants and fuel consumed 84,187,132 71,908,353
Mud and bagasse shifting expenses 75,912,925 34,787,327
Provision for obsolescence 67,896,799 194,747,416
Handling and storage 33,371,701 25,207,769
Freight and octroi 12,891,220 7,164,551
Telephone and fax 10,313,706 6,955,187
Initial land preparation 4,901,749 3,838,072
Assets written off 1,356,428 49,458,922
Bad debt written off – 3,572,212
Impairment of operating fixed assets – 19,407,740
Other expenses 29,706,011 19,084,015
72,549,817,338 52,484,496,385
220
Note 2022 2021
Rupees Rupees
36.1.1 Cost of crops consumed
Sugarcane purchased 56,986,072,800 40,288,107,825
Cost of harvested crops

Fair value of standing crops transferred
to profit or loss 39.1 2,335,200,206 1,820,115,980
Fair value gain on initial recognition of agricultural produce 27 & 39 873,173,812 901,813,978
Further cost charged 36.1.1.1 1,733,380,064 1,193,070,739
4,941,754,082 3,915,000,697
Less: transferred to capital work in progress (369,119,370) (288,156,442)
61,558,707,512 43,914,952,080
36.1.1.1 Further cost charged

Salaries, wages and other benefits 36.1.1.1.1 341,344,599 237,182,249
Fuel expenses 207,009,907 111,970,191
Harvesting expense 129,443,354 122,225,319
Seed expenses 4,234,493 3,798,038
Insurance 2,829,745 3,806,408
Others 12,849,564 13,659,156
Cost charged to biological assets 27 1,155,815,510 809,813,266

Transportation expenses 567,301,490 375,073,455
Road cess 10,263,064 8,184,018
577,564,554 383,257,473
36.1.1 1,733,380,064 1,193,070,739

36.1.1.1.1 Salaries, wages and other benefits include Rs. 7.03 million (2021: Rs. 5.87 million) in respect of
36.1.2 Salaries, wages and other benefits includes contribution to provident fund of Rs. 82.39 million (2021:
(2021: Rs. 35.89 million).
JDW GROUP 221

36.1.3 It includes estimated loss of bagasse by fire amounting to Rs. 29.6 million (2021: Nil).
2022 2021
Rupees Rupees
36.1.4 Operation and maintenance
Reimbursable expenses 188,632,622 180,229,695
Operating fee 32,400,000 32,400,000
221,032,622 212,629,695
Note 2022 2021

Rupees Rupees
37. ADMINISTRATIVE EXPENSES
Salaries, wages and other benefits 37.1 2,160,117,805 2,009,679,248
Charity and donations 37.2 176,045,660 81,850,000
Legal and professional services 77,595,244 126,521,891
Vehicle running and maintenance 59,990,523 47,701,853
Insurance 32,070,738 23,924,678
Fee and taxes 24,929,604 15,385,311
Telephone, fax and postage 11,508,831 11,720,237
Subscription and renewals 10,119,699 17,543,606
Auditors’ remuneration 37.3 9,057,750 7,122,250
Office renovation 6,259,598 4,072,281
Entertainment 5,708,948 8,698,752
Amortization of intangible asset 23.2.1 2,045,510 2,048,357
Advertisement 1,512,580 242,350
Assets written off 588,616 –
Expense relating to leases of less than 12 month 450,000 –
Newspapers, books and periodicals 311,890 324,690
Other expenses 18,336,948 14,570,881
2,875,576,418 2,589,772,225

37.1 Salaries, wages and other benefits includes contribution to provident fund of Rs. 42.81 million (2021:
(2021: Rs. 15.38 million).
222
Note 2022 2021
Rupees Rupees
37.2 Donations for the year have been given to:
- Tareen Education Foundation 71,000,000 61,250,000
- Lodhran Pilot Project 38,000,000 10,500,000
- Pak-Afghan Cooperation Forum 37.2.1 10,000,000 –
- The Citizens Foundation 2,000,000 –
- Water proof tent & Mosquito nets for flood affectees 17,385,660 –
- Prime Minister’s Flood Relief Fund 10,000,000 –
- KPK CM’s Flood Relief Fund 5,000,000 –
- Professional Education Foundation 1,500,000 1,000,000
- National Society for M.E.H Children 1,000,000 1,000,000
- Donation for flood relief efforts to:
- Ameer Buksh Khan Bhutto 2,000,000 –
- Ihsan Ullah Khan 5,000,000 –
- Ihsan Alam 2,500,000 –
- Muhammad Sohail 5,000,000 –
- Muhammad Zahir Shah 2,500,000 –
- Mr. Syed Inam 1,000,000 –
- Syed Zafar Abbas Shah 500,000 –
- Medi Bank trust – 3,200,000
- Lahore Race Club – 2,000,000
- Special Education and Training Centre – 1,000,000
- Others 37.2.2 1,660,000 1,900,000
37.2.3 176,045,660 81,850,000

37.2.1 It represents a relief package consist of 100 MT sugar for Afghan earthquake affectees is delivered to
Afghanistan with the efforts of Pak Afghan Cooperation Forum.

37.2.2 Others’ include donations paid to various institutions or individual. The aggregate amount paid to a
single institution / individual is less than Rs. 1 million.

37.2.3 None of the Directors of the Group or their spouses have any interest as Director in any of the recipients
of donations made by the Group during the year.
JDW GROUP 223

Note 2022 2021
Rupees Rupees
37.3 Auditors’ remuneration
Riaz Ahmad Saqib Gohar & Co.
Auditors’s of JDWSML, DSML, SPL & GPL

Statutory audit 5,330,000 4,850,000
Half yearly review 660,000 630,000
Certifications for regulatory purposes 452,000 169,500
Tax advisory services 1,811,650 1,030,250
Others 37.3.1 659,500 347,500
9,057,750 7,122,250
Rizwan & Co. Auditors’s of FPML

Statutory audit 500,000 500,000
515,000 515,000
Less: Classified under discontinued opeartions 43.1.1 (515,000) (515,000)
9,057,750 7,122,250

37.3.1 It represents audit fee charged for Employees’ Provident Fund, Workers’ Profit Participation Fund’s and
staff gratuity fund audit.

Note 2022 2021
Rupees Rupees
38. SELLING EXPENSES
Salaries, wages and other benefits 38.1 61,207,561 44,733,597
Other selling expenses 2,186,983 100,305,152
63,394,544 145,038,749

38.1 Salaries, wages and other benefits include Rs. 0.96 million (2021: Rs. 0.77 million) in respect of
224
Note 2022 2021
Rupees Rupees
39. OTHER INCOME
Income from financial assets
Delayed payment markup - CPPA-G 30.2 194,535,051 593,538,079
Mark-up on advances to JK Sugar Mills (Pvt.) Ltd. 31.1 40,394,839 48,293,267
Income from sub-lease 31.7.2 50,770,691 –
Gain on acknowledged receipts – 4,214,996
Interest income on bank deposits 32.1 9,366,762 538,526
297,772,462 652,108,539
Income from non-financial assets
Fair value gain on initial recognition of
agricultural produce 36.1.1 873,173,812 901,813,978
Net fair value gain on biological assets 39.1 456,389,080 368,872,933
Sale of scrap 8,478,442 91,132,299
Gain on disposal of operating fixed assets 102,645,785 36,451,248
Insurance claim against loss of bagasse,
crane and buildings 24,541,000 5,000,000
Gain on derecognition of the right of-use assets 76,438,844 53,298,299
Liabilities no longer payable written back 16,347,569 54,480,324
Reversal of Workers’ Welfare Fund 15.4 29,572,047 –
Penalty for not honoring of contract 8,731,791 27,108,000
Mark-up on advances to growers 31.3.1 28,179,900 9,294,864
Rental income from investment property 12,280,212 11,250,495
Others 6,222,501 7,326,798
1,643,000,983 1,566,029,238
1,940,773,445 2,218,137,777
Note 2022 2021

Rupees Rupees
39.1 Net fair value gain on biological assets
Fair value of standing crops 27 2,855,032,666 2,335,200,206
Cost incurred on standing crops 27 & 39.1.1 (2,398,643,586) (1,966,327,273)
456,389,080 368,872,933

39.1.1 Cost incurred on standing crops
Salaries, wages and other benefits 39.1.1.1 276,969,921 228,207,229
Fuel expenses 89,689,674 73,768,845
Insurance 3,279,720 3,217,403
Others 22,941,821 7,891,118
27 2,398,643,586 1,966,327,273
JDW GROUP 225

39.1.1.1 Salaries, wages and other benefits include Rs. 7.58 million (2021: Rs. 6.48 million) in respect of
Note 2022 2021

Rupees Rupees
40. OTHER EXPENSES
Fixed energy receivables written off 30.2.1 & 45 – 3,325,977,231
Charge for delayed payment of sugarcane 40.1 – 105,032,575
Trade receivables written off – 1,969,757
Others 751,275 2,625,216
410,247,961 3,726,228,216

40.1 It represents late payment charges made to sugarcane growers for financial year 2019 to 2021 in
accordance with the Punjab Sugar Factories Control Rules, 1950.
Note 2022 2021

Rupees Rupees
41. FINANCE COST
Mark-up based loans from conventional banks /
financial institutions
- Long term finances - secured 1,438,779,324 550,267,008
- Short term borrowings - secured 1,483,700,848 1,197,322,622
- Interest expense for leasing arrangements 9 261,513,480 178,103,402
3,183,993,652 1,925,693,032
Islamic mode of financing
937,514,704 532,488,261

Markup on short term advance from provident fund 3,425,096 1,927,704
Markup based borrowing from financial institution – 128,478
Bank charges and commission 58,785,337 98,638,417
142,860,777 116,227,968
Less: Amortization of deferred Government grant 12 (25,862,000) (52,263,447)
4,238,507,133 2,522,145,814

226
Note 2022 2021
Rupees Rupees
42. TAXATION
Income tax 799,075,471 995,998,133
Super tax 10.2 104,354,081 –
Change in estimate related to prior year (209,199,357) (97,616)
Other adjustments 42.1 – 77,653,331
694,230,195 1,073,553,848
Deferred tax 10.3 265,362,477 (934,442,658)
Agriculture tax 3,012,782 2,813,774
962,605,454 141,924,964

42.1 It includes adjustments related to tax credit u/s 65B of the Income Tax Ordinance, 2001 for an amount
of Rs. Nil (2021: Rs. 34.12 million and Rs. 35.1 million for tax year 2015 and 2016) which was disallowed
by the Additional Commissioner Inland Revenue and CIR (A) respectively. The Holding Company has
filed an appeal which is pending before ATIR.
42.2 Relationship between tax expense and accounting profit before tax
The provision for taxation related to current and preceding financial year mainly represents the Minimum
Tax and final tax liabilities under section 113 and 169 of the Income Tax Ordinance, 2001 respectively.
Accordingly, tax charge reconciliation for current and preceding financial year has not been prepared
and presented.
42.3 For tax contingencies, refer to note 19.1.1 to 19.1.21
Note 2022 2021

Rupees Rupees
43. LOSS FROM DISCONTINUED OPERATIONS – NET OF TAX
43.1 Results of discontinued operations
Revenue 4,812,933 3,490,699
Expense 43.1.1 (8,224,199) (13,977,740)
Results from operating activities (3,411,266) (10,487,041)
Taxation 43.1.2 – –
Results from operating activities, net of tax (3,411,266) (10,487,041)

43.1.1 It includes statuary audit fee including out of pocket expense of Rs. 0.515 million (2021: Rs. 0.515
million).

43.1.2 Due to accounting loss for the year and tax losses available for carry forward, no tax provision has
been made for the purpose of current tax. Moreover, the FPML has not recognised deferred tax asset
including deferred tax asset on minimum tax on prudence principle as the FPML does not expect to
utilise this asset before it lapses.
JDW GROUP 227

2022 2021
Rupees Rupees
43.2 Allocation of loss between owners
of the Holding Company and NCI
Loss from discontinued operations (3,411,266) (10,487,041)

- Owners of the Holding Company (2,009,236) (6,176,867)
- Non - controlling interest (1,402,030) (4,310,174)
(3,411,266) (10,487,041)
43.3 Cash flows from discontinued operations

Cash and cash equivalents at beginning of the year 53,488,517 56,283,806
Net cash used in operating activates (4,225,825) (2,801,289)
Net cash generated from investing activities – 6,000
Net cash flows for the year (4,225,825) (2,795,289)
Cash and cash equivalents at end of the year 49,262,692 53,488,517
2022 2021
Tons Tons
43.4 Capacity and production - Air dry metric tons
Capacity 47,600 47,600
Actual production – –

43.4.1 The FPML has not commenced its commercial operations yet.

44. EARNINGS PER SHARE - BASIC AND DILUTED
Profit from continuing operations Rupees 4,322,834,677 4,618,820,033
Basic earnings per share Rupees 72.32 77.27
Loss from discontinued operations Rupees (2,009,236) (6,176,867)

Basic loss per share Rupees (0.03) (0.10)

44.1 A diluted earnings per share has not been presented as the Holding Company does not have any
convertible instruments in issue as at 30 September 2022 and 2021 which would have any effect on the
loss per share if the option to convert is exercised.
228
Note 2022 2021
Rupees Rupees
45. CASH GENERATED FROM OPERATIONS
Adjustments for non-cash income and expenses:
Finance cost 4,230,263,584 2,513,822,163
Depreciation and impairment of operating fixed assets 2,067,344,795 1,888,883,834
Staff retirement benefits 321,829,377 175,352,377
Depreciation of right-of-use assets 150,567,054 107,379,358
Assets written off 20.1.11 121,347,669 363,112,279
Provision for obsolescence 36.1 67,896,799 194,747,416
Amortization of intangibles 23.2 2,045,510 2,048,357
Fixed energy receivables written off 40 – 3,325,977,231
Net fair value gain on biological assets 39.1 (456,389,080) (368,872,933)
Interest income (275,181,671) (661,005,536)
Reversal of provision for obsolescence (159,054,896) (23,391,593)
Gain on disposal of operating fixed assets (102,645,785) (36,451,248)
Gain on derecognition of the right-of-use assets 39 (76,438,844) (53,298,299)
Reversal of Workers’ Welfare Fund (29,572,047) –
Liabilities no longer payable written back (16,347,569) (43,297,402)
6,263,405,131 7,689,414,959
11,548,845,262 12,450,159,956
Working capital changes:
Trade receivables 134,652,589 1,335,852,746
Stores, spare parts and loose tools (477,109,368) (41,629,503)
Biological assets (573,571,521) (674,549)
Advances, deposits, prepayments and other receivables 135,887,944 48,867,979
Stock-in-trade (14,423,643,406) 1,213,796,408
Lease receivables 69,633,908 43,288,451
Trade and other payables 1,104,705,373 (473,043,261)
Advances from customers 1,899,606,234 (3,106,367,521)
(12,129,838,247) (979,909,250)
Cash (used in) / generated from operations (580,992,985) 11,470,250,706

JDW GROUP 229

46. BUSINESS SEGMENT INFORMATION

46.1 The Group has four reportable segments, as described below, which are the Group’s strategic divisions.
The strategic divisions offer different products and services, and are managed separately because they
require different technology and marketing strategies. Information reported to the Group’s chief operating
decision maker for the purpose of resource allocation and assessment of segment performance is
focused on type of goods supplied. In addition to actual expenses incurred in operating segments,
un-allocated expenses have been allocated to operating segments on net sales proportionate basis.
The following summary describes the operations in each of the Group’s reportable segments that is
submitted to chief operating decision maker:
Reportable Segment Operations

Sugar Production and sale of crystalline sugar and other related joint and
by-products.

Co-Generation Power Generation and sale of energy to CPPA-G

Corporate Farms Managing corporate farms for cultivation of sugarcane and the small
quantity of other crops.

Others Project under construction for manufacture / generation and sale of
wood pulp and energy. However, operation of paper pulp classified
as disposal group (for detail, refer to note 33).
230
46.2 Information regarding the Group’s reportable segments from continuing operations are presented below:

Sugar Co-Generation segment Corporate Farms segment Others Inter segment reconciliation Total
2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021
Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees
46.2.1 Segment revenues & results
Net external revenues 65,348,427,737 61,497,288,315 3,641,150,936 3,631,419,740 99,466,147 127,047,728 - - - - 69,089,044,820 65,255,755,783
Inter-segment revenues 2,247,170,747 2,336,818,247 1,309,741,314 1,203,566,631 4,473,168,564 3,499,796,528 - - (8,030,080,625) (7,040,181,406) - -
Reportable segment revenue 67,595,598,484 63,834,106,562 4,950,892,250 4,834,986,371 4,572,634,711 3,626,844,256 - - (8,030,080,625) (7,040,181,406) 69,089,044,820 65,255,755,783
Depreciation 1,085,706,158 1,113,734,362 227,688,663 241,004,034 1,034,138,310 641,524,796 - - - - 2,347,533,131 1,996,263,192
Interest income 77,941,501 48,831,793 194,535,051 597,753,075 2,705,119 5,523,671 - - - - 275,181,671 652,108,539
Finance cost 3,867,380,008 2,275,158,923 113,893,423 78,936,381 257,233,102 167,970,406 600 80,102 - - 4,238,507,133 2,522,145,812
Segment profit / (loss) before tax 2,610,055,365 5,257,433,160 1,624,111,260 (1,295,041,286) 1,059,495,656 799,164,894 (8,222,150) (811,771) - - 5,285,440,131 4,760,744,997

46.2.2 Inter-segment sales and purchases
Inter-segment sales and purchases have been eliminated from total figures.
46.2.3 Basis of inter-segment pricing
Inter-segment pricing is determined on an arm’s length basis.
46.2.4 Segment assets & liabilities of continuing operations

Sugar Co-Generation segment Corporate Farms segment Others Total
2022 2021 2022 2021 2022 2021 2022 2021 2022 2021
Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees
Total assets for reportable segment 41,421,865,239 26,651,090,129 6,451,554,109 7,529,223,633 7,343,242,158 5,934,479,447 1,011,612 9,225,243 55,217,673,118 40,124,018,452
Total liabilities for reportable segment 34,272,185,845 22,851,369,934 333,689,617 76,180,736 2,350,885,452 1,765,351,854 87,112 78,592 36,956,848,026 24,692,981,116
Capital expenditure 243,614,336 188,536,248 11,320,066 863,132 817,683,585 533,985,875 - - 1,072,617,987 723,385,255
JDW GROUP
231
2022 2021
Rupees Rupees
46.3 Reconciliation of reportable segment profit or loss
Total profit before tax for reportable segments 5,285,440,131 4,760,744,997
Un-allocated corporate expenses (962,605,454) (141,924,964)
Consolidated profit after tax from continuing operations 4,322,834,677 4,618,820,033

46.4 Geographical information
The segments of the Group are managed on nationwide basis except export sale. Geographical
information relating to segment is presented below:
2022 2021
Rupees Rupees
46.4.1 Revenue

Local revenue
Domestic (Pakistan) 69,089,044,820 65,255,755,783

46.4.2 Non-current assets
All non-current assets of the Group as at 30 September 2022 are located in Pakistan.

46.4.3 Un-allocated liabilities
Un-allocated liabilities include deferred liabilities and unclaimed dividend.

46.4.4 Un-allocated assets
Un-allocated assets include cash and bank balances.

46.5 Revenue from major customer
The Group’s revenue is earned from a large mix of customers.

232
47. REMUNERATION OF CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVES
The aggregate amount charged in these consolidated financial statements for remuneration, including all benefits
to the Chief Executive, Directors and Executives of the Group are as follows:
Directors
Chief Executive Executive Non - Executive Executives
2022 2021 2022 2021 2022 2021 2022 2021
Rupees Rupees Rupees Rupees Rupees Rupees Rupees Rupees
Managerial remuneration 5,000,000 48,500,000 400,000,000 355,200,000 125,600,000 117,333,333 619,115,317 525,538,204
House allowance 2,000,000 19,400,000 160,000,000 142,080,000 50,240,000 46,933,333 247,646,127 210,215,282
Medical and other allowances 500,000 4,850,000 40,000,000 35,520,000 12,560,000 11,733,333 61,911,532 52,553,821
Bonus - - 250,000,004 200,000,004 78,000,000 62,399,998 673,195,454 643,972,061
Group’s contribution towards provident fund - - - - - - 57,803,687 49,373,877
Staff retirement benefit - gratuity - - - - - - 5,572,040 4,250,304
7,500,000 72,750,000 850,000,004 732,800,004 266,400,000 238,399,997 1,665,244,157 1,485,903,549
Number of persons 1 1 1 1 2 2 123 120

47.1 In addition to the above, Chief Executive, one Director (2021: two directors) and some of the Executives
are provided with free use of Group maintained cars and certain other benefits.

47.2 No meeting fee was paid to any Director of the Group during the current and preceding year.

47.3 Mr. Jahangir Khan Tareen, an Executive Director, and its family owned business concerns are permitted
to use the Holding Company maintained aircraft for private trips, subject to availability, for which the
proportionate share of operating expenses is reimbursed to the Holding Company. During the year, Rs.
44.527 million (2021: Rs. 61.715 million) was charged for the use of aircraft.
48. FINANCIAL INSTRUMENTS

The Group has exposure to the following risks from its use of financial instruments:

- Credit risk
- Liquidity risk
- Market risk (including currency risk, interest rate risk and other price risk)

48.1 Risk management framework
The Board of Directors has overall responsibility for establishment and oversight of the Group’s risk
management framework. The executive management team is responsible for developing and monitoring
the Group’s risk management policies. The team regularly meets for any changes and compliance
issues are reported to the Board of Directors through the audit committee.

Risk management systems are reviewed regularly by the executive management team to reflect changes
in market conditions and the Group’s activities. The Group, through its training and management
standards and procedures, aims to develop a disciplined and constructive control environment in which
all employees understand their roles and obligations.

The audit committee oversees compliance by management with the Group’s risk management policies
and procedures, and reviews the adequacy of the risk management framework in relation to the risks
faced by the Group.
JDW GROUP 233

48.1.1 Credit risk
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or
customer contract, leading to a financial loss. The Group is exposed to credit risk from its operating
activities (primarily trade receivables) and from its financing activities, including deposits with banks and
financial institutions, foreign exchange transactions and other financial instruments. To manage credit
risk, the Group maintains procedures covering the application for credit approvals, granting and renewal
of counterparty limits and monitoring of exposures against these limits. As part of these processes, the
financial viability of all counterparties are regularly monitored and assessed.

Exposure to credit risk
The carrying amount of financial assets represents the maximum credit exposure. The maximum
exposure to credit risk at consolidated statement of financial position date is:
2022 2021
Rupees Rupees
Financial assets at amortized cost
Long term deposits 15,320,428 13,896,958
Lease receivable – 69,633,908
Trade receivables 2,666,350,750 3,564,415,039
Advances, deposits and other receivables 124,912,665 683,600,675
Bank balances 436,099,176 277,832,558
3,242,683,019 4,609,379,138

Concentration of credit risk
Concentrations arise when a number of counterparties are engaged in similar business activities, or
activities in the same geographical region, or have economic features that would cause their ability
to meet contractual obligations to be similarly affected by changes in economic, political or other
conditions. Concentrations indicate the relative sensitivity of the Group’s performance to developments
affecting a particular industry. In order to avoid excessive concentrations of risk, management focuses
on the maintenance of a diversified portfolio. Identified concentrations of credit risks are controlled and
managed accordingly. However, the Group identifies concentration of credit risk by reference to type of
counterparty. Maximum exposure to credit risk by type of counterparty is as follows:
2022 2021
Rupees Rupees
Customers:
- Sugar segment 387,099,815 379,208,859
- Co-Generation Power segment 2,279,250,935 3,185,206,180
Banking companies 436,099,176 277,832,558
Others 140,233,093 767,131,541
3,242,683,019 4,609,379,138

Credit quality and impairment
The credit quality of financial assets that are neither past due nor impaired can be assessed by reference
to external credit ratings or to historical information about counterparty.

234
Trade receivables - considered good
Majority of the Group’s revenue are on advance basis and trade receivables mainly represents
receivable from Central Power Purchasing Agency (Guarantee) Limited, a Government owned entity and
are secured by guarantee from GoP under the Implementation Agreements. Hence, the management
believes that no further impairment allowance is necessary in respect of these receivables (for details,
The Group recognized ECL for trade receivables using the simplified approach as explained in note
4.20.6. As per aforementioned approach, the loss allowance was determined as:

2022 2021
Gross carrying Accumulated Gross carrying Accumulated
amount impairment amount impairment
Not past due 1,290,671,289 – 976,065,163 –
Past due:
1 - 90 days 1,118,556,132 – 1,655,854,335 –
91 - 365 days 257,123,329 – 864,575,540 –
366 - above days 100,391,459 100,391,459 51,672,219 51,672,219
2,766,742,209 100,391,459 3,548,167,257 51,672,219

Customer credit risk is managed subject to the Group’s established policy, procedures and controls
relating to customer credit risk management. Based on past experience, the management believes that
no further impairment allowance is necessary in respect of trade receivables as some receivables have
been recovered subsequent to the year end and for other receivables there are reasonable grounds
to believe that the amounts will be recovered in short course of time. Management believes that the
unimpaired balances that are past due are still collectible in full, based on historical payment behavior
and review of financial strength of respective customers. 61% of unimpaired balances that are past
due has been recovered from CPPA-G subsequent to year end. Therefore, the Group has no material
expected credit loss under IFRS 9 ‘Financial Instruments’ at the year end.
The above gross carrying amount includes Rs. 2,328 million (2021: Rs. 3,185 million) amount receivable
from Central Power Purchasing Agency (Guarantee) Limited against sale of energy.

Bank balances
Impairment on bank balances has been measured on a 12 months expected credit loss basis and
reflects the short maturities of the exposures. The Group considers that its bank balances have low
credit risk based on the external credit ratings of the counterparties. The credit quality of the Group’s
bank balances can be assessed with reference to external credit rating agencies as follows:
JDW GROUP 235

Rating Rating 2022 2021
Long term Short term Agency Rupees Rupees
Banks
Conventional
The Bank of Punjab AA+ A1+ PACRA 126,238,655 143,415,219
MCB Bank Limited AAA A1+ PACRA 105,185,162 73,281,910
Habib Bank Limited AAA A1+ JCR-VIS 59,389,953 10,183,602
NRSP Microfinance Bank A-1 A & A- PACRA 27,125,054 –
United Bank Limited AAA A1+ JCR-VIS 8,006,410 2,770,575
Allied Bank Limited AAA A1+ PACRA 6,654,249 71,678
National Bank of Pakistan AAA A1+ PACRA 6,632,642 30,374,390
Soneri Bank Limited AA- A1+ PACRA 3,993,000 796,276
Faysal Bank Limited AA A1+ PACRA 3,305,246 170,837
Habib Metropolitan Bank Limited AA+ A1+ PACRA 872,448 1,360,588
The Bank of Khyber A A1 PACRA 16,047 115,031
Summit Bank Limited BBB- A-3 JCR-VIS 78,468 42,811
Sindh Bank Limited A+ A1 JCR-VIS 85,419 559,788
The First Microfinance Bank Limited A+ A1 JCR-VIS 47,892 10,000
Bank Al Habib Limited AAA A1+ PACRA 30,354 9,842
JS Bank Limited AA- A1+ PACRA 58,061 49,400
Silk Bank Limited A- A2 JCR-VIS 20,448 20,448
360,664,514 263,338,439
Islamic
Meezan Bank Limited AAA A1+ JCR-VIS 47,456,109 11,531,210
National Bank of Pakistan AAA A1+ PACRA 15,907,860 183,054
Dubai Islamic Bank (Pakistan) Limited AA A1+ JCR-VIS 1,227,687 8,337
Albaraka Bank (Pakistan) Limited A A1 PACRA 928,669 159,588
Bank Islamic (Pakistan) Limited A-1 A+ PACRA 164,145 1,091,812
MCB Islamic Bank Limited A A1 PACRA 425,889 716,275
Al Baraka Bank (Pakistan) Limited
(Formally Burj Bank Limited) A+ A1 PACRA 20,016 20,016
Faysal Bank Limited AA A1+ PACRA 8,433 8,433
75,434,662 14,494,119
436,099,176 277,832,558

Due to the Group’s long standing business relationships with these counterparties and after giving due
consideration to their strong financial standing, management does not expect non performance by
these counterparties on their obligations to the Group. Accordingly, the credit risk is minimal.

Advances, deposits and other receivables
Advances, deposits and other receivables mainly comprise of advances to employees against salaries,
receivables from related parties and deposits with government entities and financial institution.
The Group has assessed, based on historical experience, available securities against advances to
employees and amounts are paid to counterparty as per agreement, that the expected credit loss
associated with these financial assets is trivial and therefore no impairment allowance is necessary.
236
48.1.2 Liquidity risk
Liquidity risk represents the risk that the Group will encounter difficulties in meeting obligations
associated with financial liabilities. The Group’s approach to manage liquidity is to ensure, as far as
possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and
stressed conditions. For this purpose, the Group has sufficient running finance facilities available from
various commercial and Islamic banks to meet its liquidity requirements. Further, liquidity position of the
Group is closely monitored through budgets, cash flow projections and comparison with actual results
by the Board of Directors. The table below analyses the Group’s financial liabilities into relevant maturity
groupings based on the remaining period at the statement of financial position date to contractual
maturity dates. The amounts disclosed in the table are the contractual undiscounted cash flows:

2022
Rupees
Long term finances - secured 11,295,439,200 14,644,161,771 5,060,834,110 9,583,327,661 –
Accrued profit / interest / mark-up 1,043,339,635 1,043,339,635 1,043,339,635 – –
31,811,085,289 38,505,141,584 27,050,749,882 11,454,391,702 –

2021
Rupees
Long term finances - secured 14,842,659,788 17,834,744,985 5,306,796,040 11,746,388,945 781,560,000
22,365,084,653 26,973,404,251 13,075,797,481 13,116,046,770 781,560,000

48.1.3 Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and
equity prices will affect the Group’s income or the value of its holdings of financial instruments. The
objective of market risk management is to manage and control market risk exposures within acceptable
parameters, while optimizing the return.

i) Foreign currency risk
Foreign currency risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate
because of changes in foreign exchange rates. This exists due to the Group’s exposure resulting from
outstanding import payments, foreign commercial transactions and related interest payments if any.

Financial assets of the Group include Rs. nil (2021: 7.72 million) and financial liabilities of the Group
include Rs. 16.21 million (2021: Rs. 8.82 million) in foreign currencies which are subject to currency risk
exposure. The Group believes that the foreign exchange risk exposure on financial assets and liabilities
is immaterial.
JDW GROUP 237

Foreign currency risk management
The Group manages foreign currency risk through due monitoring of the exchange rates, adjusting net
exposure and obtaining forward covers where necessary.

ii) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market interest rates. The Group’s exposure to the risk of changes in market
interest rates relates primarily to the Group’s long-term and short-term financing arrangements at
floating interest rates to meet its business operations and working capital requirements. The effective
interest / mark-up rates for interest / mark-up bearing financial instruments are mentioned in relevant
notes to these consolidated financial statements. The interest rate profile of the Group’s interest‑bearing
financial instruments as reported to the management of the Group is as follows:
2022 2021
Financial Financial Financial Financial
asset liability asset liability
Non-derivative financial
instruments Note Rupees Rupees Rupees Rupees
Fixed rate instruments:
Long term financing -
SBP Refinance Scheme 8.1.1 – – – 560,129,192
Lease liabilities – 2,193,926,897 – 1,678,591,100
– 2,193,926,897 – 2,238,720,292
Variable rate instruments:
Long term finances - secured 8 – 11,295,439,200 – 14,282,530,596
Lease liabilities – 428,971,486 – 425,517,993
Short term advances – – 600,000,000 –
Lease receivables 26 – – 69,633,908 –
Short term borrowings 13 – 14,830,264,117 – 3,433,591,564
Cash at bank 32.1 28,996,915 – 1,952,027 –
28,996,915 26,554,674,803 671,585,935 18,141,640,153
28,996,915 28,748,601,700 671,585,935 20,380,360,445

Fair value sensitivity analysis for fixed-rate instruments
The Group does not account for any fixed rate financial assets and liabilities at fair value through profit
or loss. Therefore a change in interest rates at the reporting date would not affect this consolidated

Cash flow sensitivity analysis for variable rate instruments
A change of 100 basis points in interest rates at the reporting date would have increased / (decreased)
profit for the year by the amounts shown below. This analysis assumes that all other variables remain
constant. The analysis is performed on the same basis for 2021.
Profit or loss (100 bps)

2022 2021
Increase Decrease Increase Decrease
Rupees
(265,256,779) 265,256,779 (174,700,542) 174,700,542

The sensitivity analysis prepared is not necessarily indicative of the effects on profit for the year and
assets / liabilities of the Group.
238
Interest rate risk management
The Group manages these mismatches through risk management strategies where significant changes
in gap position can be adjusted. The long and short term financing / borrowing and obligation under
finance lease has variable rate pricing that is mostly dependent on Karachi Inter Bank Offered Rate
(“KIBOR”) as indicated in respective notes.

iii) Other price risk
Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market prices (other than those arising from currency risk or interest rate risk),
whether those changes are caused by factors specific to the individual financial instrument or its issuer,
or factors affecting all similar financial instruments traded in the market. The Group is not exposed to
other price risk.

48.2 Fair value measurements of financial instruments
Fair value estimation
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. Underlying the definition of fair value
is the presumption that the Group is a going concern without any intention or requirement to curtail
materially the scale of its operations or to undertake a transaction on adverse terms. The carrying
amounts of all the financial instruments reflected in these consolidated financial statements approximate
their fair value. Investments in associates are carried at under equity method of accounting.

Fair value measurement
The fair value measurement is based on the presumption that the transaction to sell the asset or transfer
the liability takes place either:

– In the principal market for the asset or liability; or
– In the absence of a principal market, in the most advantageous market for the asset or
liability.
The principal or the most advantageous market must be accessible by the Group.

The fair value of an asset or a liability is measure using the assumptions that market participants would
use when pricing the asset or liability, assuming that market participants at in their economic best
interest.

A fair value measurement of a non-financial asset takes into account a market participants ability to
generate economic benefit by using the asset in its highest and best use or by selling it to another
market participant that would use the asset in its highest and best use.

Fair value hierarchy
IFRS 13, ‘Fair Value Measurements’ requires the Group to classify fair value measurements using a fair
value hierarchy that reflects the significance of the inputs used in making the measurements. The fair
value hierarchy has the following levels:

– Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can
access at the measurement date (level 1).
– Inputs other than quoted prices included within Level 1 that are observable for the asset or
liability, either directly or indirectly (level 2).
– Unobservable inputs for the asset or liability (level 3).
JDW GROUP 239

The Group recognizes transfers between levels of the fair value hierarchy at the end of the reporting
period during which the transfers occur. However, there were no transfers amongst levels during the
year.
For details of the valuation techniques and significant unobservable inputs related to determining the
fair value of biological assets, which are classified in level 3 of the fair value hierarchy, refer to note 27.

49. CAPITAL MANAGEMENT
The Board of Directors’ policy is to maintain an efficient capital base so as to maintain investor, creditor and
market confidence and to sustain the future development of its business. The Board of Directors monitors the
return on capital employed, which the Group defines as profit before operation divided by total capital employed.
The Board of Directors also monitors the level of dividends to ordinary shareholders.

The Group’s objectives when managing capital are:

a) to safeguard the entity’s ability to continue as a going concern, so that it can continue to provide returns for
shareholders and benefits for other stakeholders; and

b) to provide an adequate return to shareholders.

The Group manages the capital structure in the context of economic conditions and the risk characteristics of
the underlying assets. In order to maintain or adjust the capital structure, the Group may, for example, adjust the
amount of dividends paid to shareholders, issue new shares, or sell assets to reduce debt.

The Group’s strategy is to ensure compliance with the Prudential Regulations issued by the State Bank of Pakistan
and is in accordance with agreements executed with financial institutions so that the total borrowings to equity
ratio does not exceed the lender covenants. The Group is required to comply with certain financial covenants
in respect of capital requirements. However, the Subsidiary Company - DSML is in compliance with all financial
covenants under term of financing from BOP Syndicate as refer to note 8.1.1 except debt service coverage ratio.
Pursuant of such breach of covenant, the DSML has not classified its non-current liabilities of respective lender
into current liabilities. The total borrowings to equity ratio as at 30 September 2022 and 2021 are as follows:
2022 2021
Rupees Rupees
Total debt 27,598,842,446 19,036,336,233
Less: Cash and bank balances (440,945,386) (283,941,075)
Net debt 27,157,897,060 18,752,395,158
Total equity 18,797,764,152 15,969,985,632
Total capital employed 45,955,661,212 34,722,380,790

Gearing ratio 59% 54%

Total debt comprises of long term financing from banking companies / financial institutions, lease obligation
towards banks only, short term borrowings and accrued mark-up.
Total equity includes issued, subscribed and paid-up share capital, share premium reserve and accumulated
profits.
240
50. TRANSACTIONS WITH RELATED PARTIES
Related parties comprise of subsidiary companies, associated companies, other related companies, entities
under common directorship, key management personnel and post employment benefit plans. Amounts due from
and due to related parties are shown under respective notes to these consolidated financial statements. Other
significant transactions with related parties except those disclosed elsewhere are as follows:
2022 2021
Name of company Relationship Nature of transactions Rupees Rupees
JDW Aviation Associated Company Reimbursement of expenses 4,557,417 4,323,538
(Pvt.) Limited (Common directorship) Refund of long term
security deposit – 2,990,360

Lahore Flying Club Associated Company Services rendered against
(Guarantee) Limited (Related party) aircraft hangar 767,191 1,764,087

Post employment Other related party Provident fund contribution 315,874,650 274,576,884
benefit plans Payment to recognised
gratuity fund 58,781,330 104,674,839
Short term advances received 250,000,000 250,000,000
Short term advances paid 250,000,000 250,000,000
Mark-up paid on short
term advances 3,425,096 1,505,818

Key management Key management Dividend paid 136,734,650 –
personnel Reimbursement of expenses 5,415,829 5,342,790
Consultancy services – 10,670,281

50.1 Detail of compensation to Chief Executive, Executive Directors, Non-Executive Directors and Executives
is disclosed in note 47.

50.2 There is no outstanding balance as at 30 September 2022 (2021: Nil) in respect of above transactions
except as disclosed in respective notes to these consolidated financial statements.

50.3 All transactions with related parties are entered into at agreed terms/contractual arrangement duly
approved by the Board of Directors of the Group.
JDW GROUP 241

2022 2021
Tons Tons
51. CAPACITY AND PRODUCTION
Sugar
Holding Company:

Unit I

Unit II

Unit III

Subsidiary Company - DSML:

51.1 For details of crushing capacity, refer to note 19.1.22.

2022 2021
MWh MWh
Co - Generation Power:
Unit II

Unit III

51.2 Energy delivered to CPPA-G is dependent on the plant availability.

2022 2021
Corporate Farms Zones Acres/Maunds Zones Acres/Maunds
Sugarcane crop
Land (Acres) Punjab & Sindh 24,970 Punjab & Sindh 25,835
Land under cultivation (Acres) Punjab & Sindh 19,712 Punjab & Sindh 20,539
Crop harvested (Maunds) Punjab & Sindh 19,045,523 Punjab & Sindh 17,079,808

51.3 The Holding Company also have harvested 33,939 Maunds of wheat (2021: 39,733), 446 Maunds of
Rhode grass (2021: 31,354 Maunds) and 3,828 Maunds of Mustered (2021: 4,775 Maunds) and Nil
Maunds of Rice (2021: 826) during the year.

242
52. CHANGE IN LIABILITIES ARISING FROM FINANCING ACTIVITIES
2022
Equity Liabilities
secured mark-up
Rupees

Changes from financing cash flows:
Dividend paid (1,494,416,526) (420,889) – – – –
(1,494,416,526) (420,889) (3,581,326,137) (960,656,556) 10,444,813,652 (3,234,379,113)
Other changes - liability related:
Increase in short term finances – – – – 951,858,901 –
Impact of IAS 20 – – 25,862,000 – – –
Amortization of transaction cost – – 8,243,549 – – (8,243,549)
Others – 7,312,991 – (120,430,138) – –
Total liability-related other changes 4,322,195,046 7,312,991 34,105,549 1,479,445,846 951,858,901 3,968,750,104

Balance as at 30 September 2022 17,521,680,614 40,640,932 11,295,439,200 2,622,898,383 14,830,264,117 1,043,339,635
JDW GROUP
243
244
2021
Equity Liabilities
secured mark-up
Rupees

FINANCIAL

Changes from financing cash flows
Dividend paid – (194,188) – – – –
– (194,188) (1,931,586,596) (889,296,947) (2,082,957,755) (2,723,191,360)

Other changes - liability related
STATEMENTS

Decrease in short term finances – – – – (2,163,692,529) –
Impact of IAS 20 – – 41,886,177 – – –
Amortization of transaction cost – – – – – –
Others – – – (51,064,767) – –
Total liability-related other changes 4,609,252,354 – 41,886,177 1,532,931,293 (2,163,692,529) 2,667,806,480

53. NUMBER OF EMPLOYEES
The average and total number of employees are as follows:

2022 2021
Number Number
Average number of employees during the year 9,301 9,209

Total number of employees as at 30 September 6,618 6,488

54. DATE OF AUTHORIZATION FOR ISSUE
These consolidated financial statements were authorized for issue on 05 January 2023 by the Board of Directors
of the Group.
55. SUBSEQUENT EVENTS

55.1 Subsequent to year ended 30 September 2022, the Holding Company, with the approval of the
Holding Company’s shareholders in extraordinary general meeting held on November 03, 2022 and in
compliance of Section 88 of the Companies Act, 2017 read in conjunction with the Listing Companies
(Buy Back of Shares) Regulations, 2019, accorded to buy back upto to a maximum of its 2,000,000
issued, subscribed and paid-up ordinary shares through the Pakistan Stock Exchange Limited at the
spot/current price prevailing during purchase period i.e., 11 November 2022 to 02 May 2023 or till such
date that the Buy-back of shares is completed, whichever is earlier. However, the Buy-back of shares
has been completed date 02 January 2023.
55.2 The Board of Directors in their meeting held on 05 January 2023 has proposed final cash dividend for
the year ended 30 September 2022 of Rs. 12.50 (2021: Rs. 10) per share amounting to Rs. 722.208
million (2021: Rs. 597.766 million) subject to the approval of the Holding Company in the forthcoming
annual general meeting. These financial statements do not include the effect of the above which will be
accounted for in the year in which it is approved.

56. CORRESPONDING FIGURES
Corresponding figures have been re-arranged and re-classified, wherever considered necessary, for the purposes
of comparison and better presentation to comply with the requirements of the accounting and reporting standards
as applicable in Pakistan, however, no significant re-arrangements and reclassification have been made during
the year.
JDW GROUP 245

06
SHAREHOLDERS’
INFORMATION
248 Notice of Annual General Meeting
252 Pattern of Shareholding
254 Categories of Shareholding
255 Form of Proxy

NOTICE OF 33rd ANNUAL
GENERAL MEETING
Notice is hereby given that the 33rd Annual General Meeting (the “AGM”)
of JDW Sugar Mills Limited (the “Company”) will be held at Summit Hall,
Royal Palm Golf & Country Club, 52-Canal Bank Road, Lahore on Saturday,
January 28, 2023 at 09:30 a.m., to transact the following business:
Ordinary Business:
1. To confirm the minutes of the last Extra-Ordinary General Meeting of the Company held on November 03, 2022.
2. To receive, consider and adopt the Audited Un-Consolidated and Consolidated Financial Statements of the Company
for the financial year ended on September 30, 2022 together with Chairman’s Review, Directors’ and Auditors’ Reports
thereon.
3. To approve payment of Final Cash Dividend @ Rs. 12.50 (125%) per share, as recommended by the Board of Directors
on January 05, 2023 in addition to interim cash dividends of Rs. 15.00 (150%) per share already disbursed, totaling to
Rs. 27.50 (275% ) per share for the financial year ended on September 30, 2022, i.e. Rs. 19.00 (190%) per share from
Sugar Division and Rs. 8.50 (85%) per share from Power Division.
4. To appoint Statutory Auditors of the Company for the next financial year ending on September 30, 2023 and to fix their
remuneration. The Board, based on the recommendation of the Audit Committee, has recommended the appointment
of retiring Auditors M/s Riaz Ahmad, Saqib, Gohar & Company, Chartered Accountants, who being eligible, have
offered themselves for re-appointment as Statutory Auditors of the Company.
5. To transact any other business with permission of the Chair.

By Order of the Board
January 06, 2023 (Maqsood Ahmad Malhi)

Lahore Company Secretary & Legal Head
248
Notes:
A. General B. For Attending the AGM and
i) All members are entitled to attend and vote at AGM. Identification
ii) The share transfer books of the Company will remain i) In case of individuals: Original Computerized
closed from Saturday, January 21, 2023 to Saturday, National Identity Card or Passport be shown for
January 28, 2023 (both days inclusive). Transfers Identification.
received in order at the Company’s Registered
Office or Corplink (Private) Limited, Wings Arcade, ii) In case of Corporate Entity: The Board Resolution/
1-K Commercial, Model Town, Lahore (the “Shares’ Power of Attorney with specimen signature of the
Registrar”) by the close of business on January 20, representative be shown for identification.
2023, will be treated in time and may be considered
for dividend entitlement, exercising voting rights etc. C. For Appointing the Proxies
iii) Members are requested to promptly submit to the Members entitled to attend and vote at the AGM may
Shares’ Registrar / Company / their Participant (if appoint a proxy/nominee in writing to attend the AGM
applicable): and vote on their behalf. Duly completed Proxy Form /
a) any change in their contact details/address; Authorization must be deposited with the Company at
its Registered office not later than 48 hours before the
b) IBAN under Section 242 of the Companies Act,
scheduled AGM time. Proxy Form / Authorization must
2017 (the “Act”) through Mandate Form available
be complete/valid and accompanied with following:
at www.jdw-group.com;
c) Valid Tax Exemption Certificate; and a) witnessed by two persons
d) Form CZ-50 (Non-deduction of Zakat). b) attested copies of CNIC or passport of Member
iv) Members, who by any reason, could not claim their and proxy
dividends/shares, if any, are advised to contact
Company’s Shares Registrar to collect/inquire about D. Replacement of Physical Shares into
their unclaimed dividends/shares. CDC Account
v) In terms of Section 132(2)/134(1)(b) of the Act and Members, who hold physical shares, are advised to
GoP/SECP guidelines issued from time to time, the convert their shares into CDC in terms of Section 72 of
Company has put in place necessary arrangements the Act.
for virtual participation of members in the AGM.
Interested members may contact at maqsoodmalhi@ E. Proportionate shareholding of Joint
jdw-group.com with their identification/comments Shareholders
atleast two (02) days before the AGM.
Proportionate shareholding of joint shareholders
shall be treated (50:50) unless they update their
proportionate of shareholding otherwise.
F. Placement of Financial Statements on

Website
The financial statements of the Company for the
financial year ended on September 30, 2022 will also
be available on Company’s website.

250
PATTERN OF SHAREHOLDING
The Companies Act, 2017 {Section 227(2)(f)}
1.1 Name of the Company JDW Sugar Mills Limited
2.1 Pattern of holding of the shares held by the shareholders as at 30-Sep-2022
Shareholding
2.2 No. of Shareholders From To Total Shares Held
363 1 100 10,241
397 101 500 124,171
87 501 1,000 67,555
257 1,001 5,000 408,159
15 5,001 10,000 98,279
10 10,001 15,000 128,404
4 15,001 20,000 76,006
1 20,001 25,000 24,581
5 25,001 30,000 142,228
1 30,001 35,000 30,250
2 35,001 40,000 75,014
2 50,001 55,000 109,311
2 60,001 65,000 126,927
1 75,001 80,000 78,270
2 105,001 110,000 212,473
2 110,001 115,000 229,551
2 115,001 120,000 236,757
1 190,001 195,000 192,548
1 195,001 200,000 200,000
1 205,001 210,000 208,167
1 275,001 280,000 278,270
1 345,001 350,000 348,494
1 365,001 370,000 367,327
1 595,001 600,000 597,423
1 650,001 655,000 651,864
1 775,001 780,000 775,378
1 1,030,001 1,035,000 1,032,000
1 1,115,001 1,120,000 1,115,636
1 1,425,001 1,430,000 1,430,000
1 2,120,001 2,125,000 2,123,648
1 2,140,001 2,145,000 2,143,648
1 2,215,001 2,220,000 2,216,145
1 2,955,001 2,960,000 2,957,342
1 4,435,001 4,440,000 4,437,381
1 9,265,001 9,270,000 9,269,012
1 9,705,001 9,710,000 9,706,988
1 17,545,001 17,550,000 17,547,213
1,173 59,776,661
252
2.3 Categories of shareholders Shares held Percentage
2.3.1 Directors, Chief Executive Officer,

and their spouse and minor children 28,588,575 47.8256%

2.3.2 Associated Companies,
undertakings and related parties. – 0.0000%

2.3.3 NIT and ICP 18,150 0.0304%

2.3.4 Banks, Development Financial Institutions,
Non Banking Financial Institutions 15,036 0.0252%

2.3.5 Insurance Companies – 0.0000%

2.3.6 Modarabas and Mutual Funds 6,100 0.0102%

2.3.7 Shareholders holding 10% or more 37,953,213 63.4917%

2.3.8 General Public
a. Local 26,498,733 44.3296%
b. Foreign – 0.0000%

2.3.9 Others (to be specified)
- Joint Stock Companies 1,597,909 2.6731%
- Investment Companies 2,085 0.0035%
- Foreign Companies 2,995,145 5.0106%
- Others 54,928 0.0919%

CATEGORIES OF SHAREHOLDING
As on September 30, 2022
Sr. No. Name No. of Shares Held Percentage
Associated Companies, Undertakings and Related Parties (Name Wise): – –
Mutual Funds (Name Wise Detail) – –
Directors, CEO and their Spouse and Minor Children (Name Wise):
1 Mr. Jahangir Khan Tareen 9,269,012 15.5061%

2 Makhdoom Syed Ahmad Mahmud 17,547,213 29.3546%
3 Mr. Ijaz Ahmed 2,429 0.0041%
4 Mr. Asim Nisar Bajwa 1,421 0.0024%
5 Mr. Raheal Masud 500 0.0008%
6 Mrs. Samira Mahmud 651,864 1.0905%
7 Mr. Zafar Iqbal 500 0.0008%
8 Mrs. Amina Tareen W/O Mr. Jahangir Khan Tareen 1,115,636 1.8663%

Executives: 5,469,386 9.1497%
Public Sector Companies & Corporations: – –
Banks, Development Finance Institutions, Non Banking Finance 21,136 0.0354%

Institutions, Insurance Companies and Modarabas:
Shareholders holding five percent or more voting interest in the listed company (Name Wise)
1 Mr. Jahangir Khan Tareen 9,269,012 15.5061%

2 Makhdoom Syed Ahmad Mahmud 17,547,213 29.3546%
3 Mr. Ali Khan Tareen 11,136,988 18.6310%
4 Rana Nasim Ahmed 4,437,381 7.4233%

All trades in the shares of the listed company, carried out by its Directors, CEO, CFO, Company Secretary and
their spouses and minor children:
Deletion Addition Purchase

Sr. No. Name through Gift through Gift / (Sale)
1 Mr. Jahangir Khan Tareen – – (283,281)
2 Makhdoom Syed Ahmad Mahmud – 770,000 283,281
3 Mrs. Amina Tareen W/O Mr. Jahangir Khan Tareen (770,000) – –
4 Mr. Muhammad Rafique – – 7,000

254
Proxy Form

33rd Annual General Meeting
Folio No./CDC A/c No.
I/We of
in the district of being a member/members of JDW Sugar Mills Limited
holding shares of Rs.10 each, hereby appoint Mr./Ms.
of failing him / her,
of as my/our proxy to vote for me/us and on my/our behalf at the 33rd Annual
General Meeting of the Company to be held on Saturday, January 28, 2023 at 9:30 a.m. at Summit Hall, Royal Palm
Golf & Country Club, 52-Canal Bank Road, Lahore and at any adjournment thereof or of any ballot to be taken in
consequence thereof.
Signed this day of January, 2023.
Affix Revenue
(Member’s Signature) stamp of Rs. 50/-
Witnesses:
Signature: 1. 2.
Name:
CNIC:
Address:
Note:
All Proxy Form, in order to be effective must be received at the Company’s registered office not later than forty eight
(48) hours before the time fixed for holding the Annual General Meeting and must be duly stamped, signed and
witnessed as required.
AFFIX
CORRECT
POSTAGE
The Company Secretary

Registered Office: 17– Abid Majeed Road,
Lahore Cantonment, Lahore Pakistan.
‫� �‬
‫�‬
‫‪33‬واں �� اں‬
‫�‬
‫‪9:30‬‬ ‫�‬ ‫‪2023‬‬ ‫‪28‬‬ ‫‪� 33‬‬

‫و�‬
‫�‬‫�‬
‫‪2023‬‬
‫�س‬
AFFIX
CORRECT
POSTAGE
The Company Secretary

Registered Office: 17– Abid Majeed Road,
Lahore Cantonment, Lahore Pakistan.
NOTES

NOTES
260
FARMERS’ FIRST
CHOICE

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OUR VISION IS

to Create Opportunities for the Future.

02 2022 Annual Report

48 Independent Auditors’ Review Report

145 Directors’ Report

JDW SUGAR MILLS LIMITED 03

Director / Chairman Member Mr. Asim Nisar Bajwa

Chief Executive Member

Mrs. Samira Mahmud

Company Secretary &

06 2022 Annual Report

JDW SUGAR MILLS LIMITED 07

08 2022 Annual Report

Innovating & Protecting our Acting with

JDW SUGAR MILLS LIMITED 09

Gross Revenue from

10 2022 Annual Report

12 2022 Annual Report

JDW SUGAR MILLS LIMITED 13

Recent tests revealed ratoon stunting RSD and White leaf

14 2022 Annual Report

JDW SUGAR MILLS LIMITED 15

16 2022 Annual Report

18 2022 Annual Report

• Ensure enough quality sugarcane in the catchment

JDW SUGAR MILLS LIMITED 19

Gross Earnings per

Profit after Cash

22 2022 Annual Report

Shareholders’ Growers’ Payment

JDW SUGAR MILLS LIMITED 23

Gross revenue 67,027,986 64,908,275 60,754,018 54,724,042 40,251,476 49,962,325

Gross Revenue Operations Profit

Profit / (loss) for the Year Earnings / (Loss) Per Share

24 2022 Annual Report

Sugar production M.Tons 336,630 255,396 260,845 287,394 409,507 357,733

Sugar recovery % age 10.16 10.06 10.58 11.61 10.91 10.14

Molasses production M.Tons 156,887 112,167 102,835 96,101 175,655 154,437

Molasses recovery % age 4.74 4.42 4.17 3.88 4.68 4.38

Sugar production M.Tons 235,506 159,800 153,173 190,304 255,879 247,926

Sugar recovery % age 9.78 9.85 10.23 11.40 10.54 10.45

Molasses production M.Tons 124,116 78,991 68,003 72,354 133,267 110,324

Molasses recovery % age 5.15 4.87 4.54 4.33 5.49 4.65

Sugar production M.Tons 209,498 140,946 134,202 162,580 223,325 207,747

Sugar recovery % age 10.02 9.99 10.09 10.65 9.97 10.30

Molasses production M.Tons 102,488 65,104 58,749 62,882 113,728 83,072

Molasses recovery % age 4.90 4.61 4.42 4.12 5.08 4.12

JDW Sugar Mills Limited

Sugar production M.Tons 781,634 556,142 548,219 640,277 888,711 813,406

Sugar recovery % age 10.01 9.98 10.36 11.29 10.55 10.27

Molasses production M.Tons 383,491 256,262 229,587 231,337 422,650 347,833

Molasses recovery % age 4.91 4.60 4.34 4.08 5.02 4.39

Sugar Production Sucrose Recovery

JDW SUGAR MILLS LIMITED 25

The Board members are familiar with the current vision,

28 2022 Annual Report

JDW SUGAR MILLS LIMITED 29

30 2022 Annual Report