Company Information

Board of Directors Shares’ Registrar

Mr. M. Saeed-uz-Zaman - Chairman Corplink (Pvt.) Limited
Mr. Zafar Mahmood - Chief Executive Officer Wings Arcade, 1-K (Commercial),
Mr. Imran Afzal Model Town, Lahore.
Mr. Aamir Jamil Tel: +92 42 35916714 & 19
Mr. Javed Saleem Arif Fax: +92 42 35869037
Mr. Tariq Ahmad Khan www.corplink.com.pk
Ms. Parveen Akhter Malik
Bankers
Mr. Saqib Anjum
Mr. Abdul Jaleel Shaikh Al Baraka Bank Limited
(Nominee - Pak Brunei Investment Company Limited) Allied Bank Limited
Askari Bank Limited
Executive Management
Bank Alfalah Ltd
Mr. Zafar Mahmood Bank Islami Pakistan Ltd
Mr. Khalid Mumtaz Qazi The Bank of Punjab
Mr. Imran Afzal Habib Bank Limited
Mr. Umar Iqbal Habib Metropolitian Bank Limited
Mr. Aamir Jamil Industrial & Commercial Bank of China (ICBC)
Mr. Muhammad Yahya Khan MCB Bank Limited
Meezan Bank Limited
Chief Financial Officer
National Bank of Pakistan
Syed Sajid Nasim Samba Bank Limited
Company Secretary Soneri Bank Limited
Standard Chartered Bank Pakistan Ltd
Mr. Muhammad Inam-ur-Rahim
Pak Brunei Investment Company Limited
Head of Internal Audit Pak Kuwait Investment Company (Pvt) Limited
Pak China Investment Company Limited
Mr. Nabeel Ahmad Khan
Pair Investment Company Limited
Audit Committee
Registered Office / Factory
Mr. Javed Saleem Arif - Chairman
14.8 km., Sheikhupura-Faisalabad Road,
Mr. Tariq Ahmad Khan - Member
Bhikhi, District Sheikhupura, Pakistan.
Mr. Abdul Jaleel Shaikh - Member
Tel: +92 56 3883001-7
Human Resource & Remuneration Committee Fax: +92 56 3883010
Ms. Parveen Akhter Malik - Chairman Cell: +92 301-8221151, 301-8483950
Mr. M. Saeed-uz-Zaman - Member Head Office
Mr. Zafar Mahmood - Member
122-B, New Muslim Town,
External Auditors Lahore, Pakistan.
EY Ford Rhodes Tel: +92 42 35926090-93
Chartered Accountants Fax: +92 42 35926099

Legal Advisor Website

Cornelius, Lane & Mufti www.nimir.com.pk

Advocates & Solicitors

2 Nimir Industrial Chemicals Ltd.

 OUR To become an industry leader through a

VISION
persistent commitment to customer focus,
technical innovation, managerial excellence,
entrepreneurial spirit and social responsibility.

OUR
To deliver unparalleled value to stakeholders and
continually striving to exceed customer expectations

MISSION
by developing innovative industrial chemical
solutions with special emphasis on workforce, health,
safety, environment and contribution to the national
economic development.

Annual Report 2022 3

 Chairman’s Message
Dear Stakeholders,

On behalf of the Board of Directors, I am pleased to present to you the Annual Report
of Nimir Industrial Chemicals Limited (“NICL”) highlighting NICL’s performance and
achievements for the year ended 30 June, 2022.

I am pleased to share that despite factors such as market volatility, domestic and
global challenges, the sales revenue recorded growth across all of our businesses.
NICL’s topline has reached to nearly Rs.40 billion; depicting an impressive growth
of 45% year-on-year. The operating profit increased by 21%, but net profit after tax
reduced slightly over last year mainly due to higher finance cost and additional taxes
imposed retrospectively during the year.

By the grace of Almighty and immense dedication of the management and entire team,
NICL continued to deliver strong business growth. I would like to express gratitude to
our stakeholders and everyone involved for their continued support and encouragement,
and, in particular would like to place on record unreserved appreciation for all personnel
of NICL for rendering invaluable services.

During the last five years, NICL has committed investments that have significantly
increased its footprint and shareholder value. NICL has created consistent value for all
stakeholders and has simultaneously contributed to the socio-economic development
of Pakistan. We will continue to operate with sincerity and commitment with a strong
focus on achieving optimal standards by investing in our environment, health and safety.
While several external factors do indicate the likelihood of increased uncertainty, I am
positive that we are well equipped to face and overcome any challenge and capitalize
on any opportunity that may arise.

Going forward, our objective is very clear: a balanced top and bottom-line growth.
NICL’s aim is to enhance its competitive position by extending manufacturing
capabilities, exploring new ideas, further expanding its market presence, and
delivering on all fronts; despite possible impacts by economic headwinds of higher
interest-rate driven finance costs, devaluation of the Pakistani rupee and an increase
in inflationary pressure. However, the Board and Management of NICL are focused on
creating enduring value for all stakeholders through improved operational efficiencies,
cost controls, portfolio diversification and leveraging strong customer relationships.

On behalf of the Board, I once again express my sincere appreciation to our management,
employees, suppliers, customers, Government and all other stakeholders, who have
supported and contributed towards NICL’s evolution and business performance. May
Allah Almighty continue to bless us all. Ameen.

Muhammad Saeed uz Zaman

Chairman

4 Nimir Industrial Chemicals Ltd.

CEO’s Message
Valued Stakeholders,

As one of the most well-regarded companies in Pakistan, Nimir Industrial Chemicals

Limited has always been a thought leader and innovator. The company believes that a
focus on sustainable solutions ensure long term success; it drives business growth and
innovation.

I am privileged to present the Annual Report of 2022. It is an opportunity for us to

collectively reflect, reset, and rejuvenate our mission to become a growth-oriented and
sustainable Company. Coming to the annual results of financial year 2022; we were able
to deliver another successful resilient performance during this fiscal year. The company’s
stand-alone gross turnover increased by 45% to PKR 40 billion and consolidated turnover
to PKR 49 billion. This was the first year when the company was able to export products
and our exports stood nearly PKR 1 billion. Moreover, the gross and operating profits
were increased by 21%. This achievement is, in fact, the reflection of our commitment
with the shareholders to continue enhancing the shareholders’ value. However due to
high interest rates and additional taxation during the year ended June 30, 2022, the
bottom line and EPS was slightly lower than last year.

Going forward, I see many challenges. Depleting FX reserves, fluctuating feedstock

prices, rising utility and financial costs, we expect margins to remain under pressure
during the coming financial year. Hence, we are now focusing on exports with the aim
to contribute more in the national exchequer. The projects initiated in last couple of
years are being completed. While some of the projects have been completed in the last
quarter of the period under review, but major projects would be commissioned in the
second quarter of the financial year 2023.

I would like to extend my gratitude to all our shareholders and stakeholders for their
continued support for navigating us through another year of success. I would also like
to thank all our stakeholders for trusting us and to the entire Nimir Family. I would like
to commend and congratulate each and every one of you for an astounding level of
resilience and commitment to excellence which has helped us get to where we are
today. With your support we will, follow the path of growth, profitability and long-term
sustainability of our business Insha’Allah.

Zafar Mahmood
Chief Executive Officer

Lahore, September 27, 2022

Annual Report 2022 5

Accreditations

Sedex is a not for profit membership organisation dedicated to driving

improvements in ethical and responsible business practices in global supply
chains.

The Roundtable on Sustainable Palm Oil (RSPO) was established in 2004 with
the objective of promoting the growth and use of sustainable oil palm products
through credible global standards and engagement of stakeholders.

Good Manufacturing Practices (GMP) in accordance with

ISO 22716 : 2007 - Guidelines for Cosmetics

6 Nimir Industrial Chemicals Ltd.

Core Business at a Glance

Distilled Fatty • Soap noodles

Acid / Oleo • Stearic Acid
Chemicals • Glycerine

Soap Noodles
• Toilet soap
(Palm Bright)

Stearic Acid • Tyre and Rubber • Plastic

(Double & Triple Press) • Textile Softener • Cosmetics
• Metal Polishing • Soap

• Pharmaceutical
• Alkyd Resin
Glycerine
• Tobacco
• Cosmetics

Caustic Soda
• Textile Sector
Sodium
Hypochlorite • Cleaning & Bleaching
• Steel
Hydrochloric Acid

• Third party toilet soap

Soap Bars
finishing and packing facility

• Body Sprays • Hair Sprays

Aerosols • Deodorants • Home Cleaners
• Antiperspirants • Starch Sprays
Home Care • Air Fresheners • Spray Paints
Personal Care • Insecticides • Automobile Cleaners
• Shaving Foam • Metal Cleaners

Annual Report 2022 7

Our Performance Standalone
PKR”Million”
2017 2018 2019 2020 2021 2022
Gross Turnover 8,624 14,222 17,432 20,220 27,169 39,564
Net Sales 7,369 12,091 14,850 17,173 23,094 33,786
Profit before taxation 701 887 1,159 1,349 2,397 2,466
Profit after Taxation 471 696 810 926 1,694 1,596
EBITDA 1,003 1,340 1,804 2,319 3,408 4,106
Long term loans and Leases 354 480 592 1,004 1,897 5,500
Equity 2,144 2,615 3,035 3,623 4,924 6,179
Current Assets 2,926 4,726 5,076 6,769 10,468 17,535
Current Liabilities 2,763 4,274 4,566 5,845 9,004 16,944
Current Ratio 1.06 1.11 1.11 1.16 1.16 1.03
Number of Shares (in Millions) 111 111 111 111 111 111
Breakup value per share - Rupees 19.4 23.6 27.4 32.8 44.5 55.9
Earning per share - Rupees 4.3 6.3 7.3 8.4 15.3 14.4
Dividend Per Share - Rupees 2.0 3.0 3.0 3.0 4.0 2.5

Gross Turnover Profitability

40,000 PKR in million
PKR in million
36,000 4,200
32,000 3,700
28,000 3,200 EBITDA
24,000 2,700
20,000 2,200
Profit before taxation
16,000 1,700
12,000 1,200 Profit after taxation
8,000 700
4,000 200
-
-300
2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022

EPS Vs Dividend (Rs.) Breakup Value

16.0 60.0 PKR per share
Dividend Per Share Earning Per Share
14.0 55.0
50.0
12.0 45.0
40.0
10.0
35.0
8.0 30.0
25.0
6.0 20.0
15.0
4.0
10.0
2.0 5.0
-
-
2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022

Equity & Long term loan Current Ratio

PKR in million PKR in million
6,000
Current Liabilities Current Assets
Long term loans and Leases Equity
5,000
18,000
16,000
4,000
14,000
3,000 12,000
10,000
2,000 8,000
6,000
1,000 4,000
2,000
- -
2017 2018 2019 2020 2021 2022
2017 2018 2019 2020 2021 2022

8 Nimir Industrial Chemicals Ltd.

Our Performance Consolidated
PKR”Million”
2017 2018 2019 2020 2021 2022
Gross Turnover 11,571 18,186 22,723 25,373 34,404 49,113
Net Sales 9,958 15,569 19,601 21,526 29,202 41,853
Profit before taxation 774 972 1,325 1,544 2,901 3,082
Profit after Taxation 508 796 966 1,061 2,056 1,972
EBITDA 1,187 1,535 2,181 2,743 4,081 4,991
Long term loans and Leases 463 592 704 1,120 2,109 5,770
Equity 2,696 3,265 3,842 4,565 6,226 7,857
Current Assets 4,567 7,034 7,635 9,284 13,643 22,247
Current Liabilities 3,921 6,010 6,423 7,606 11,036 20,187
Current Ratio 1.16 1.17 1.19 1.22 1.24 1.10
Number of Shares (in Millions) 111 111 111 111 111 111
Breakup value per share - Rupees 24.4 29.5 34.7 41.3 56.3 71.0
Earning per share - Rupees 4.29 6.62 7.87 8.88 16.57 15.76
Dividend Per Share - Rupees 2.00 3.00 3.00 3.00 4.00 2.50

Gross Turnover
PKR in million Profitability
PKR in million
50,000 6,000
45,000 EBITDA
40,000 5,000
35,000 4,000 Profit before tax
30,000
25,000 3,000
Profit after taxation
20,000
2,000
15,000
10,000 1,000
5,000
- -
2017 2018 2019 2020 2021 2022
2017 2018 2019 2020 2021 2022

Earning per share Breakup Value

18.00 Rupees 80.0 PKR per share
16.00 70.0
14.00 60.0
12.00 50.0
10.00
40.0
8.00
30.0
6.00
4.00 20.0
2.00 10.0
- -
2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022

Equity & Long term loan Current Ratio

PKR in million PKR in million
9,000 Current Liabilities Current Assets
Long term loans and Leases Equity 25,000
8,000
7,000 20,000
6,000
5,000 15,000
4,000
3,000 10,000
2,000
5,000
1,000
-
2017 2018 2019 2020 2021 2022 -
2017 2018 2019 2020 2021 2022

Annual Report 2022 9

Year at A Glance 2022

Standalone Consolidated
2021 2022 2021 2022
Rupees in Million Rupees in Million

Gross Turnover 27,169 39,564 34,404 49,113

Gross Profit 3,544 4,290 4,336 5,372
Operating Profit 3,046 3,685 3,697 4,599
Profit before taxation 2,397 2,466 2,901 3,082
Profit after taxation 1,694 1,596 2,056 1,972
EBITDA 3,408 4,106 4,081 4,991

Net Worth 4,924 6,179 6,226 7,857

Long Term Loans and Leases 1,897 5,500 2,109 5,770
Total Assets 16,269 30,128 19,860 35,365

Breakup value per share - Rupees 44.5 55.9 56.3 71.0

Earning per share - Rupees 15.3 14.4 16.6 15.8

Standalone

46% 21% 21%

Increase in Increase in Increase in
Gross Turnover Gross Profit Operating Profit

-6% 20% 25%

Decrease in Increase in Increase in
Profit after Tax EBITDA BreakUp Value

10 Nimir Industrial Chemicals Ltd.

 Wealth Generated and Distributed
FOR THE YEAR ENDED JUNE 2022

Standalone Consolidated
2022 2022
Rs in million % age Rs in million % age

Wealth Generated
Sales with sales Tax 39,564 99.9% 49,113 99.9%
Other operating profit 52 0.1% 72 0.1%
39,617 100% 49,186 100%

Distribution of Wealth
Cost of materials & services 27,499 69.4% 34,236 69.6%
Duties & taxes 8,567 21.6% 10,511 21.4%
Employees 845 2.1% 1,107 2.3%
Finance cost 1,120 2.8% 1,369 2.8%
Dividend 276 0.7% 276 0.6%
Wealth retained 1,310 3.3% 1,687 3.4%
39,617 100.0% 49,186 100.0%
- -

Standalone Consolidated

Finance cost Dividend Finance cost Dividend

2.8% 0.7% 2.8% 0.6%
Wealth Retained Wealth Retained
Employees 3.3% Employees 3.4%
2.1% 2.3%

Duties & taxes Duties & taxes

21.6% 21.4%
2021-22 2021-22

Cost of materials Cost of materials

& services & services
69.4% 69.6%

Annual Report 2022 11

Horizontal & Vertical Analysis

2017 2018 2019 2020 2021 2022

Rupees in million
BALANCE SHEET

Non Current Assets 2,548 2,862 3,438 4,079 5,801 12,593

Current Assets 2,926 4,726 5,076 6,769 10,468 17,535

TOTAL ASSETS 5,474 7,588 8,514 10,849 16,269 30,128

Share Capital and Reserves 2,144 2,615 3,035 3,623 4,924 6,179

Non Current Liabilities 567 699 913 1,381 2,341 7,006

Current Liabilities 2,763 4,274 4,566 5,845 9,004 16,944

TOTAL EQUITY AND LIABILITIES 5,474 7,588 8,514 10,849 16,269 30,128

PROFIT & LOSS ACCOUNT

Sales- Net 7,369 12,091 14,850 17,173 23,094 33,786

Cost of Sales 6,304 10,542 12,821 14,626 19,550 29,495

Gross Profit 1,065 1,549 2,030 2,546 3,544 4,290

Distribution & Administration Cost 230 254 296 369 498 605

Operating Profit 835 1,295 1,733 2,177 3,046 3,685

Other Expenses/ (Income) (2) 204 215 227 185 93

Finance Cost 135 204 359 602 464 1,127

Profit before Taxation 701 887 1,159 1,349 2,397 2,466

Taxation 229 192 349 423 702 870

Other Comprehensive Loss 4 4 3 6 7 9

Net Comprehensive income for the Year 467 692 807 920 1,688 1,586

12 Nimir Industrial Chemicals Ltd.

 Horizontal Analysis Vertical Analysis
2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022
percentages changes from last year Percentage

23.52 12.34 20.12 18.64 42.20 117.10 46.54 37.72 40.38 37.60 35.65 41.80

48.82 61.50 7.40 33.37 54.64 67.51 53.46 62.28 59.62 62.40 64.35 58.20

35.87 38.62 12.20 27.42 49.96 85.19 100.00 100.00 100.00 100.00 100.00 100.00

19.94 21.94 16.06 19.39 35.90 25.48 39.17 34.46 35.65 33.40 30.27 20.51

23.88 23.30 30.64 51.16 69.58 199.25 10.36 9.21 10.73 12.73 14.39 23.25

54.92 54.70 6.82 28.01 54.05 88.19 50.47 56.33 53.63 53.88 55.34 56.24

35.87 38.62 12.20 27.42 49.96 85.19 100.00 100.00 100.00 100.00 100.00 100.00

47.06 64.08 22.82 15.64 34.48 46.30 100.00 100.00 100.00 100.00 100.00 100.00

56.08 67.22 21.62 14.09 33.66 50.87 85.55 87.19 86.33 85.17 84.66 87.30

9.58 45.48 30.99 25.46 39.17 21.07 14.45 12.81 13.67 14.83 15.34 12.70

11.23 10.30 16.49 24.56 35.02 21.51 3.13 2.10 1.99 2.15 2.16 1.79

9.13 55.19 33.84 25.61 39.88 21.00 11.33 10.71 11.67 12.68 13.19 10.91

(103.5) (12,610.9) 5.6 5.3 (18.4) (50.0) (0.02) 1.69 1.45 1.32 0.80 0.27

49.61 50.82 76.00 67.33 (22.86) 142.86 1.84 1.69 2.42 3.50 2.01 3.34

16.15 26.58 30.61 16.44 77.65 2.88 9.51 7.34 7.80 7.86 10.38 7.30

40.94 (16.48) 81.94 21.25 66.16 23.91 3.11 1.58 2.35 2.46 3.04 2.58

162.33 (12.63) (23.94) 115.60 6.29 37.28 0.06 0.03 0.02 0.04 0.03 0.03

6.41 48.10 16.69 14.00 83.41 (6.00) 6.34 5.72 5.44 5.36 7.31 4.70

Annual Report 2022 13

Key Operating & Financial Data for Last Six Years
2017 2018 2019 2020 2021 2022
Rupees in million
Net Sales 7,369 12,091 14,850 17,173 23,094 33,786

Gross Profit 1,065 1,549 2,030 2,546 3,544 4,290

Operating Profit 835 1,295 1,733 2,177 3,046 3,685

Profit before taxation 701 887 1,159 1,349 2,397 2,466

Profit after taxation 471 696 810 926 1,694 1,596

EBITDA 1,003 1,340 1,804 2,319 3,408 4,106

Paid-up Capital 1,106 1,106 1,106 1,106 1,106 1,106

Net Worth 2,144 2,615 3,035 3,623 4,924 6,179

Long Term Loans and Leases 354 480 592 1,004 1,897 5,500

Deferred Liabilities 213 219 322 376 444 1,506

Current Liabilities 2,763 4,274 4,566 5,845 9,004 16,944

Total Equity and Liabilities 5,474 7,588 8,514 10,849 16,269 30,128

Current Assets 2,926 4,726 5,076 6,769 10,468 17,535

Non Current Assets 2,548 2,862 3,438 4,079 5,801 12,593

Total Assets 5,474 7,588 8,514 10,849 16,269 30,128

Breakup value per share - Rupees 19.4 23.6 27.4 32.8 44.5 55.9

Earnings per share - Rupees 4.3 6.3 7.3 8.4 15.3 14.4

Current Ratio 1.06 : 1 1.11 : 1 1.11 : 1 1.16 : 1 1.16 : 1 1.03 : 1

Lont Terms Debt to Equity Ratio 14 : 86 16 : 84 16 : 84 22 : 78 28 : 72 47 : 53

Interest Coverage Ratio 6.17 5.34 4.22 3.24 6.17 3.19

14 Nimir Industrial Chemicals Ltd.

15
Financial Statements - Separate
FOR THE YEAR ENDED JUNE 30, 2022

16 Directors’ Report
22 Statement of Compliance CCG
24 Review Report to the Members CCG
25 Report on the Audit of the Financial Statements
27 Statement of Financial Position
32 Notes to the Separate Financial Statements

Annual Report 2022 15

Directors’ Report
The Board of Directors of Nimir Industrial Chemicals Limited (the Future Outlook
“Company”) is pleased to submit the 29th Annual Report along with
the Audited financial statements for the year ended June 30, 2022. The management is focused on the continuous growth in the sales.
However due to high labor cost, fluctuating costs of feedstock, rising
During the year under review Pakistan’s economy registered a significant utility cost and financial cost margins are feared to be further squeezed
growth of 5.97% in GDP and 10.5% in large scale manufacturing sector. during the coming financial year.
The country also boosted exports to all time high to USD 31.8 billion.
Foreign remittances also showed record contribution of USD 31.2 billion The projects initiated in the last financial year are being completed
to the economy. Despite all these, the country is facing severe balance as per the scheduled timeline. While some of the projects have been
of payment challenge owing to significant increase in import bill from completed in the last quarter of the period under review, but major
USD 56 billion to USD 80 billion. This is mainly due to unprecedented projects would be commissioned by the second quarter of the financial
increase in the international prices of fuel, energy, food and all other year 2023.
commodities after Russia-Ukraine war.
With the completion of the above projects, we foresee decent growth
The Government has taken immediate measures to curtail imports, in sale turnover as well as reduction of energy cost in the financial year
with the aim to keep import bill within the limit of available foreign 2023. This is expected to increase the operating profit of the company
currency. These measures, though necessary to avoid any unpleasant during next financial year.
situation, have disturbed the procurement of industrial inputs and
resulted in slowing down the economy. The tightening monetary The management is, however, committed to perform its best to
policy, rising input costs, continuous declining Rupees are pressing the continue increasing shareholders value, Insha’Allah.
Economic growth for FY 2023, which is forecasted to be below 2.5%
by the IMF. Although Pakistan closed on loan deals with the IMF, the Credit Rating
devaluation of Pak Rupee has not stopped reflecting serious challenges
PACRA (Pakistan Credit Rating Agency) has maintained the credit
on balance of payment.
rating of the Company to A+ for long term and A1 for short term.
Performance of the Company’s Business
Summary of Key Operating and Financial Data of Last Six
Nimir Industrial Chemicals Limited has been able to post encouraging Financial Years
results during the financial year ended June 30, 2022, which are
Summary of key operating and financial data of last six years is annexed.
summarized as follows:
Outstanding statutory payments
2022 2021 Increase
PKR Million % age All outstanding payments are of nominal and routine nature.
Gross Sales Turnover 39,564 27,169 45.6% Gratuity Scheme
Gross Profit 4,290 3,544 21.1%
Operating Profit 3,685 3,046 21.0% The Company operates a funded gratuity scheme for its employee as
referred in Note 9 to the accounts.
Profit Before Taxation 2,466 2,397 2.9%
Profit After Taxation 1,596 1,694 -5.8% Board of Directors

The gross turnover of the company has been close to PKR 40 billion After the election in December 2021 currently, the Board of Directors
during the year, showing a 45% year-on-year growth. The gross and consists of nine members – eight male and one female. Out of these
operating profits grew by 21% over the corresponding period. However directors, three are executive and six are non-executive (including
due to high interest rate and increasing working capital requirement to three independent directors).
cater to increased costs, the financial cost grew by 2.43 times over the
last year. This increase in financial cost limited the growth in before tax The board has two sub committees: Audit Committee and Human
profit to 2.9%. The retrospective Super tax at the rate of 10% for the Resource and Remuneration Committee, the composition of which are
TY 2022 imposed by the government through Finance act 2022 pushed shown below:
the Profit After Tax growth rate into red.

16 Nimir Industrial Chemicals Ltd.

Audit Committee: The fee of the Non-Executive and Independent Directors for attending
the Board and Committee meetings of the Company is determined by
1. Mr. Javaid Saleem Arif Chairman Independent Director the Board from time to time.
2. Mr. Tariq Ahmad Khan Member Independent Director
Corporate Governance
3. Mr. Abdul Jaleel Shaikh, Member Non-Executive Director
As required under Code of Corporate Governance incorporated in the
Human Resource and Remuneration Committee: Listing Rules of the Pakistan Stock Exchange Limited in the country,
the Board of Directors is pleased to state as follows:
1. Ms. Parveen Akhtar Malik Chairperson Independent Director
2. Mr. M. Saeed uz Zaman Member Non-Executive Director • The financial statements, prepared by the management of the
3. Mr. Zafar Mahmood Member Executive Director Company, present fairly its state of affairs, the results of its
operations, cash flows and changes in equity,
During the fiscal year, five (5) Board, four (4) Audit Committee, and one (1)
HR & Remuneration Committee meetings were held. The attendance of the • Proper books of accounts of the Company have been maintained,
directors is as follows:
• Appropriate accounting policies have been consistently applied
in preparation of the financial statements and accounting
Board of Audit HR & R estimates are based on reasonable and prudent judgment,
Name of Director
Directors Committee Committee
• International Financial Reporting Standards (IFRS), as applicable
M. Saeed-uz-Zaman 5/5 – 1/1 in Pakistan, have been followed in the preparation of financial
Zafar Mahmood 5/5 – 1/1 statements,

Imran Afzal 3/3 – – • The system of internal controls is sound in design and has been
Aamir Jamil 3/3 – – effectively implemented and monitored,

Javed Saleem Arif 5/5 4/4 – • There is no significant doubt upon the company’s ability to
Tariq Ahmed Khan 5/5 4/4 – continue as a going concern,
Parveen Akhter Malik 5/5 – 1/1 • There has been no material departure from the best practices of
Saqib Anjum 2/3 – – the Corporate Governance, as detailed in the listing regulations,
Abdul Jaleel Shaikh - PBIC 5/5 4/4 – • Key operating and financial data for the last 6 years is annexed.
M. Iqbal 2/2 – – and
Umar Iqbal 2/2 – – • Outstanding taxes and levies are given in the notes to the
Khalid Mumtaz Qazi 2/2 – – financial statements.

Board Evaluation The management of the Company is committed to good corporate

governance and taking all appropriate measures to comply with best
In accordance with the Code of Corporate Governance (CCG) and the practices, and continuously reviewing the system of internal controls
Companies Act, 2017 the evaluation of the Board, its committees in the light of Companies Act, 2017.
and individual directors was conducted. The Board is assisted by
sub-committees, i.e. the Audit Committee and the HR&R Committee, Corporate Social Responsibilities
and these sub-committees held meetings during the year as per the
The Company recognizes its social responsibilities as a key member
stipulations of the CCG. It is also important to recognize the key role
of the community. It is committed to contribute its resources for the
played by the sub-committees in highlighting areas of improvements
betterment of the environment with an unprejudiced approach. Its
and recommending practical solutions.
Health, Safety, and environmental (HSE) policies are geared towards
Directors’ Remuneration Policy the betterment of employees and community.

Executive Directors’ remuneration is fixed as per the formal policy The Company ensures environment friendly operations, products,
approved by the Board in line with the Companies Act, 2017 and the and services while promoting environmental awareness among
Code of Corporate Governance. its employees and the community. It inducts employees from the

Annual Report 2022 17

Directors’ Report

surrounding community, offers internship/apprenticeship opportunities Chief Financial Officer, Company Secretary, Company Executive and
to technical institutes, and encourages student visits from different their spouses and minor children during the year except those which
educational institutions. The Company also support needy children of are mentioned in the annexed statement required under code of CCG.
the employees for studies to promote education in the country.
Necessary returns in this respect were filed with the regulatory
Subsidiary Companies authorities besides informing the Board and the Stock Exchange of the
said transactions as required under the Code of Corporate Governance.
Nimir Industrial Chemicals Limited holds 51% shares in Nimir
Management Private Limited and 11.63% shares in Nimir Resins Acknowledgment
Limited directly. The Company’s effective shareholding in NRL stands
unchanged at 37.64%. We are thankful to our valued stakeholders including customers, banks,
suppliers, contractors, and shareholders, regulators for their excellent
Internal Financial Control support and confidence. We also thank our employees for their focused
dedication and hard work throughout this period.
The Company has a system of internal control which is sound in design
and has been effectively implemented and monitored. The Board
assumes the overall responsibility of overseeing the internal control
processes.

Related Party Transaction

The Company has made detailed disclosures about the related party
transaction in the financial statements annexed with the annual report.
Such disclosure is in line with the requirement of the Companies Act,
2017 and applicable international Financial Reporting Standards.

A complete list of all Related Party Transaction is compiled and

submitted by the Internal Auditor, which has verified that all
transactions or arrangements with all the related parties were carried
out in the ordinary course and are conducted on an arm’s length basis
to the Board’s Audit Committee every quarter. After the review by
the Audit Committee the transactions or arrangements with all the
related parties were placed before the Board of Directors for their
consideration and approval.

External Auditors

The present auditors, EY Ford Rhodes, Chartered Accountant, who

are retiring this year, have offered themselves for reappointment. The
Audit Committee has recommended the reappointment of M/s EY Ford
Rhodes Chartered Accountant as external auditor of the Company for
the year ending June 30, 2023.

Dividend / Bonus Shares

The Board has recommended a PKR 1.5 per share (i.e. 15%) final cash For and on behalf of the Board
dividend for the year ended June 30, 2022. The Board had earlier
declared and paid interim cash dividends totaling PKR 1.0 per share
(i.e. 10%). The total cash dividend for the year remained PKR 2.5 per
share (i.e. 25%).
Zafar Mahmood Aamir Jamil
Pattern of Shareholding

The pattern of shareholding of the Company is annexed. There was no Lahore

September 27, 2022
trading in the shares of the Company by the Directors, Chief Executive,

18 Nimir Industrial Chemicals Ltd.

TRANSFORMING
FOR A
SUSTAINABLE
FUTURE Annual Report 2022 19
 15% 1.5/-
10% 1/-

25% 2.5/-

20 Nimir Industrial Chemicals Ltd.

 2021 2022

45.6% 27,169 39,564

21.1% 3,544 4,290
21.0% 3,046 3,685
2.9% 2,397 2,466
-5.8% 1,694 1,596

1/1 – 5/5
1/1 – 5/5
– – 3/3
– – 3/3
– 4/4 5/5
– 4/4 5/5
1/1 – 5/5
– – 2/3
– 4/4 5/5
– – 2/2
– – 2/2
– – 2/2

Annual Report 2022 21

Statement of Compliance with the Listed Companies
(Code of Corporate Governance) Regulations, 2019
FOR THE YEAR ENDED JUNE 30, 2022

Nimir Industrial Chemicals Limited (the “Company”) has complied the requirement of the Regulations in the following manner:

Note: The Board was reconstituted after the elections in December 2021.

1. The total number of directors is 09 as detailed below:

a. Male : 08
b. Female : 01

2. The composition of the board is as follows:

S. No. Categaory Name

1 Independent Director 1. Mr. Javed Saleem Arif

2. Mr. Tariq Ahmed Khan
3. Ms. Parveen Akhter Malik
2 Executive Director 1. Mr. Zafar Mahmood - Chief Executive Officer
2. Mr. Imran Afzal
3. Mr. Aamir Jamil
3 Non- Executive Director 1. Mr. Muhammad Saeed uz Zaman - Chairman
2. Mr. Saqib Anjum
3. Mr. Abdul Jaleel Shaikh
4 Female Director 1. Ms. Parveen Akhter Malik

3. The directors have confirmed that none of them is serving as a director on more than seven listed companies (as applicable), including this
Company (excluding the listed subsidiaries of listed holding companies where applicable).

4. The Company has prepared a “Code of Conduct” and has ensured that appropriate steps have been taken to disseminate it throughout the
Company along with its supporting policies and procedures..

5. The board has developed a vision/mission statement, overall corporate strategy and significant policies of the Company.

6. All the powers of the board have been duly exercised and decisions on relevant matters have been taken by the board/shareholders as
empowered by the relevant provisions of the Companies Act, 2017 and these Regulations.

7. The meetings of the board were presided over by the Chairman and, in his absence, by a director elected by the board for this purpose. The
board has complied with requirements of the Act and the Regulations with respect to frequency, recording and circulating minutes of the
meeting of board.

8. The Board of Directors (Board) have a formal policy and transparent procedures for remuneration of directors in accordance with the Act and
these Regulations.

9. During the year Chief Executive Officer (CEO) of the existing Board, and Chief Financial Officer and Company Secretary also had successfully
completed their respective training under Directors’ Training Program.

10. The Board has approved appointment of Chief Financial Officer (CFO), Company Secretary and Head of Internal Audit, including their
remuneration and terms and conditions of employment and complied with relevant requirements of the Regulations.

11. Chief Financial Officer (CFO) and Chief Executive Officer (CEO) duly endorsed the financial statements before approval of the board.

22 Nimir Industrial Chemicals Ltd.

12. The Board has formed committees comprising of members given below:

I. Audit Committee:
I. Mr. Javed Saleem Arif – Chairman
II. Mr. Tariq Ahmad Khan
III. Mr. Abdul Jaleel Shaikh

II. HR and Remuneration Committee:

I. Ms. Parveen Akhter Malik – Chairperson
II. Mr. Muhammad Saeed uz Zaman
III. Mr. Zafar Mahmood

13. The terms of reference of the aforesaid committees have been formed, documented and advised to the committee for compliance.

14. The frequency of meetings (quarterly/half-yearly/yearly) of the committees were as per following:

I. Audit Committee

Four quarterly meetings were held during the financial year ended June 30, 2022.

II. HR & Remuneration Committee

One meeting(s) was held during the financial year ended June 30, 2022.

15. The board has set up an effective internal audit function, which is considered suitably qualified and experienced for the purpose and are
conversant with the policies and procedures of the Company.

16. The statutory auditors of the company have confirmed that they have been given a satisfactory rating under the Quality Control Review
program of the 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 (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 relative (spouse, parent,
dependent and non-dependent children) of the Chief Executive Officer (CEO), Chief Financial Officer (CFO), Head of Internal Audit, Company
Secretary or 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, these regulations or any other requirement and the auditors have confirmed that they have observed IFAC guidelines in this regard.

18. We confirm that all other requirements of the regulations 3,6,7,8,27,32, 33 and 36 of the Regulations have been complied with.

19. Explanation for noncompliance with requirements, other than regulations 3,6,7,8,27,32,33 and 36, are below: Not Applicable.

For Nimir Industrial Chemicals Limited

Muhammad Saeed uz Zaman Zafar Mahmood

Chairman Chief Executive Officer

Lahore
September 27, 2022

Annual Report 2022 23

Review Report to the Members on Statement
of Compliance With Best Practices of CCG

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 Nimir Industrial Chemicals Limited (the Company) for the year ended 30 June 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 30 June 2022.

EY Ford Rhodes
Chartered Accountants
Audit Engagement Partner : Ahsan Shahzad

Lahore
September 30 2022

UDIN: CR202210079bgEuqBFNa

24 Nimir Industrial Chemicals Ltd.

Report on the Audit of the Financial Statements
FOR THE YEAR ENDED JUNE 30, 2022

Opinion Basis for Opinion

We have audited the annexed financial statements of Nimir Industrial We conducted our audit in accordance with International Standards
Chemicals Limited (the Company), which comprise the statement of on Auditing (ISAs) as applicable in Pakistan. Our responsibilities under
financial position as at 30 June 2022, and the statement of profit or loss, those standards are further described in the Auditors’ Responsibilities
the statement of comprehensive income, the statement of changes in for the Audit of the Financial Statements section of our report. We
equity, the statement of cash flows for the year then ended, and notes are independent of the Company in accordance with the International
to the financial statements, including a summary of significant accounting Ethics Standards Board for Accountants’ Code of Ethics for Professional
policies and other explanatory information, and we state that we have Accountants as adopted by the Institute of Chartered Accountants of
obtained all the information and explanations which, to the best of our Pakistan (the Code) and we have fulfilled our other ethical responsibilities
knowledge and belief, were necessary for the purposes of the audit. 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.
In our opinion and to the best of our information and according to the
explanations given to us, the statement of financial position, statement Key Audit Matters
of profit or loss, statement of comprehensive income, the statement of
Key audit matters are those matters that, in our professional judgment,
changes in equity and the statement of cash flows together with the
were of most significance in our audit of the financial statements of the
notes forming part thereof conform with the accounting and reporting
current period. These matters were addressed in the context of our audit
standards as applicable in Pakistan and give the information required by
of the financial statements as a whole, and in forming our opinion thereon,
the Companies Act, 2017 (XIX of 2017), in the manner so required and
and we do not provide a separate opinion on these matters.
respectively give a true and fair view of the state of the Company’s affairs
as at 30 June 2022 and of the profit, total comprehensive income, the Following are the key audit matters:
changes in equity and its cash flows for the year then ended.
Key audit matters How the matter was addressed in our audit
Revenue Recognition
As described in Note 5.12 and Note 29 to the accompanied unconsolidated Our audit procedures amongst others included the following:
financial statements, the Company generates revenue from several
Obtained an understanding of the Company’s processes and related
types of products and services including three major categories i.e. oleo
internal controls for revenue recognition and on a sample basis, tested
chemicals, chlor alkali and toll manufacturing. During the year ended 30
the effectiveness of those controls, specifically in relation to recognition
June 2022, the
of revenue and timing thereof;
Company generated net revenue of Rs. 33.79 billion as compared to Rs. On a sample basis, reviewed sales transactions near the reporting date
23.09 billion during the previous year, which represents an increase of to assess whether transactions are recorded in relevant accounting
approximately 46% as compared to last year. period;
The revenue recognition is identified as a key audit matter due to revenue Performed procedures to analyze the variation in price and quantity sold
being one of the key performance indicators of the Company and raises during the year;
the risk that revenue could be misstated to meet targets.
Reconciled revenue recorded in the books of account on a sample basis
with underlying accounting records including dispatch and delivery
documents; and
Assessed the adequacy of the related disclosures in accordance with the
applicable financial reporting standards and the Companies Act, 2017.

Information Other than the Financial Statements and Auditor’s is to read the other information and, in doing so, consider whether the
Report Thereon other information is materially inconsistent with the financial statements,
or our knowledge obtained in the audit or otherwise appears to be
Information Other than the Financial Statements and Auditors’ Report
materially misstated. If, based on the work we have performed, we
Thereon
conclude that there is a material misstatement of this other information,
Management is responsible for the other information. The other we are required to report that fact. We have nothing to report in this
information comprises the information included in the Annual Report regard.
but does not include the financial statements and our auditors’ report
Responsibilities of Management and Board of Directors for the
thereon.
Financial Statements
Our opinion on the financial statements does not cover the other
Management is responsible for the preparation and fair presentation
information and we do not express any form of assurance conclusion
of the financial statements in accordance with the accounting and
thereon.
reporting standards as applicable in Pakistan and the requirements
In connection with our audit of the financial statements, our responsibility of Companies Act, 2017 (XIX of 2017) and for such internal control as

Annual Report 2022 25

Report on the Audit of the Financial Statements
FOR THE YEAR ENDED JUNE 30, 2022

management determines is necessary to enable the preparation of continue as a going concern.

financial statements that are free from material misstatement, whether
• Evaluate the overall presentation, structure and content of the
due to fraud or error.
financial statements, including the disclosures, and whether the
In preparing the financial statements, management is responsible financial statements represent the underlying transactions and
for assessing the Company’s ability to continue as a going concern, events in a manner that achieves fair presentation.
disclosing, as applicable, matters related to going concern and using the
We communicate with the board of directors regarding, among other
going concern basis of accounting unless management either intends
matters, the planned scope and timing of the audit and significant audit
to liquidate the Company or to cease operations, or has no realistic
findings, including any significant deficiencies in internal control that we
alternative but to do so.
identify during our audit.
Board of directors are responsible for overseeing the Company’s financial
We also provide the board of directors with a statement that we have
reporting process.
complied with relevant ethical requirements regarding independence,
Auditors’ Responsibilities for the Audit of the Financial and to communicate with them all relationships and other matters that
Statements may reasonably be thought to bear on our independence, and where
applicable, related safeguards.
Our objectives are to obtain reasonable assurance about whether the
financial statements as a whole are free from material misstatement, From the matters communicated with the board of directors, we
whether due to fraud or error, and to issue an auditors’ report that determine those matters that were of most significance in the audit of
includes our opinion. Reasonable assurance is a high level of assurance the financial statements of the current period and are therefore the key
but is not a guarantee that an audit conducted in accordance with ISAs audit matters. We describe these matters in our auditors’ report unless
as applicable in Pakistan will always detect a material misstatement law or regulation precludes public disclosure about the matter or when,
when it exists. Misstatements can arise from fraud or error and are in extremely rare circumstances, we determine that a matter should not
considered material if, individually or in the aggregate, they could be communicated in our report because the adverse consequences of
reasonably be expected to influence the economic decisions of users doing so would reasonably be expected to outweigh the public interest
taken on the basis of these financial statements. benefits of such communication.
As part of an audit in accordance with ISAs as applicable in Pakistan, Report on Other Legal and Regulatory Requirements
we exercise professional judgment and maintain professional skepticism
Based on our audit, we further report that in our opinion:
throughout the audit. We also:
a) proper books of account have been kept by the Company as
• Identify and assess the risks of material misstatement of the
required by the Companies Act, 2017 (XIX of 2017);
financial statements, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain b) the statement of financial position, the statement of profit or
audit evidence that is sufficient and appropriate to provide a basis loss, statement of comprehensive income, the statement of
for our opinion. The risk of not detecting a material misstatement changes in equity and the statement of cash flows together with
resulting from fraud is higher than for one resulting from error, the notes thereon have been drawn up in conformity with the
as fraud may involve collusion, forgery, intentional omissions, Companies Act, 2017 (XIX of 2017) and are in agreement with
misrepresentations, or the override of internal control. the books of account and returns;
• Obtain an understanding of internal control relevant to the audit c) investments made, expenditure incurred and guarantees
in order to design audit procedures that are appropriate in the extended during the year were for the purpose of the Company’s
circumstances, but not for the purpose of expressing an opinion business; and
on the effectiveness of the Company’s internal control.
d) zakat deductible at source under the Zakat and Ushr Ordinance,
• Evaluate the appropriateness of accounting policies used and the 1980 (XVIII of 1980), was deducted by the Company and
reasonableness of accounting estimates and related disclosures deposited in the Central Zakat Fund established under section 7
made by management. of that Ordinance.
• Conclude on the appropriateness of management’s use of the The engagement partner on the audit resulting in this independent
going concern basis of accounting and, based on the audit auditors’ report is Ahsan Shahzad.
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 auditors’ report to the related disclosures
in the financial statements or, if such disclosures are inadequate,
to modify our opinion. Our conclusions are based on the audit Lahore EY Ford Rhodes
evidence obtained up to the date of our auditors’ report. However, September 30, 2022 Chartered Accountants
future events or conditions may cause the Company to cease to UDIN: AR202210079CeJAD1TZI

26 Nimir Industrial Chemicals Ltd.

Statement of Financial Position
AS AT JUNE 30, 2022

2022 2021
Note
Rupees Rupees
EQUITY AND LIABILITIES
SHARE CAPITAL AND RESERVES
Authorized share capital
145,000,000 (2021: 145,000,000) Ordinary shares of Rs.10 each 1,450,000,000 1,450,000,000
Issued, subscribed and paid up capital 6 1,105,905,460 1,105,905,460
Unappropriated profits - revenue reserve 5,072,836,550 3,818,120,940
6,178,742,010 4,924,026,400
NON CURRENT LIABILITIES
Long-term loans 7 5,428,141,420 1,809,092,279
Lease liabilities 8 71,739,400 87,591,723
Net defined benefit liability - funded gratuity 9 151,982,862 128,418,646
Deferred tax liability 10 440,319,945 314,595,926
Deferred grant 11 913,532,529 1,426,717
7,005,716,156 2,341,125,291
CURRENT LIABILITIES
Trade and other payables 12 1,980,252,695 1,533,941,807
Contract liabilities 13 93,472,936 146,679,086
Mark up accrued 355,984,178 99,355,733
Unclaimed dividend 12,325,435 10,766,577
Short-term borrowings 14 13,040,527,898 5,869,058,112
Current maturity of long-term loans 7 384,195,136 415,071,353
Current maturity of lease liabilities 8 38,670,693 29,099,326
Current maturity of deferred grant 11 168,378,206 7,685,720
Provision for taxation 870,184,294 892,176,798
16,943,991,471 9,003,834,512
CONTINGENCIES AND COMMITMENTS 15 - -
TOTAL EQUITY AND LIABILITIES 30,128,449,637 16,268,986,203
ASSETS
NON CURRENT ASSETS
Property, plant and equipment 16 12,309,192,553 5,544,090,450
Intangibles 17 30,487,348 -
Investment in subsidiaries 18 202,384,469 202,384,469
Loan to subsidiary 19 14,512,000 14,512,000
Long-term deposits 20 36,811,932 39,618,732
12,593,388,302 5,800,605,651
CURRENT ASSETS
Stores, spare parts and loose tools 21 527,801,596 292,093,536
Stock-in-trade 22 7,823,007,102 5,950,815,960
Trade debts 23 6,219,981,029 3,226,711,120
Loans and advances 24 105,443,666 65,100,000
Trade deposits and short-term prepayments 25 19,912,251 11,060,556
Other receivables 26 153,228,985 45,632,770
Tax refunds due from the Government 27 2,425,410,359 818,537,258
Cash and bank balances 28 260,276,347 58,429,352
17,535,061,335 10,468,380,552
TOTAL ASSETS 30,128,449,637 16,268,986,203
The annexed notes from 1 to 46 form an integral part of these unconsolidated financial statements.

Chief Executive Officer Director Chief Financial Officer

Annual Report 2022 27

Statement of Profit or Loss
FOR THE YEAR ENDED JUNE 30, 2022

2022 2021
Note
Rupees Rupees

Revenue from contracts with customers - gross 39,564,124,471 27,168,722,104

Less: Sales tax, trade discounts and commission (5,778,476,690) (4,074,978,477)
Revenue from contracts with customers - net 29 33,785,647,781 23,093,743,627

Cost of sales 30 (29,495,243,747) (19,550,009,220)

Gross profit 4,290,404,034 3,543,734,407

Distribution costs 31 (227,418,225) (182,112,951)

Administrative expenses 32 (377,687,055) (315,860,706)
(605,105,280) (497,973,657)
Operating profit 3,685,298,754 3,045,760,750

Other expenses 33 (145,072,453) (226,784,743)

Other income 34 52,443,951 41,693,483

Finance costs 35 (1,126,894,948) (464,002,217)

Profit before taxation 2,465,775,304 2,396,667,273

Taxation 36 (870,144,950) (702,237,981)

Profit after taxation 1,595,630,354 1,694,429,292

Earnings per ordinary share - basic and diluted 37 14.43 15.32

The annexed notes from 1 to 46 form an integral part of these unconsolidated financial statements.

Chief Executive Officer Director Chief Financial Officer

28 Nimir Industrial Chemicals Ltd.

Statement of Comprehensive Income
FOR THE YEAR ENDED JUNE 30, 2022

2022 2021
Note
Rupees Rupees
Profit after taxation 1,595,630,354 1,694,429,292
Other comprehensive income
Other comprehensive income that will not be reclassified to profit or loss in subsequent
periods:
Re-measurement losses on defined benefit plan 9.4 (13,646,427) (9,380,315)
Deferred tax 4,503,321 2,720,291
Re-measurement losses on defined benefit plan - net (9,143,106) (6,660,024)
Other comprehensive income that may be reclassified to profit or loss in subsequent
- -
periods
Other comprehensive loss for the year (9,143,106) (6,660,024)
Total comprehensive income for the year 1,586,487,248 1,687,769,268

The annexed notes from 1 to 46 form an integral part of these unconsolidated financial statements.

Statement of Changes in Equity

FOR THE YEAR ENDED JUNE 30, 2022
Issued,
subscribed and Unappropriated
profits-Revenue Total
paid up share reserve
capital
Rupees Rupees Rupees
Balance as on 1 July 2020 1,105,905,460 2,517,418,583 3,623,324,043
Profit after taxation - 1,694,429,292 1,694,429,292
Other comprehensive loss - (6,660,024) (6,660,024)
Total comprehensive income for the year - 1,687,769,268 1,687,769,268
Final dividend for 2020 @ Rs. 1.50 per share - (165,885,819) (165,885,819)
Interim dividend for 2021 @ Rs. 2.00 per share - (221,181,092) (221,181,092)
Balance as on 30 June 2021 1,105,905,460 3,818,120,940 4,924,026,400
Profit after taxation - 1,595,630,354 1,595,630,354
Other comprehensive loss - (9,143,106) (9,143,106)
Total comprehensive income for the year - 1,586,487,248 1,586,487,248
Final dividend for 2021 @ Rs.2.00 per share - (221,181,092) (221,181,092)
Interim dividend for 2022 @ Rs.1.00 per share - (110,590,546) (110,590,546)
Balance as on 30 June 2022
1,105,905,460 5,072,836,550 6,178,742,010

The annexed notes from 1 to 46 form an integral part of these unconsolidated financial statements.

Chief Executive Officer Director Chief Financial Officer

Annual Report 2022 29

Statement of Cash Flows
FOR THE YEAR ENDED JUNE 30, 2022

2022 2021
Note
Rupees Rupees
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before taxation 2,465,775,304 2,396,667,273
Adjustment for:
Depreciation 16.2.4 513,119,242 547,247,685
Amortization 17 1,793,373 -
Reversal of expected credit loss 33 (20,190,677) 32,292,905
Reversal of provision for slow moving stores and spares 33 (3,029,447) 11,000,000
Mark-up expense 1,098,921,083 453,861,873
Provision for gratuity 9.3 30,917,789 24,492,273
Grant income 34 (14,670,974) (11,395,557)
Gain on extingushment of original GIDC liability 34 - (10,162,332)
Gain on disposal of property, plant and equipment 34 (557,724) (475,926)
Exchange loss - unrealized - 12,532,153
Workers' profit participation fund provision 33 132,515,713 129,340,589
Workers' welfare fund provision 33 43,101,394 53,549,401
1,781,919,772 1,242,283,064
Operating profit before working capital changes 4,247,695,076 3,638,950,337
(Increase) / decrease in current assets
Stores, spare parts and loose tools (232,678,613) (15,220,640)
Stock-in-trade (1,872,191,142) (2,356,913,513)
Trade debts (2,973,079,232) (1,131,829,214)
Loans and advances (40,343,666) 997,724
Trade deposits and short-term prepayments (8,851,695) (6,930,086)
Other receivables (107,596,215) (24,037,043)
Tax refunds due from the Government (1,191,918,880) (653,567)
(6,426,659,443) (3,534,586,339)
Increase / (decrease) in current liabilities
Trade and other payables 451,348,027 70,703,393
Contract liabilities (53,206,150) 32,796,913
398,141,877 103,500,306
(6,028,517,566) (3,431,086,033)
Contribution to gratuity fund 9.4 (21,000,000) (2,700,000)
Mark-up paid (815,888,812) (400,381,459)
Income tax paid (1,176,864,335) (597,989,476)
Long-term deposits paid 2,806,800 (3,652,500)
Workers' profit participation fund paid 12.4 (129,340,589) (72,349,420)
Workers' welfare fund paid 12.5 (52,546,000) (25,036,467)
(2,192,832,936) (1,102,109,322)

Net cash flows used in operating activities (3,973,655,426) (894,245,018)

Balance carried forward (3,973,655,426) (894,245,018)

30 Nimir Industrial Chemicals Ltd.

Statement of Cash Flows (Continued)
FOR THE YEAR ENDED JUNE 30, 2022

2022 2021
Note
Rupees Rupees

Balance brought forward (3,973,655,426) (894,245,018)

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of property, plant and equipment - net (268,554,961) (265,985,459)
Additions in capital work-in-progress (6,998,068,849) (1,994,676,225)
Sale proceeds from disposal of property, plant and equipment 20,363,189 1,642,299
Additions in intagible asset (32,280,721) -

Net cash flows used in investing activities (7,278,541,342) (2,259,019,385)

CASH FLOWS FROM FINANCING ACTIVITIES

Long-term loan obtained 5,068,561,181 1,184,129,523

Repayment of long-term loans (407,589,959) (111,892,078)
Dividend paid (330,212,780) (389,704,619)
Payment of lease liabilities (48,184,465) (54,335,235)
Short-term borrowings - net 7,171,469,786 2,481,773,435

Net cash flows generated from financing activities 11,454,043,763 3,109,971,026

Net increase / (decrease) in cash and cash equivalents 201,846,995 (43,293,377)

Cash and cash equivalents at the beginning of the year 58,429,352 101,722,729

Cash and cash equivalents at the end of the year 260,276,347 58,429,352

The annexed notes from 1 to 46 form an integral part of these unconsolidated financial statements.

Chief Executive Officer Director Chief Financial Officer

Annual Report 2022 31

Notes to the Financial Statements - Separate
FOR THE YEAR ENDED JUNE 30, 2022

1 THE COMPANY AND ITS OPERATIONS

Nimir Industrial Chemicals Limited (‘the Company’) was incorporated in Pakistan as a public limited company and its shares are listed
on Pakistan Stock Exchange. The Company is engaged in manufacturing and sales of chemical products along with toll manufacturing of
aerosol and soap products. Following are the business units of the Company along with their respective locations:

Business Unit Address

Registered office and plant 14.8 km, Sheikhupura-Faisalabad Road, Mouza Bhikki, District Sheikhupura, Pakistan.
Head office Nimir House, 12-B, New Muslim Town, Lahore, Pakistan.
Subsequent to the year end, the head office of the Company has been relocated to Plot No. 122, Block B, Muslim Town, Lahore.

1.1 Nimir Industrial Chemicals Limited is part of Nimir Group which consist of:

% age of Direct % age of Effective

Subsidiary Companies
shareholding shareholding
Nimir Management (Private) Limited (“NMPL”) 51% 51%
Nimir Resins Limited (“NRL”) 11.63% 37.64%
The registered office of Nimir Management (Private) Limited (NMPL) is Nimir House, 12-B, New Muslim Town, Lahore, Pakistan. NMPL
was formed for the purpose of investment in Nimir Resins Limited.

NRL is a listed company engaged in the manufacturing of surface coating resins, polyesters, optical brightener and textile auxiliaries. The
registered office of the NRL is 14.5 Km, Lahore-Sheikhupura Road, Lahore. NRL is a sub-subsidiary of the Company as 51% shares of NRL
are held by the NMPL, accordingly the Company exercises control over NRL.

These financial statements are the separate financial statements of the Company in which investment in subsidiary companies are
accounted for on cost basis rather than on the basis of reported results. Consolidated financial statements are prepared separately.

2 STATEMENT OF COMPLIANCE

These financial statements have been prepared in accordance with the accounting and reporting standards as applicable in Pakistan. The
accounting and reporting standards applicable in Pakistan comprise of:

- International Financial Reporting Standards (IFRS Standards) issued by the International Accounting Standards Board (IASB) as
notified under 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 lFRS Standards, the provisions of and directives
issued under the Companies Act, 2017 have been followed.

2.1 New standards, interpretations and amendments applicable to the financial statements for the year ended 30 June
2022

The accounting policies adopted are consistent with those of the previous financial year, except for the following new and amended
standards and interpretations effective for annual period beginning on 1 July 2021, as listed below. The Company has not early-
adopted any standard, interpretation or amendment that has been issued but is not yet effective except which is mentioned below
in Note 2.1.3.

New Amendments

2.1.1 IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 - Interest Rate Benchmark Reforms - Phase 2 — (Amendments)

In August 2020, the IASB published Interest Rate Benchmark Reform – Phase 2, Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4
and IFRS 16. With publication of the phase two amendments, the IASB has completed its work in response to IBOR reform. The
amendments provide temporary reliefs which address the financial reporting effects when an interbank offered rate (IBOR) is
replaced with an alternative nearly risk-free interest rate (RFR).

The amendments include a practical expedient to require contractual changes, or changes to cash flows that are directly required
by the reform, to be treated as changes to a floating interest rate, equivalent to a movement in a market rate of interest. Inherent
in allowing the use of this practical expedient is the requirement that the transition from an IBOR benchmark rate to an RFR takes
place on an economically equivalent basis with no value transfer having occurred.

32 Nimir Industrial Chemicals Ltd.

 Any other changes made at the same time, such as a change in the credit spread or maturity date, are assessed. If they are
substantial, the instrument is derecognised. If they are not substantial, the updated effective interest rate (EIR) is used to
recalculate the carrying amount of the financial instrument, with any modification gain or loss recognised in profit or loss. The
practical expedient is also required for entities applying IFRS 4 that are using the exemption from IFRS 9 (and, therefore, apply IAS
39 Financial Instruments: Recognition and Measurement) and for IFRS 16 Leases, to lease modifications required by IBOR reform.

2.1.2 IFRS 16 Covid-19-Related Rent Concessions beyond 30 June 2021 – Amendment to IFRS 16

In March 2021, the Board amended the conditions of the practical expedient in IFRS 16 that provides relief to lessees from applying
the IFRS 16 guidance on lease modifications to rent concessions arising as a direct consequence of the covid-19 pandemic.
As a practical expedient, a lessee may elect not to assess whether a covid-19 related rent concession from a lessor is a lease
modification. A lessee that makes this election accounts for any change in lease payments resulting from the covid-19 related rent
concession the same way it would account for the change under IFRS 16, if the change were not a lease modification. Following
the amendment, the practical expedient now applies to rent concessions for which any reduction in lease payments affects only
payments originally due on or before 30 June 2022, provided the other conditions for applying the practical expedient are met.

Lessees will apply the amendment retrospectively, recognising the cumulative effect of initially applying it as an adjustment to
the opening balance of retained earnings (or other component of equity, as appropriate) at the beginning of the annual reporting
period in which they first apply the amendment. In the reporting period in which a lessee first applies the 2021 amendment, the
lessee will not be required to disclose the information required by paragraph 28(f) of IAS 8.

The amendment to IFRS 16 will provide relief to lessees for accounting for rent concessions from lessors specifically arising from
the covid-19 pandemic. While lessees that elect to apply the practical expedient do not need to assess whether a concession
constitutes a modification, lessees still need to evaluate the appropriate accounting for each concession as the terms of the
concession granted may vary.

2.1.3 IAS 16 Property, plant and equipment: Proceeds before intended use — (Amendments)

In May 2020, the IASB issued Property, Plant and Equipment — Proceeds before Intended Use , which prohibits entities from
deducting from the cost of an item of property, plant and equipment (PP&E), any proceeds of the sale of items produced while
bringing that asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Instead, an entity recognises the proceeds from selling such items, and the costs of producing those items, in profit or loss.

The amendment is effective for annual periods beginning on 1st January 2022 and must be applied retrospectively only to items
of property, plant and equipment made available for use on or after the beginning of the earliest period presented when the entity
first applies the amendment. However, the Company has early adopted this amendment on July 1, 2021 retrospectively.
The adoption of above amendments applied for the first time in the period did not have any material impact on the financial
statements of the Company.

2.2 Standards, interpretation and amendments to approved accounting standards that are not yet effective

The following standards, amendments and interpretations with respect to the approved accounting standards as applicable in
Pakistan would be effective from the dates mentioned below against the respective standard or interpretation:

Standard or Interpretation

2.2.1 IFRS 3 Reference to conceptual framework — (Amendments)

In May 2020, the IASB issued Amendments to IFRS 3 Business Combinations - Reference to the Conceptual Framework. The
amendments are intended to replace a reference to a previous version of the IASB’s Conceptual Framework (the 1989 Framework)
with a reference to the current version issued in March 2018 (the Conceptual Framework) without significantly changing its
requirements.

The amendments add an exception to the recognition principle of IFRS 3 to avoid the issue of potential ‘day 2’ gains or losses
arising for liabilities and contingent liabilities that would be within the scope of IAS 37 Provisions, Contingent Liabilities and
Contingent Assets or IFRIC 21 Levies, if incurred separately. The exception requires entities to apply the criteria in IAS 37 or IFRIC
21, respectively, instead of the Conceptual Framework, to determine whether a present obligation exists at the acquisition date.
At the same time, the amendments add a new paragraph to IFRS 3 to clarify that contingent assets do not qualify for recognition
at the acquisition date.

Annual Report 2022 33

Notes to the Financial Statements - Separate
FOR THE YEAR ENDED JUNE 30, 2022

The amendments are effective for annual periods beginning on 1st January 2022 and must be applied prospectively. Earlier
application is permitted if, at the same time or earlier, an entity also applies all of the amendments contained in the Amendments
to References to the Conceptual Framework in IFRS Standards (March 2018).
2.2.2 IAS 37 Onerous contracts - costs of fulfilling a contract — (Amendments)
In May 2020, the IASB issued amendments to IAS 37 to specify which costs an entity needs to include when assessing whether
a contract is onerous or loss-making.
The amendments apply a ‘directly related cost approach’. The costs that relate directly to a contract to provide goods or services
include both incremental costs (e.g., the costs of direct labour and materials) and an allocation of costs directly related to
contract activities. General and administrative costs do not relate directly to a contract and are excluded unless they are explicitly
chargeable to the counterparty under the contract.
The amendments are effective for annual periods beginning on 1st January 2022 and must be applied prospectively to contracts
for which the Company has not yet fulfilled all of its obligations at the beginning of the annual reporting period in which it first
applies the amendments (the date of initial application). Earlier application is permitted and must be disclosed.
2.2.3 AIP IFRS 1 First-time Adoption of International Financial Reporting Standards - Subsidiary as a first- time adopter
As part of its 2018-2020 annual improvements to IFRS standards process , the IASB issued ab amendment to IFRS 1 First-time
Adoption of International Financial Reporting Standards. The amendment permits a subsidiary that elects to apply paragraph
D16(a) of IFRS 1 to measure cumulative translation differences using the amounts reported in the parent’s consolidated financial
statements, based on the parent’s date of transition to IFRS, if no adjustments were made for consolidation procedures and for the
effects of the business combination in which the parent acquired the subsidiary. This amendment is also applied to an associate
or joint venture that elects to apply paragraph D16(a) of IFRS 1.
The amendment is effective for annual reporting periods beginning on or after 1 January 2022 with earlier application is permitted
2.2.4 AIP IAS 41 Agriculture - Taxation in fair value measurements
As part of its 2018-2020 annual improvements to IFRS standards process the IASB issued amendment to IAS 41 Agriculture. The
amendment removes the requirement in paragraph 22 of IAS 41 that entities exclude cash flows for taxation when measuring the
fair value of assets within the scope of IAS 41.
An entity applies the amendment prospectively to fair value measurements on or after the beginning of the first annual reporting
period beginning on or after 1 January 2022 with earlier adoption permitted.
2.2.5 AIP IFRS 9 - Fees in the ’10 per cent’ test for derecognition of financial liabilities
As part of its 2018-2020 annual improvements to IFRS standards process the IASB issued amendment to IFRS 9.
The amendment clarifies the fees that an entity includes when assessing whether the terms of a new or modified financial liability
are substantially different from the terms of the original financial liability. These fees include only those paid or received between
the borrower and the lender, including fees paid or received by either the borrower or lender on the other’s behalf. An entity applies
the amendment to financial liabilities that are modified or exchanged on or after the beginning of the annual reporting period in
which the entity first applies the amendment.
The amendment is effective for annual reporting periods beginning on or after 1 January 2022 with earlier adoption permitted.
The Group will apply the amendments to financial liabilities that are modified or exchanged on or after the beginning of the annual
reporting period in which the entity first applies the amendment.
2.2.6 IAS 1 Classification of liabilities as current or non-current — (Amendments)
In January 2020, the IASB issued amendments to paragraphs 69 to 76 of IAS 1 to specify the requirements for classifying liabilities
as current or non-current. The amendments clarify:

- What is meant by a right to defer settlement

- That a right to defer must exist at the end of the reporting period
- That classification is unaffected by the likelihood that an entity will exercise its deferral right
- That only if an embedded derivative in a convertible liability is itself an equity instrument would the terms of a liability not
impact its classification

34 Nimir Industrial Chemicals Ltd.

 The amendments are effective for annual reporting periods beginning on or after 1 January 2023 and must be applied
retrospectively. The Company is currently assessing the impact the amendments will have on current practice and whether
existing loan agreements may require renegotiation.
2.2.7 IAS 1 and IFRS Practice Statement 2 - Disclosure of Accounting Policies - (Amendments)
In February 2021, the IASB issued amendments to IAS 1 and IFRS Practice Statement 2 Making Materiality Judgements, in
which it provides guidance and examples to help entities apply materiality judgements to accounting policy disclosures. The
amendments aim to help entities provide accounting policy disclosures that are more useful by replacing the requirement for
entities to disclose their ‘significant’ accounting policies with a requirement to disclose their ‘material’ accounting policies and
adding guidance on how entities apply the concept of materiality in making decisions about accounting policy disclosures.
The amendments to IAS 1 are applicable for annual periods beginning on or after 1 January 2023 with earlier application permitted.
Since the amendments to the Practice Statement 2 provide non-mandatory guidance on the application of the definition of
material to accounting policy information, an effective date for these amendments is not necessary.
The Company expects that the adoption of the above improvements to the standards will have no material effect on the Company’s
financial statements, in the period of initial application.
2.2.8 IAS 8 - Definition of accounting estimates — (Amendments)
In February 2021, the IASB issued amendments to IAS 8, in which it introduces a definition of ‘accounting estimates’. The
amendments clarify the distinction between changes in accounting estimates and changes in accounting policies and the
correction of errors. Also, they clarify how entities use measurement techniques and inputs to develop accounting estimates.
The amendments are effective for annual reporting periods beginning on or after 1 January 2023 and apply to changes in accounting
policies and changes in accounting estimates that occur on or after the start of that period. Earlier application is permitted as long
as this fact is disclosed.
2.2.9 IFRS 10 & IAS 28 - Sale or Contribution of Assets between an Investor and its Associate or Joint - Venture –
(Amendment)
In December 2015, the IASB decided to defer the effective date of the amendments until such time as it has finalised any
amendments that result from its research project on the equity method. Early application of the amendments is still permitted.
‘The amendments address the conflict between IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates
and Joint Ventures in dealing with the loss of control of a subsidiary that is sold or contributed to an associate or joint venture. The
amendments clarify that a full gain or loss is recognised when a transfer to an associate or joint venture involves a business as
defined in IFRS 3. Any gain or loss resulting from the sale or contribution of assets that does not constitute a business, however,
is recognised only to the extent of unrelated investors’ interests in the associate or joint venture.
The amendments must be applied prospectively. Early application is permitted and must be disclosed.
The Company expects that such improvements to the standards will not have any material impact on the Company’s financial
statements in the period of initial application.
In addition to the above standards and amendments, improvements to various accounting standards and conceptual framework
have also been issued by the IASB. Such improvements are generally effective for accounting periods beginning on or after 01
January 2022.
The Company expects that such improvements to the standards will not have any material impact on the Company’s financial
statements.
Further, following new standards have been issued by IASB which are yet to be notified by the SECP for the purpose of applicability
in Pakistan.
Effective date
Standard or Interpretation (annual periods
beginning on or after)
IFRS 1 First-time Adoption of International Financial Reporting Standard 1 July 2009
IFRS 17 Insurance Contracts 1 January 2023
The Company expects that above standards will not have any material impact on the Company’s financial statements.

Annual Report 2022 35

Notes to the Financial Statements - Separate
FOR THE YEAR ENDED JUNE 30, 2022

3 BASIS OF PREPARATION

3.1 Basis of measurement

These financial statements have been prepared under the ‘historical cost convention’ except for following:
- Staff retirement benefits are recognized on the basis mentioned in note 5.13
- Stock-in-trade measured at lower of cost and net realizable value.

3.2 Presentation currency

These financial statements are presented in Pak Rupee, which is the also Company’s functional currency.

4 USE OF ESTIMATES AND JUDGMENTS

The preparation of financial statements in conformity with the accounting and reporting standards as applicable in Pakistan requires
management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and
liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and
estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future
periods.

Estimates and ssumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant
risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below.
The Company based its assumptions and estimates on parameters available when the consolidated financial statements were prepared.
Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances
arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

a) Useful lives, residual values and depreciation method of property, plant and equipment – Note 5.1

The Company reviews the useful lives and residual value of property, plant and equipment on a regular basis. Any change in
estimates in future years might affect the carrying amounts of the respective items of property, plant and equipment with a
corresponding effect on the depreciation charge.

b) Provision for expected credit losses of trade receivable – Note 5.6.1

The Company uses a provision matrix to calculate ECLs for trade receivables. The provision rates are based on days past due
for groupings of various customer segments that have similar loss patterns (i.e., by geography, product type, customer type and
rating, and coverage by letters of credit and other forms of credit insurance).

The provision matrix is initially based on the Company’s historical observed default rates. the Company will calibrate the matrix
to adjust the historical credit loss experience with forward-looking information. For instance, if forecast economic conditions (i.e.,
gross domestic product) are expected to deteriorate over the next year which can lead to an increased number of defaults in the
manufacturing sector, the historical default rates are adjusted. At every reporting date, the historical observed default rates are
updated and changes in the forward-looking estimates are analysed.

The assessment of the correlation between historical observed default rates, forecast economic conditions and ECLs is a
significant estimate. The amount of ECLs is sensitive to changes in circumstances and of forecast economic conditions. the
Company’s historical credit loss experience and forecast of economic conditions may also not be representative of customer’s
actual default in the future.

c) Estimation of provision - Note 5.9

As the actual outflows can differ from estimates made for provisions due to changes in laws, regulations, public expectations,
technology, prices and conditions, and can take place many years in the future, the carrying amounts of provisions are reviewed
at each reporting date and adjusted to take account of such changes. Any adjustments to the amount of previously recognised
provision is recognised in the statement of profit or loss unless the provision was originally recognised as part of cost of an asset.

d) Staff retirement benefits - Note 5.13

Calculations in this respect require assumptions to be made of future outcomes, the principal ones being in respect of mortality

36 Nimir Industrial Chemicals Ltd.

 rate, withdrawal rate, increase in remuneration and the discount rate used to convert future cash flows to current values.
Calculations are sensitive to changes in the underlying assumptions.

e) Provision for inventory obsolescence - Note 21 and 22

The Company reviews the carrying amount of stock in trade, stores and spares on an annual basis, and as appropriate, inventory
is written down to its net realizable value, or a provision is made for obsolescence if there is any change in the usage pattern and
physical form of related inventory. Net realizable value signifies the estimated selling price in the ordinary course of business, less
the estimated costs of completion and the estimated costs necessary to make the sale.

f) Taxation - Note 5.10

The Company takes into account the current income tax law and decisions taken by the taxation authorities. Instances where the
Company’s views differ from the views taken by the income tax department at the assessment stage and where the Company
considers that its view on items of material nature is in accordance with law, the amounts are shown as contingent liabilities.

The Company recognizes deferred tax assets, to the extent it is probable that taxable profits and tax liability, as applicable, will
be available against which the deductible temporary differences and tax credits can be utilized, based on its assessment of the
probability and sufficiency of future taxable profits, future reversals of existing taxable temporary differences and ongoing tax
planning strategies while also keeping in view the provisions of Income Tax Ordinance, 2001 related to adjustment / carry forward
of the underlying temporary differences and tax credits, in subsequent years.

g) Contingencies - Note 5.9

The Company reviews the status of all the legal cases on a regular basis. Based on the expected outcome and lawyers’ judgments,
appropriate disclosure or provision is made.

h) Impairment of non financial assets

The carrying amount of the Company’s assets are reviewed at each reporting date to determine whether there is any indication of
impairment loss. If any such indication exists, the recoverable amount is estimated in order to determine the extent of impairment
loss, if any.

5 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accounting policies applied are consistent with prior year except as stated otherwise.
5.1 Property, plant and equipment
Owned assets
Property, plant and equipment are stated at cost less accumulated depreciation and impairment, if any, except land which is
stated at cost. Cost of property, plant and equipment consists of historical cost and directly attributable cost of bringing the assets
to their present location and condition.

Depreciation is calculated using the straight line method at rates disclosed in Note 16.1 which are considered appropriate to write
off the cost of the assets over their useful lives.

Depreciation on additions is charged from the month in which an asset is acquired or capitalized while no depreciation is charged
for the month in which the asset is disposed of.
The carrying amounts of the Company’s assets are reviewed at each reporting date to determine whether there is any indication of
impairment. If any such indication exists, the carrying amounts of such assets are reviewed to assess whether they are recorded
in excess of their recoverable amount. Where carrying values exceed the respective recoverable amount, assets are written down
to their recoverable amounts and the resulting impairment is recognized as expense. The recoverable amount is the higher of an
asset’s fair value less cost to sell and value in use. Where an impairment loss is charged, the depreciation charge is adjusted for
the future periods to allocate the asset’s revised carrying amount over its estimated useful life.
Subsequent costs are included in the asset’s carrying amount or recognized as separate asset, as appropriate, only when it
is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be
measured reliably. All other repair and maintenance costs are charged to income during the period in which they are incurred.
An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected from

Annual Report 2022 37

Notes to the Financial Statements - Separate
FOR THE YEAR ENDED JUNE 30, 2022

its use or disposal. The gain or loss on disposal or retirement of an asset represents the difference between the sale proceeds and
the carrying amount of the asset and is recognized in statement of profit and loss as income or expense.
The assets residual values and useful lives are reviewed at each financial year end, and adjusted if impact on depreciation is
significant.
Capital Work-in-Progress
These are stated at cost less impairment loss, if any, including capitalization of borrowing costs. It consists of expenditures
incurred in respect of fixed assets in the course of their construction and installation.
Leased Asset
a) Right-of-use assets
The Company recognizes 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 recognized, 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.
b) Lease liabilities - rented premises
In calculating the present value of lease payments, the Company uses its incremental borrowing rate at the lease commencement
date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of
lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying
amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments
(e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change
in the assessment of an option to purchase the underlying asset.
5.2 Intangibles
Intangibles acquired separately are measured on initial recognition at cost. Following initial recognition, intangibles are carried at
cost less any accumulated amortization and any accumulated impairment losses. The useful lives of intangibles are measured to
be finite. Intangibles with finite lives are amortized over the useful life using straight line method and assessed for impairment
whenever there is an indication that the asset may be impaired. The amortization period and amortization method for an intangibles
with a finite life is reviewed at each financial period end. The amortization expense is recognized in profit or loss in the expense
category consistent with the function of the intangibles.
Amortization on additions is charged from the month in which an asset is acquired or capitalized while no amortization is charged
for the month in which the asset is disposed off.
5.3 Stock-in-trade
Stock-in-trade, stores, spares and loose tools are valued at lower of cost or net realizable value except those in transit, which are
valued at invoice value including other charges, if any, incurred thereon. Basis of determining cost is as follows:
Raw and packing material - weighted average cost
Material in transit - cost
Work in process - cost
Finished goods - weighted average cost
Stores, spare parts and loose tools - weighted average cost
Items considered obsolete are carried at nil value. Provision for obsolete and slow moving inventory is based on management
estimates of usage in normal business operations. Net realizable value is determined on the basis of estimated selling price of the
product in the ordinary course of business less costs of completion and costs necessary to be incurred in order to make the sale.
5.4 Trade debts
Trade debts from local customers are stated at amortized cost less expected credit losses while foreign debtors are stated at
translated amount by applying exchange rate applicable on the reporting date less expected credit losses.
The company has applied the simplified approach to measuring expected credit losses, which uses a lifetime expected loss
allowance. Refer to accounting policies of financial assets in note 5.6.1

38 Nimir Industrial Chemicals Ltd.

 5.5 Cash and cash equivalents

The Company expects that above standards will not have any material impact on the Company’s financial statements.

For the purpose of cash flow statement, cash and cash equivalents comprise of cash and bank balances.

5.6 Financial instruments - initial recognition and subsequent measurement

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.

5.6.1 Financial assets

Financial assets - initial recognition

Financial assets are classified, at initial recognition, and subsequently measured at amortized cost, fair value through other
comprehensive income (OCI), and fair value through profit or loss.

The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics
and the Company’s business model for managing them. With the exception of trade debts and bank balance that do not contain
a significant financing component or for which the Company has applied the practical expedient, the Company initially measures
a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs.
Trade debts 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. Refer to the accounting policy in Revenue from contracts with
customers.

In order for a financial asset to be classified and measured at amortized cost or fair value through OCI, it needs to give rise to cash
flows that are ‘solely payments of principal and interest (SPPI)’ on the principal amount outstanding. This assessment is referred
to as the SPPI test and is performed at an instrument level.

The Company’s business model for managing financial assets refers to how it manages its financial assets in order to generate
cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the
financial assets, or both.

Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention
in the market place (regular way trades) are recognized on the trade date, i.e., the date that the Company commits to purchase or
sell the asset.

The Company’s financial assets include long-term deposits, trade debts, advance to employees against salary, other receivables
and bank balances.

Financial assets - subsequent measurement

For purposes of subsequent measurement, financial assets are classified in four categories:

a) Financial assets at fair value through profit or loss

b) Financial assets at amortized cost (debt instruments)
c) Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon derecognition
(equity instruments)
d) Financial assets at fair value through OCI with recycling of cumulative gains and losses (debt instruments)

a) Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss include financial assets held for trading, financial assets designated upon initial
recognition at fair value through profit or loss, or financial assets mandatorily required to be measured at fair value. Financial
assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. Derivatives,
including separated embedded derivatives, are also classified as held for trading unless they are designated as effective hedging
instruments. Financial assets with cash flows that are not solely payments of principal and interest are classified and measured
at fair value through profit or loss, irrespective of the business model. Notwithstanding the criteria for debt instruments to be
classified at amortized cost or at fair value through OCI, as described above, debt instruments may be designated at fair value
through profit or loss on initial recognition if doing so eliminates, or significantly reduces, an accounting mismatch.

Annual Report 2022 39

Notes to the Financial Statements - Separate
FOR THE YEAR ENDED JUNE 30, 2022

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 recognized in the statement of profit or loss.

This category includes derivative instruments and listed equity investments which the Company had not irrevocably elected to
classify at fair value through OCI. Dividends on listed equity investments are also recognized as other income in the statement of
profit or loss when the right of payment has been established.

A derivative embedded in a hybrid contract, with a financial liability or non-financial host, is separated from the host and accounted
for as a separate derivative if: the economic characteristics and risks are not closely related to the host; a separate instrument with
the same terms as the embedded derivative would meet the definition of a derivative; and the hybrid contract is not measured at
fair value through profit or loss. Embedded derivatives are measured at fair value with changes in fair value recognized in profit or
loss. Reassessment only occurs if there is either a change in the terms of the contract that significantly modifies the cash flows
that would otherwise be required or a reclassification of a financial asset out of the fair value through profit or loss category.

A derivative embedded within a hybrid contract containing a financial asset host is not accounted for separately. The financial
asset host together with the embedded derivative is required to be classified in its entirety as a financial asset at fair value through
profit or loss.

The Company does not presently have financial asset at fair value through profit or loss.

b) Financial assets at amortized cost (debt instruments)

This category is the most relevant to the Company. The Company measures financial assets at amortized cost if both of the
following conditions are met:

• The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash
flows; 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

Financial assets at amortized cost are subsequently measured using the effective interest (EIR) method and are subject to
impairment. Gains and losses are recognized in profit or loss when the asset is derecognized, modified or impaired.

The Company’s financial assets at amortized costs includes long-term deposits, trade debts, advance to employees against salary
and other receivables.

c) Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon
derecognition (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 recognized as other income in the
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 does not have any financial assets designated at fair value through OCI (equity instruments).

d) Financial assets at fair value through OCI with recycling of cumulative gains and losses (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

40 Nimir Industrial Chemicals Ltd.

 For debt instruments at fair value through OCI, interest income, foreign exchange revaluation and impairment losses or reversals
are recognized in the statement of profit or loss and computed in the same manner as for financial assets measured at amortized
cost. The remaining fair value changes are recognized in OCI. Upon derecognition, the cumulative fair value change recognized in
OCI is recycled to profit or loss.

The Company does not have debt instruments recorded at fair value through OCI with recycling of cumulative gains and losses.

Financial assets - Derecognition

A financial asset (or, where applicable a part of a financial asset or part of a Company of similar financial assets) is primarily
derecognized when:

The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash
flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Company has transferred
substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the
risks and rewards of the asset, but has transferred control of the asset.

When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement,
it evaluates if, and to what extent, it has retained the risks and rewards of ownership. When it has neither transferred nor retained
substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognized to the extent of the
Company’s continuing involvement in the asset. In that case, the Company also recognizes an associated liability. The transferred
asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.

Continuing involvement that takes the form of a guarantee over the transferred asset, is measured at the lower of the original
carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay.

Financial assets - Impairment

The Company recognizes an allowance for expected credit losses (“ECL”) 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 asset’s original
effective interest rate.

ECLs are recognized in two stages. For credit exposures for which there has not been a significant increase in credit risk since
initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months
(a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition,
a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the
default (a lifetime ECL). A financial asset is written off when there is no reasonable expectation of recovering the contractual cash
flows.

For trade debts, the Company applies a simplified approach in calculating ECLs based on lifetime expected credit losses. 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 debtors and the economic environment. The expected credit losses are recognized in the statement
of profit or loss.

For bank balances, the Company applies a general approach in calculating ECLs based on lifetime expected credit losses. The
Company reviews internal and external information available for each bank balance to assess expected credit loss and the
likelihood to receive the outstanding contractual amount. The expected credit losses are recognized in the statement of profit or
loss.

5.6.2 Financial liabilities

Financial liabilities - initial recognition

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings,
payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.

All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly
attributable transaction costs.

Annual Report 2022 41

Notes to the Financial Statements - Separate
FOR THE YEAR ENDED JUNE 30, 2022

The Company’s financial liabilities include long-term loans, short-term borrowings utilized under mark-up arrangements, creditors,
liabilities against assets subject to finance lease, accrued and other liabilities.
Financial liabilities - subsequent measurement
Loans and borrowings
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the EIR method.
Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR amortization
process.
Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral
part of the EIR. The EIR amortization is included as finance costs in the statement of comprehensive income.
This category applies to long-term loans, short-term borrowings utilized under mark-up arrangements, creditors, liabilities against
assets subject to finance lease, accrued and other liabilities.
Financial liabilities - derecognition
A financial liability is derecognized 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 a derecognition of the original liability
and the recognition of a new liability, and the difference in the respective carrying amounts is recognized in the statement of profit
or loss.
5.6.3 Offsetting of financial assets and financial liabilities
Financial assets and liabilities are offset and the net amount is reported in the statement of financial position if the Company has
legally enforceable right to offset the recognized amounts and the Company intends to settle either on a net basis or realize the
asset and settle the liability simultaneously.
5.7 Government grants
Government grants are recognized where there is reasonable assurance that the grant will be received and all attached conditions
will be complied with. When the grant relates to an expense item, it is recognized as income on a systematic basis over the
periods that the related costs, for which it is intended to compensate, are expensed. When the grant relates to an asset, it is
recognized as income in equal amounts over the expected useful life of the related asset.
When the Company receives grants of non-monetary assets, the asset and the grant are recorded at nominal amounts and released
to unconsolidated statement of profit or loss over the expected useful life of the asset, based on the pattern of consumption of the
benefits of the underlying asset by equal annual instalments.
5.8 Trade and other payables
Creditors relating to trade and other payables are carried at cost which is the fair value of the consideration to be paid in the future
for goods and services received, whether or not billed to the Company.
5.9 Provisions and contingencies
a) Provisions
Provisions are recognized in the statement of financial position when the Company has a legal or constructive obligation as a result
of past events and it is probable that outflow of resources embodying economic benefits will be required to settle the obligation
and a reliable estimate of the amount can be made. However, provisions are reviewed at each statement of financial position
date and adjusted to reflect current best estimate. Where outflow of resources embodying economic benefits is not probable, a
contingent liability is disclosed, unless the possibility of outflow is remote.
b) Contingencies
The assessment of the contingencies inherently involves the exercise of significant judgment as the outcome of the future events
cannot be predicted with certainty. The Company, based on the availability of the latest information, estimates the value of
contingent assets and liabilities which may differ on the occurrence / non-occurrence of the uncertain future events.

42 Nimir Industrial Chemicals Ltd.

 5.10 Taxation
Current
Provision for the current tax is based on the taxable income for the year determined in accordance with the provisions of the
Income Tax Ordinance, 2001. The charge for current tax is calculated using prevailing tax rates or tax rates expected to apply to
the profit for the year if enacted 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.
Deferred
Deferred tax is provided using the balance sheet method for all temporary differences at the reporting date between tax base of
assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred tax liability is recognized for all taxable temporary differences and deferred tax assets are recognized for all deductible
temporary differences, carry forward of unused tax credits and unused tax losses, if any, to the extent that it is probable that
future taxable profit will be available against which the deductible temporary differences, carry-forward of unused tax credits and
unused tax losses can be utilized.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the liability is settled
based on tax rates that have been enacted or substantially enacted at the balance sheet date.
5.11 Contract liabilities
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 recognized when the payment is made or the payment is due (whichever is earlier).
Contract liabilities are recognized as revenue when the Company performs under the contract.
5.12 Revenue recognition
The Company is in the business of providing goods (i.e. oleo chemicals, chlor alkali and aerosols) and services (i.e. toll manufacturing).
Revenue from contracts with customers is recognized when control of the goods or services are transferred to the customer at
an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services.
Specific revenue recognition details are as follows:
Sale of goods
Revenue from the sale of goods is recognized upon the transfer of control of the goods to the buyer when performance obligation
is satisfied, which refers to the storage of processed finished soap noodles in Company’s warehouse and its intimation to the
respective customer, the delivery or the dispatch of such goods to respective customer, as agreed in the contract. Payment is
generally due within 30 to 90 days of satisfaction of performance obligation.
Service income from toll manufacturing
Sale of goods and toll manufacturing services are distinct performance obligations as the promise to transfer the goods and to
provide services are distinct within the context of the contract. The goods and services are not inputs to a combined item in
the contract. In addition, the goods and services are not highly interdependent or highly interrelated, because the performance
obligation for goods is satisfied upon storage of processed goods into separate warehouse and its intimation to the customer
or delivery to the customer if toll manufacturing services are not opted by the customer, while performance obligation for toll
manufacturing services is satisfied upon completion of goods into packaged soap and dispatch of such goods to customers. The
Company determines the transaction price of the sale of goods and the toll manufacturing services based on relative stand-alone
selling prices.
Service income from toll manufacturing is recognized upon the completion of processing of soap noodles into packaged soaps
and dispatch of such packaged soaps to respective customer. Payment is generally due within 30 to 90 days of satisfaction of
performance obligation.
Cost to obtain contract
The Company pays sales commission to its distributors and dealers for each contract that they obtain for sale of goods. The

Annual Report 2022 43

Notes to the Financial Statements - Separate
FOR THE YEAR ENDED JUNE 30, 2022

Company has elected to apply the optional practical expedient for costs to obtain a contract which allows the Company to
immediately charge sales commissions (included in note 29) because the amortization period of the asset that the Company
otherwise would have used is one year or less.
Profit on bank deposit
Profit earned on saving and deposit accounts is accrued on time proportion basis by reference to the principal outstanding at the
applicable rate of return.
5.13 Staff retirement benefits
Defined benefit plan
The Company formed an approved funded defined benefit gratuity plan for all of its permanent employees (excluding members of
executive management). Under this plan, gratuity is paid to the retiring employees on the basis of their last drawn gross salary for
each completed year of service.
Experience adjustments are recognized in other comprehensive income when they occur. Amounts recorded in statement of profit
or loss are limited to current and past service cost, gains or losses on settlements, and net interest income / expense. All other
changes in net defined benefit liability are recognized in other comprehensive income with no subsequent recycling to statement
of profit or loss.
5.14 Foreign currency translation
Foreign currency transactions are recorded at the rate of exchange prevailing on the date of transactions. Monetary assets and
liabilities in foreign currencies are translated into Pak rupees at the rate of exchange prevailing at the balance sheet date.
Profits or losses arising on translation are recognized in the statement of profit or loss.
5.15 Borrowing costs
Borrowing costs are recognized as an expense in the period in which these are incurred except to the extent of borrowing costs
that are 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. Such borrowing costs are capitalized as part of the cost of the
qualifying asset.
5.16 Operating segments
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision
maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating
segments, has been identified as the Board of Directors that makes strategic decision. The management has determined that the
Company has a single reportable segment, as Board of Directors views the Company’s operations as one reportable segment.
5.17 Sales tax
Expenses and assets are recognized net of the amount of sales tax, except:
- When the sales tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case,
the sales tax is recognized as part of the cost of acquisition of the asset or as part of the expense item, as applicable.
- When receivables and payables are stated with the amount of sales tax included the net amount of sales tax recoverable from,
or payable to, the taxation authority is included as part of receivables or payables in the unconsolidated statement of financial
position.
6 ISSUED, SUBSCRIBED AND PAID UP CAPITAL

2022 2021 2022 2021

No. of shares Rupees Rupees

110,590,546 110,590,546 Ordinary shares of Rs. 10 each fully paid in cash 1,105,905,460 1,105,905,460

44 Nimir Industrial Chemicals Ltd.

7 LONG-TERM LOANS 2022 2021
Note
Rupees Rupees
Term finance 7.1 2,035,166,005 941,635,571
Term finance - under refinance scheme for payroll financing 7.2 44,876,916 129,798,464
Term finance - under temporary economic refinance facility 7.3 3,717,781,635 1,138,217,597
Loan from directors / sponsors - unsecured 7.4 14,512,000 14,512,000
5,812,336,556 2,224,163,632
Mark up accrued 96,991,545 26,239,494
5,909,328,101 2,250,403,126
Current maturity of term finance (296,211,181) (330,149,806)
Current maturity under refinance scheme for payroll financing (44,876,916) (84,921,547)
Current maturity under temporary economic refinance facility (43,107,039) -
Less: Current maturity shown under current liabilities (384,195,136) (415,071,353)
Less: Mark up accrued shown under current liabilities (96,991,545) (26,239,494)
5,428,141,420 1,809,092,279
7.1 This represents long-term finance facilities obtained from financial institutions carrying mark-up at the rate of 3 months KIBOR
plus 125 bps per annum repayable in equal monthly and quarterly instalments over a period of 5 to 6 years including 1 year grace
period. These facilities are secured against first joint pari passu charge and mortgage charge (equitable) over present and future
fixed assets of the Company.

7.2 This represents loan obtained under Refinance Scheme for Payment of Wages and Salaries to Workers and Employees of Business
Concerns (the Scheme) offered by State Bank of Pakistan to mitigate the effect of COVID-19 on employment in Pakistan. The
loan carries mark-up at SBP rate plus 100 bps to 200 bps per annum and repayable in 8 equal quaterly instalments starting from
January 2021. This facility is secured against first joint pari passu charge over fixed assets of the Company. The loan was initially
recognized at fair value in accordance with IFRS 9 - Financial instruments using effective interest rate of 3-month KIBOR plus
spread. The difference between fair value of loan and loan proceeds has been recognized as deferred grant as per requirements
of IAS 20 (Accounting for Government grants and disclosure of Government assistance) and as per Circular 11/2020 issued by the
Institute of Chartered Accountants of Pakistan.

7.3 These represent the loans obtained under the Temporary Economic Refinance Facility offered by the State Bank of Pakistan (the
“SBP TERF”) for setting up imported and locally manufactured plants and machinery for new projects. The loans carry mark-up
at the rate of 2.02% per annum repayable in equal quarterly installments over a period of 10 years including 2 years grace period.
These facilities are secured against first joint pari passu charge over all present and future fixed assets of the Company. The loan
was initially recognized at fair value in accordance with IFRS 9 - Financial instruments using an effective interest rate of three (3)
month KIBOR plus spread respectively. The difference between the fair value of the loan and loan proceeds has been recognized
as deferred income as per requirements of IAS 20 (Accounting for Government grants and disclosure of Government assistance).

7.4 This represents unsecured loan obtained from ex-director / sponsors of Nimir Resins Limited acquired as a result of winding of
Nimir Holding (Private) Limited in the prior years. This loan is interest free and repayable on demand, however, the lender has
agreed not to demand repayment for a period of next twelve months.

8 LEASE LIABILITIES 2022 2021

Rupees Rupees
Present value of lease rentals 110,410,093 116,691,049
Less: Current portion shown under current liabilities (38,670,693) (29,099,326)
71,739,400 87,591,723

Set out below are the carrying amounts of lease liabilities and the movements during the year:

As at 01 July 116,691,049 140,124,138

Additions 31,403,000 17,773,000
Accretion of interest 10,500,509 13,088,046
Payments (48,184,465) (54,294,135)
As at 30 June 110,410,093 116,691,049

Annual Report 2022 45

Notes to the Financial Statements - Separate
FOR THE YEAR ENDED JUNE 30, 2022

Salient features of the leases are as follows: 2022 2021

Rupees Rupees
Discounting rate 8.68% to 12.86 % 7.32% - 12.16%
Period of lease 60 months 60 months
8.1 Amount recognized in statement of profit or loss:
The following are the amounts recognized in profit or loss:

Short term lease 7,271,820 9,091,798

Interest expense on lease liabilities 10,500,509 13,088,046
17,772,329 22,179,844
8.2 Cash outflow for leases
The Company had total cash outflows for leases of Rs. 48.18 million (2021: Rs. 54.29 million ). The Company also had non-cash
additions to right-of-use assets and lease liabilities of Rs. 31.40 million (2021: Rs. 17.77 million).
8.3 The maturity analysis of lease liability has been disclosed in note 39.2.

9 NET DEFINED BENEFIT LIABILITY - FUNDED GRATUITY 2022 2021

Note
Rupees Rupees
Staff retirement benefits - gratuity 9.1 151,982,862 128,418,646
9.1 The amounts recognized in the statement of financial position are as follows:

Present value of defined benefits obligation 9.5 195,554,240 151,222,142

Less: Fair value of plan assets 9.6 (43,571,378) (22,803,496)
151,982,862 128,418,646
9.2 The amounts recognized in the statement of profit or loss are as follows:

2022 2021
Note
Rupees Rupees
Current service cost 18,150,925 15,861,627
Interest cost on defined benefit obligation - net 12,766,864 8,630,646
Expense recognized in the statement of profit or loss 9.3 30,917,789 24,492,273
9.3 The charge for the year has been allocated is as follows:

Cost of sales 30.2 19,448,865 14,852,348

Distribution costs 31.1 2,165,933 3,384,193
Administrative expenses 32.1 9,302,991 6,255,732
30,917,789 24,492,273

9.4 Movements in the net liability recognized as follows: 2022 2021

Rupees Rupees
Net liabilities at the beginning of the year 128,418,646 97,246,058
Current service cost 18,150,925 15,861,627
Interest cost on defined benefit obligation 12,766,864 8,630,646
Contribution by employer (21,000,000) (2,700,000)
Remeasurements charged to other comprehensive income 13,646,427 9,380,315
Net liabilities at the end of the year 151,982,862 128,418,646

46 Nimir Industrial Chemicals Ltd.

 9.5 Movements in the present value of defined benefit obligation: 2022 2021
Note
Rupees Rupees
Present value of defined benefits obligation at the beginning of the year 151,222,142 117,676,686
Current service cost 18,150,925 15,861,627
Interest cost on defined benefit obligation 15,047,214 10,404,950
Benefits paid (1,000,000) (4,132,270)
Remeasurement:
Experience adjustments 12,133,959 11,411,149
Present value of defined benefits obligation at the end of the year 195,554,240 151,222,142
9.6 Movements in the fair value of plan assets:
Fair value of plan assets at the beginning of the year 22,803,496 20,430,628
Contribution by employer 21,000,000 2,700,000
Interest income 2,280,350 1,774,304
Benefits paid (1,000,000) (4,132,270)
Return on plan assets excluding interest income (1,512,468) 2,030,834
Fair value of plan assets at the end of year 43,571,378 22,803,496
9.7 Components of plan assets
Mutual funds units 23,318,258 22,658,049
Cash and cash equivalents 20,253,120 145,447
43,571,378 22,803,496
9.8 Estimated expense to be charged to statement of profit or loss in next year

Current service cost 18,150,925

Interest cost on defined benefit obligation - (net) 12,766,864
Amount chargeable to profit or loss 30,917,789
9.9 Expected future costs

Estimated contribution to the fund in next year 20,000,000

9.10 Significant assumptions
Qualified actuaries have carried out the valuation as at 30 June 2022. The projected unit credit method, based on the following
significant assumptions, is used for valuation of the plan:
2022 2021
Discount rate for obligation 13.25% 10.00%
Expected rates of salary increase in future years 12.25% 9.00%
Retirement assumption Age 60 Age 60
9.11 Maturity profile of the defined benefit obligation:
The Company expects to contribute to the gratuity fund on the advice of the fund’s actuary. The contributions are equal to the
current service cost with adjustment for any deficit.

Projected payments (undiscounted) 2022 2021

Rupees Rupees
Year 1 12,109,255 8,267,430
Year 2 15,217,582 9,460,524
Year 3 18,524,063 11,579,320
Year 4 21,227,254 15,498,624
Year 5 25,792,816 17,485,484
Year 6 to Year 10 174,810,297 142,329,682

Annual Report 2022 47

Notes to the Financial Statements - Separate
FOR THE YEAR ENDED JUNE 30, 2022

9.12 Sensitivity analysis:

A quantitative sensitivity analysis for significant assumption on defined benefit obligation is as shown below:

Defined benefit
Sensitivity level Assumption obligation
+100 bps Discount rate 156,791,684
-100 bps Discount rate 187,545,977
+100 bps Expected increase in salary 187,550,585
-100 bps Expected increase in salary 156,793,610

The sensitivity analyses above have been determined based on a method that extrapolates the impact on defined benefit obligation
as a result of reasonable changes in key assumptions occurring at the end of the reporting period.

The average duration of the defined benefit plan obligation at the end of the reporting period is 9 years.

10 DEFFERED TAX LIABILITY 2022 2021

Note
This comprises of: Rupees Rupees
Deferred tax liabilities on taxable temporary differences
Accelerated tax depreciation 486,943,520 361,719,493
Deferred tax assets on deductible temporary differences
Capital work-in-progress - impairment (20,336,700) (18,375,856)
Allowance for expected credit losses (7,023,781) (12,201,852)
Provision for obsolescence of stores (3,570,690) (4,104,947)
Deferred and unpaid liabilities (15,692,404) (11,189,082)
Others - (1,251,830)
440,319,945 314,595,926
Reconciliation of deferred tax liabilities - net
As of 1 July 314,595,926 376,091,088
Tax expense recognized in statement of profit or loss 36 130,227,340 (58,774,871)
Tax income recognized in OCI (4,503,321) (2,720,291)
As at 30 June 440,319,945 314,595,926

11 DEFERRED GRANT

This represents deferred grant recognized on loans received at below market interest rate under SBP refinance scheme for payment of
wages and salaries to the workers and employees of business concerns (as explained in Note 7.2) and under SBP temporary economic
refinance facility for imported and locally manufactured new plant and machinery to be used for setting up of new projects

2022 2021
Note
Rupees Rupees
Movement during the year is as follows:
Balance as at 01 July 9,112,437 -
Amount recognized as deferred grant during the year 1,211,564,627 20,507,994
Amortization during the year
- Charged to other income (14,670,974) (11,395,557)
- Charged to CWIP (124,095,355) -
1,081,910,735 9,112,437
Less: Current maturity of deferred grant (168,378,206) (7,685,720)
Balance as at 30 June 913,532,529 1,426,717

48 Nimir Industrial Chemicals Ltd.

12 TRADE AND OTHER PAYABLES 2022 2021
Note
Rupees Rupees
Creditors 12.1 1,291,066,234 610,562,657
Accrued liabilities 12.2 477,796,373 709,829,931
Security deposits 12.3 400,000 400,000
Workers' profit participation fund 12.4 132,515,713 129,340,589
Workers' welfare fund 12.5 44,321,886 53,766,492
Withholding tax payable 609,734 581,175
Others 33,542,755 29,460,963
1,980,252,695 1,533,941,807
12.1 Creditors include amount payable to Nimir Resins Limited (subsidiary company) amounting to Rs. 2,195,529 (2021: Nil) and Nimir
Chemcoats Limited (associated company) amounting to Rs. 38,001 (2021: 350,384) on account of purchase of raw materials..

12.2 This includes modified liability of Government Infrastructure Development Cess payable amounting to Rs. 148,392,947 recognized
at fair value using effective interest rate method as per the the requirements of “Guidance on Accounting of GIDC” issued by the
Institute of Chartered Accountants of Pakistan (ICAP) in January 2021. Movement during the year is as follows:

2022 2021
Note
Rupees Rupees
Balance as at 01 July 144,222,846 147,160,704
Gain on extinguishment of original GIDC liability 34 - (10,162,332)
Finance cost 35 4,170,101 7,224,474
Balance as at 30 June 148,392,947 144,222,846
12.3 These represent security deposits from distributors which, by virtue of agreement, are interest free, repayable on demand and are
used in the normal course of business in accordance with section 217 of Companies Act, 2017.

12.4 Workers’ profit participation fund 2022 2021

Note
Rupees Rupees
Balance as at 01 July 129,340,589 72,349,420
Add: Provision for the year 33 132,515,713 129,340,589
Less: Payments made during the year (129,340,589) (72,349,420)
132,515,713 129,340,589
12.5 Workers’ welfare fund
Balance as at 01 July 53,766,492 25,253,558
Add: Provision for the year 33 43,101,394 53,549,401
Less: Payments made during the year (52,546,000) (25,036,467)
Balance as at 30 June 44,321,886 53,766,492
13 CONTRACT LIABILITIES

13.1 This represents advance consideration received from customers in ordinary course of business. No amounts have been received
from related parties (2021: Nil).

13.2 Revenue recognized in the reporting period that was included in the contract liabilities balance at the beginning of the period
amounts to Rs. 136,733,485 (2021: Rs. 107,451,311).

14 SHORT-TERM BORROWINGS - SECURED 2022 2021

Rupees Rupees
Running finance 1,700,453,957 475,530,793
Local bills discounting 728,001,210 200,000,000
Finance against trust receipts 10,612,072,731 5,193,527,319
13,040,527,898 5,869,058,112

Annual Report 2022 49

Notes to the Financial Statements - Separate
FOR THE YEAR ENDED JUNE 30, 2022

The aggregate of short term finance facilities available from various financial institutions (including commercial banks) at year end is
Rs.18,450 million (2021: Rs.10,049 million) which includes running finance facilities amounting Rs. 2,600 million (2021: Rs.1,350 million).
The rate of mark up ranges from 1 month KIBOR to 6 months KIBOR + 0 to 75 bps with no floor and no cap (2021: 1 month KIBOR to 6
months KIBOR + 0 to 75 bps with no floor and no cap). The facilities are secured against joint pari passu charge on the present and future
current assets of the Company.

The unutilized facility for opening letters of credit and bank guarantees as at 30 June 2022 amounts to Rs. 1,370 million (2021: Rs. 2,260
million) and Rs.13 million (2021: Rs. 50 million) respectively.

15 CONTINGENCIES AND COMMITMENTS

15.1 CONTINGENCIES

‘Pending the outcome of below cases, no provision has been made in the financial statements, since the management of the
Company based on its consultants’ opinion, is confident that the outcome of the appeals will be in favor of the Company. The
aggregate exposure of the following cases amounts to Rs. 249.7 million.

15.1.1 The income tax authority amended the Company’s assessment relating to tax year 2009 under section 122 (5A) of the Ordinance,
disallowing certain expenses thereby reducing declared loss from Rs. 167 million to Rs. 65 million (consequent tax exposure Rs.
35.7 million). The Company filed an appeal before the Commissioner Inland Revenue (Appeals), who upheld the order on major
additions vide Order dated 23 April 2018. The Company has filed second appeal before the ATIR dated 21 May 2018, which is
pending adjudication.

15.1.2 The income tax authority raised a tax demand of Rs. 206 million by treating the remission of loan as taxable income of Rs. 711
million for the Tax Year 2011 which was challenged at Appellate Tribunal Inland Revenue (ATIR). The ATIR decided the case in favor
of the Company vide Order dated 2 December 2013. The Income Tax Department has filed an appeal in February 2014 before the
Honorable Lahore High Court against the ATIR’s decision. During the year, the Honorable Lahore High Court remanded back the
case to ATIR for fresh hearing. The Company has filed an appeal before the Supreme court against the Lahore High Court decision
which is pending adjudication.

15.1.3 The income tax authority amended the Company’s assessment relating to Tax Year 2016 under section 161 / 205 of the Income
Tax Ordinance, 2001 (the Ordinance) raised a demand of Rs. 8 million vide Order dated 15 May 2017. The Company filed an
appeal before Commissioner Inland Revenue (Appeals), who upheld the said order. The Company filed second appeal before the
Appellate Tribunal Inland Revenue (ATIR) who decided the case in favor of the Company vide Order dated 22 January 2018. The tax
authority has filed a reference dated 11 June 2018 before the Lahore High Court against the decision of the ATIR which is pending
adjudication.

15.2 COMMITMENTS

Commitments in respect of letters of credit and letters of guarantee as at 30 June are as follows:

2022 2021
Rupees Rupees
Letters of credit established for the import of raw materials, spare parts and machinery 3,721 million 5,048 million
Letter of guarantee issued by financial institution in favor of SNGPL 133 million 96 million
Letter of guarantee issued by financial institution in favor of PSO 59 million 59 million
Letter of guarantee issued by financial institution in favor of Total PARCO 5 million 5 million

16 PROPERTY, PLANT AND EQUIPMENT

2022 2021
Note
Rupees Rupees
Operating fixed assets 16.1 5,437,069,000 3,649,868,606
Capital work-in-progress 16.3 6,872,123,553 1,894,221,844
12,309,192,553 5,544,090,450

50 Nimir Industrial Chemicals Ltd.

 16.1 Operating fixed assets
2022
C O S T D E P R E C I A T I O N Net book value
Accumulated Accumulated
As At Additions / Transfer/ As At Rate Charge for the Transfer/ As at
PARTICULARS Disposals as at 01 July Disposals as at
01 July 2021 Transfers* Adjustment 30 June 2022 % year Adjustment 30 June 2022
2021 30 June 2022
Rupees Rupees Rupees
OWNED
Free-hold land 411,951,255 163,238,546 - 575,189,801 - - - - - - 575,189,801
Building on free-hold land 633,890,991 450,725,731* (213,480) 84,103 1,084,487,345 4-5 209,292,520 48,640,608 (211,469) 50,445 257,772,104 826,715,241
Plant and machinery 4,581,895,784 1,571,292,684* (24,244,751) 50,343,614 6,179,287,331 4-50 2,018,126,442 346,875,164 (4,527,847) 23,979,418 2,384,453,177 3,794,834,154
Furniture and fittings 7,096,462 700,437 (163,499) - 7,633,400 10-33 4,785,308 949,574 (125,930) - 5,608,952 2,024,448
Office and factory equipment 236,701,799 83,953,128 (2,621,790) - 318,033,137 10-50 112,441,466 77,866,214 (2,598,764) - 187,708,916 130,324,221
Vehicles 57,240,361 20,662,850 (164,900) 34,203,500 111,941,811 20 45,025,435 5,708,471 (138,945) 34,229,996 84,824,957 27,116,854
5,928,776,652 2,290,573,376 (27,408,420) 84,631,217 8,276,572,825 2,389,671,171 480,040,031 (7,602,955) 58,259,859 2,920,368,106 5,356,204,719
RIGHT-OF-USE
Vehicles 102,679,306 29,551,725 - (34,203,500) 98,027,531 20 62,029,964 17,182,511 - (34,229,996) 44,982,479 53,045,052
Plant and machinery 50,427,717 - - (50,427,717) - 4-50 24,029,863 - - (24,029,863) - -
Building - lease-hold 74,274,371 - - - 74,274,371 20-25 30,558,442 15,896,700 - - 46,455,142 27,819,229
227,381,394 29,551,725 - (84,631,217) 172,301,902 116,618,269 33,079,211 - (58,259,859) 91,437,621 80,864,281
2022 6,156,158,046 2,320,125,101 (27,408,420) - 8,448,874,727 2,506,289,440 513,119,242 (7,602,955) - 3,011,805,727 5,437,069,000
2021
C O S T D E P R E C I A T I O N Net book value
Accumulated Accumulated
As At Additions / Transfer/ As At Rate Charge for the Transfer/ As at
PARTICULARS Disposals as at 01 July Disposals as at
01 July 2020 Transfers* Adjustment 30 June 2021 % year Adjustment 30 June 2021
2020 30 June 2021
Rupees Rupees Rupees
OWNED
Free hold land 240,346,660 171,604,595 - 411,951,255 - - - - - - 411,951,255
Building on free hold land 582,950,517 50,888,686* - 51,788 633,890,991 4-5 167,082,841 42,173,414 - 36,265 209,292,520 424,598,471
Plant and machinery 4,410,917,483 174,124,403 * (3,094,314) (51,788) 4,581,895,784 4-50 1,595,482,430 425,365,616 (2,685,339) (36,265) 2,018,126,442 2,563,769,342
Furniture and fittings 7,177,046 971,000 (1,051,584) - 7,096,462 10-33 4,880,309 956,521 (1,051,522) - 4,785,308 2,311,154
Office and factory equipment 159,485,472 87,487,682 (10,271,355) - 236,701,799 10-50 90030219 32352570 -9941323 - 112,441,466 124,260,333
Vehicles 51,769,324 5,742,727 (1,365,690) 1,094,000 57,240,361 20 37,296,984 8,081,441 (938,386) 585,396 45,025,435 12,214,926
5,452,646,502 490,819,093 (15,782,943) 1,094,000 5,928,776,652 1,894,772,783 508,929,562 (14,616,570) 585,396 2,389,671,171 3,539,105,481
RIGHT-OF-USE
Vehicles 94,014,751 9,758,555 - (1,094,000) 102,679,306 20 44,224,809 18,390,551 - (585,396) 62,029,964 40,649,342
Plant and machinery 50,427,717 - - - 50,427,717 4-50 19,998,992 4,030,871 - - 24,029,863 26,397,854
Building - lease-hold 74,274,371 - - - 74,274,371 20-25 14,661,741 15,896,701 - - 30,558,442 43,715,929
218,716,839 9,758,555 - (1,094,000) 227,381,394 78,885,542 38,318,123 - (585,396) 116,618,269 110,763,125

Annual Report 2022

2021 5,671,363,341 500,577,648 (15,782,943) - 6,156,158,046 1,973,658,325 547,247,685 (14,616,570) - 2,506,289,440 3,649,868,606

51
* These represent capital expenditure transferred from capital work in progress.
Notes to the Financial Statements - Separate
FOR THE YEAR ENDED JUNE 30, 2022

16.2 Disposal of property, plant and equipment

Details of disposed assets which had a net book value of Rs. 500,000 or more, are as follows:

"Particulars of Accumulated "Net Book "Sale Gain / Mode of

Description Cost
buyer" Depreciation Value " Proceeds" (Loss) disposal

Rupee
Building on free-hold land Third party 213,480 (211,469) 2,011 5,000 2,989 Negotiation
Jublee General
Insurance
Plant and machinery Insurance 24,244,751 (4,527,847) 19,716,904 19,718,789 1,885
claim
Company Ltd.
Furniture and fittings Third party 163,499 (125,930) 37,569 8,900 (28,669) Negotiation
Office and factory equipment Third party 2,621,790 (2,598,764) 23,026 105,500 82,474 Negotiation
Vehicles Third party 164,900 (138,945) 25,955 525,000 499,045 Negotiation

2022 27,408,420 (7,602,955) 19,805,465 20,363,189 557,724

2021 15,782,943 (14,616,570) 1,166,373 1,642,299 475,926

16.2.1 There are fully depreciated assets, having cost of Rs. 724 million (2021: Rs. 323 million) that are still in use as at the reporting date.

16.2.2 Company’s immovable fixed assets are located at 14.8 km, Sheikhupura-Faisalabad Road, Mouza Bhikki, District Sheikhupura,
Pakistan, Plot No. 122, block B, Muslim Town, Lahore, Pakistan and Plot Nos. 14,14-A and 515-D, Block K, Johar Town, Lahore,
Pakistan having area of 68.9 acres, 2.5 kanals and 2.25 kanals respectively.

16.2.3 No assets were sold to the Chief Executive, Directors, Executives or shareholders holding more than 10% of total paid-up capital.

16.2.4 Depreciation for the year has been allocated as under:

2022 2021
Note
Rupees Rupees
Cost of sales 30 485,554,980 523,792,339
Distribution costs 31 4,151,687 5,242,788
Administrative expenses 32 23,412,575 18,212,558
513,119,242 547,247,685

16.3 Capital work-in-progress

2022 2021
Plant and
Building on
Note free-hold machinery - Others Total Total
land
Note 16.3.1
Rupees Rupees Rupees Rupees Rupees
Opening balance - 1,957,586,864 - 1,957,586,864 191,931,640
Additions during the year 450,725,731 6,529,520,649 19,673,744 6,999,920,124 1,990,668,313
450,725,731 8,487,107,513 19,673,744 8,957,506,988 2,182,599,953
Transferred to fixed assets (450,725,731) (1,571,292,684) - (2,022,018,415) (225,013,089)
- 6,915,814,829 19,673,744 6,935,488,573 1,957,586,864
Less: Accumulated impairment 16.3.2 - (63,365,020) - (63,365,020) (63,365,020)
16.3.3 - 6,852,449,809 19,673,744 6,872,123,553 1,894,221,844

52 Nimir Industrial Chemicals Ltd.

 16.3.1
Plant and machinery includes borrowing cost capitalized during the year amounting to Rs. 160,448,610 (2021: Rs. Rs. 22,669,749).
The expansion has been financed by term finance facilities from financial institutions described in note 7. The rate used to determine
the amount of borrowing costs eligible for capitalisation is three (3) month KIBOR plus 1% spread, reduced by the amortization of
relevant deferred grant.

16.3.2 This represents impairment charged against two steam turbines in prior years.

16.3.3 These include the major capital expenditure incurred on the following ongoing projects:

- Thermal power house

- Chlorine liquefaction plant

- Chlorinated paraffin wax plant

17 INTANGIBLES 2022 2021

Note
Rupees Rupees
Software and licenses
Cost:
As at 1 July 4,204,250 4,204,250
Additions during the year 32,280,721 -
As at 30 June 36,484,971 4,204,250
Accumulated amortization:
As at 1 July (4,204,250) (4,204,250)
Amortization during the year 32 (1,793,373) -
As at 30 June (5,997,623) (4,204,250)
Net book value 30,487,348 -
Rate of amortization 20%-33.33% 20%-33.33%

18 INVESTMENT IN SUBSIDIARIES

Investment in shares of Nimir Management (Private) Limited - cost 18.1 128,161,710 128,161,710
Investment in shares of Nimir Resins Limited - cost 18.2 74,222,759 74,222,759
202,384,469 202,384,469

18.1 This represents 1,281,612 (2021: 1,281,612) ordinary shares aggregating to 51% of total paid up capital of Nimir Management
(Private) Limited.

18.2 This represents 16,438.306 (2021: 32,876,612) ordinary shares of Rs. 10 (2021: Rs.5) each, aggregating to 11.63% of total paid up
capital of Nimir Resins Limited. NRL is a sub-subsidiary of the Company as 51% shares of NRL are held by the NMPL, accordingly
the Company exercises control over NRL.

19 LOAN TO SUBSIDIARY 2022 2021

Note
Rupees Rupees
Loan to Nimir Resins Limited - unsecured 19.1 14,512,000 14,512,000

19.1 This represents loan to subsidiary novated from ex-director of Nimir Resins Limited. This loan is interest free and repayable on
demand, however, the Company has agreed not to demand repayment for a period of next twelve months. This loan has not been
discounted to present value using the effective interest rate method as the effect of discounting is considered to be immaterial.

19.2 Maximum aggregate amount due from the subsidiary at the end of any month in the year was Rs. 14,512,000 (2021: Rs. 14,512,000).
No interest has been charged on the amounts due from associated undertakings.

Annual Report 2022 53

Notes to the Financial Statements - Separate
FOR THE YEAR ENDED JUNE 30, 2022

20 LONG-TERM DEPOSITS 2022 2021

Note
Rupees Rupees
Security deposits
Financial institutions (including banks) 17,514,330 19,856,130
Others 20.1 19,297,602 19,762,602
20.2 36,811,932 39,618,732

20.1 This includes deposit amounting to Rs. 12.24 million (2021: Rs. 12.24 million) given to electricity supply company for dedicated line.

20.2 These deposits have not been discounted to present value using the effective interest rate method as the effect of discounting is
considered to be immaterial.

21 STORES, SPARE PARTS AND LOOSE TOOLS 2022 2021

Note
Rupees Rupees
Stores, spare parts and loose tools
In hand 401,725,535 298,786,820
In transit 137,201,605 7,461,707
Less: Provision for slow moving items 21.1 (11,125,544) (14,154,991)
527,801,596 292,093,536

21.1 Movement in provision for slow moving items is as follows:

Opening balance 14,154,991 3,154,991

Charge for the year - 11,000,000
Reversal of provision 33 (3,029,447) -
Closing balance 34 11,125,544 14,154,991
22 STOCK-IN-TRADE

Raw and packing material

In hand 5,683,694,160 493,042,998
In transit 682,640,150 3,965,359,669
6,366,334,310 4,458,402,667
Finished goods 1,456,672,792 1,492,413,293
7,823,007,102 5,950,815,960

23 TRADE DEBTS

Considered good - unsecured

Due from customers 23.1 6,192,134,969 3,214,455,370
Due from associated companies 23.2 27,846,060 12,255,750
6,219,981,029 3,226,711,120
Considered doubtful 21,884,673 42,075,350
Allowance for expected credit losses 23.4 (21,884,673) (42,075,350)
- -
6,219,981,029 3,226,711,120

23.1 These customers have no recent history of default. For age analysis of these trade debts, refer to Note 38.1.1

23.2 Trade debts from Nimir Resins Limited (a subsidary company) amount to Rs. 26,939,825 (2021: Rs. 12,255,750) and Nimir
Chemicals Pakistan Limited (an associated company) amount to Rs 906,235 (2021: Nil).

54 Nimir Industrial Chemicals Ltd.

 23.3 Maximum aggregate amount due from Nimir Resins Limited at the end of any month in the year was Rs. 42,055,521 (2021: Rs.
45,050,581). No interest has been charged on the amounts due from associated undertakings.

2022 2021
Note
23.4 Movement in allowance for expected credit losses is as follows: Rupees Rupees
Opening balance 42,075,350 10,463,405
Charge for the year 33 - 32,292,905
Reversal for the year (20,190,677) -
Written off during the year - (680,960)
Closing balance 21,884,673 42,075,350
24 LOANS AND ADVANCES

Considered good - unsecured

Suppliers 82,014,918 54,941,329
Employees against business expenses 24.2 17,962,462 4,018,005
Employees against salary 24.3 5,466,286 6,140,666
105,443,666 65,100,000
24.1 Amount due from related parties is Rs. Nil (2021 Rs. Nil)

24.2 This includes advance given to executives amounting to Rs. 14.3 million (2021: Rs. 1.64 million). No amount has been given to CEO
or Directors.
24.3 This includes advance given to executives amounting to Rs. 2.03 million (2021: Rs. 2.87 million). No amount has been given to CEO
or Directors.

24.4 Loans and advances that are either past due or impaired amount to Rs. Nil (2021: Rs. Nil)

25 TRADE DEPOSITS AND SHORT-TERM PREPAYMENTS 2022 2021

Note
Rupees Rupees
Prepayments 19,912,251 11,060,556
26 OTHER RECEIVABLES

Margin against bank guarantee 16,000,000 16,000,000

Margin against LC 137,228,985 29,632,770
153,228,985 45,632,770
27 TAX REFUNDS DUE FROM THE GOVERNMENT

Income tax 1,228,324,846 813,370,625

Sales tax 27.1 1,197,085,513 5,166,633
2,425,410,359 818,537,258
27.1
This primarily includes input tax paid on acquisition of capital assets (2021: Nil)

28 CASH AND BANK BALANCES

Cash in hand 3,005,787 1,003,614

Cash at bank
Current accounts 214,346,914 57,073,216
Savings account 28.1 42,923,646 352,522
257,270,560 57,425,738
260,276,347 58,429,352

28.1
These carry mark-up rate at 6.5% - 11.5% (2021:5.5%) per annum.

Annual Report 2022 55

Notes to the Financial Statements - Separate
FOR THE YEAR ENDED JUNE 30, 2022

29 REVENUE FROM CONTRACTS WITH CUSTOMERS - NET 2022 2021

Note
Rupees Rupees
Set out below is the disaggregation of the Company’s revenue from contracts
with customers:
Manufacturing 38,383,453,998 26,474,867,480
Toll manufacturing 1,180,670,473 693,854,624
39,564,124,471 27,168,722,104
Less:
Sales tax (5,625,043,480) (3,956,667,448)
Trade discounts (66,491,749) (33,740,823)
Commission (86,941,461) (84,570,206)
(5,778,476,690) (4,074,978,477)
33,785,647,781 23,093,743,627
Local Sales 32,854,401,658 23,093,743,627
Export Sales 931,246,123 -
33,785,647,781 23,093,743,627
Geographical region:
Pakistan - South Asia 32,854,401,658 23,093,743,627
Export Sales - Middle East 748,197,822 -
Export Sales - -Central Asia 183,048,301 -
33,785,647,781 23,093,743,627
Timing of transfer of goods and services:
At a point in time 33,785,647,781 23,093,743,627

30 COST OF SALES
Raw and packing material consumed 30.1 26,741,904,361 18,445,766,949
Salaries, wages and benefits 30.2 623,256,620 518,806,051
Depreciation 16.2.4 485,554,980 523,792,339
Fuel and power 1,274,434,115 705,798,209
Stores, spare parts and loose tools consumed 145,726,863 141,532,517
Repairs and maintenance 38,484,821 99,375,229
Traveling, conveyance and entertainment 78,435,200 45,018,955
Communications 3,699,575 3,201,740
Insurance 38,652,240 21,147,884
Rent, rates and taxes 19,284,794 3,517,898
Printing and stationery 1,809,792 2,267,495
Dues, fees and subscription 4,127,199 3,693,668
Other expenses 4,132,686 2,706,670
29,459,503,246 20,516,625,604
Add: Opening stock-finished goods 22 1,492,413,293 525,796,909
Less: Closing stock-finished goods 22 (1,456,672,792) (1,492,413,293)
29,495,243,747 19,550,009,220

56 Nimir Industrial Chemicals Ltd.

 30.1 Raw and packing material consumed 2022 2021
Note
Rupees Rupees
Opening Balance 4,458,402,667 3,075,360,053
Purchases 28,649,836,004 19,828,809,563
33,108,238,671 22,904,169,616
Less: Closing Balance 22 (6,366,334,310) (4,458,402,667)
Raw and packing material consumed 30.3 26,741,904,361 18,445,766,949

30.2 This includes Rs. 19.5 million (2021: Rs. 14.9 million ) in respect of staff retirement benefits - gratuity scheme.

30.3 Cost of sales includes direct toll manufacturing expenses amounting to Rs. 599.8 million (2021: Rs. 269.4 million).

31 DISTRIBUTION COSTS 2022 2021

Note
Rupees Rupees
Salaries, wages and benefits 31.1 69,683,161 72,599,503
Depreciation 16.2.4 4,151,687 5,242,788
Repairs and maintenance 113,633 244,066
Traveling, conveyance and entertainment 8,142,768 2,347,840
Communications 1,687,639 399,792
Insurance 3,553,044 1,377,511
Printing and stationery 232,134 216,750
Freight outward 136,357,316 79,166,223
Packing, carriage and forwarding 600 47,650
Dues, fees and subscription 542,975 350,600
Other expenses 2,953,268 20,120,228
227,418,225 182,112,951

31.1 This includes Rs. 2.2 million (2021: Rs. 3.4 million) in respect of staff retirement benefits - gratuity scheme.

32 ADMINISTRATIVE EXPENSES 2022 2021

Note
Rupees Rupees
Salaries, wages and benefits 32.1 212,693,577 194,385,956
Depreciation 16.2.4 23,412,575 18,212,558
Amortization 17 1,793,374 -
Fuel and power 5,743,358 3,333,130
Repairs and maintenance 6,313,213 8,286,384
Traveling, conveyance and entertainment 30,573,132 17,237,156
Communications 14,484,625 8,374,561
Insurance 2,992,609 2,275,903
Rent, rates and taxes 7,432,720 5,764,358
Printing and stationery 4,445,049 3,428,145
Advertisement 3,023,993 1,773,664
Legal, professional and consultancy charge 14,690,652 11,703,863
Auditor's remuneration 32.2 2,804,000 2,804,000
Dues, fees and subscription 26,288,912 20,700,156
Other expenses 20,995,266 17,580,872
377,687,055 315,860,706
32.1 This includes Rs. 9.2 million (2021: Rs. 6.3 million) in respect of staff retirement benefits - gratuity scheme.

Annual Report 2022 57

Notes to the Financial Statements - Separate
FOR THE YEAR ENDED JUNE 30, 2022

32.2 Auditor's remuneration 2022 2021

Note
Rupees Rupees
Audit fee 1,800,000 1,800,000
Consolidation, reviews and certifications 954,000 954,000
Out of pocket expenses 50,000 50,000
2,804,000 2,804,000

33 OTHER EXPENSES

Workers' profit participation fund 12.4 132,515,713 129,340,589

Workers' welfare fund 12.5 43,101,394 53,549,401
Provision for slow moving stores and spares 21.1 (3,029,447) 11,000,000
Allowance for expected credit losses (20,190,677) 32,292,905
Foreign exchange (gain) / loss (7,324,530) 601,848
145,072,453 226,784,743
34 OTHER INCOME

Non financial assets

Gain on disposal of property, plant and equipment 557,724 475,926
Grant income 11 14,670,974 11,395,557
Gain on extinguishment of original GIDC liability 12.2 - 10,162,332
Scrap sales 34,257,762 18,273,499
Other income 1,062,468 459,669
Financial assets - amortized cost
Profit on savings account 1,895,023 926,500
52,443,951 41,693,483
35 FINANCE COST
Mark-up on
Long-term loans 35.1 125,616,090 95,340,934
Short-term borrowings 961,572,141 338,208,419
Financial charges on lease 10,500,509 13,088,046
Financial charges on GIDC unwinding 1,232,343 7,224,474
Bank charges, fee and commission 27,973,865 10,140,344
1,126,894,948 464,002,217

35.1 This includes financial charges on unwinding of term finance loan under refinance scheme for payroll financing (as explained in
Note 7) amounting to Rs. 8,899,477 (2021: Rs. 13,527,044) out of which Rs. 7,679,545 are due to the application of ‘IAS 20 -
Accounting for Government Grants and Disclosure of Government Assistance’.

36 TAXATION 2022 2021

Rupees Rupees
Current tax:
Current year 824,928,118 760,936,995
Prior year (85,010,508) 75,857
739,917,610 761,012,852
Deferred tax
Relating to the reversal and origination of temporary differences 130,227,340 (58,774,871)
870,144,950 702,237,981

58 Nimir Industrial Chemicals Ltd.

 36.1 Relationship between tax expenses and accounting profit 2022 2021
Rupees Rupees
Accounting profit before taxation 2,465,775,304 2,396,667,273
Tax at applicable tax rate of 29% (2021: 29%) 715,074,838 695,033,509
Effect of super tax 211,085,006 -
Effect of expenses not allowed for tax 35,810,903 7,128,615
Effect of tax on export sales under Final Tax Regime (6,815,289) -
Effect of prior years tax (85,010,508) 75,857
Tax expense for the year 870,144,950 702,237,981

37 EARNINGS PER ORDINARY SHARE - BASIC AND DILUTED

37.1 Basic
Profit attributable to ordinary shareholders (Rupees) 1,595,630,354 1,694,429,292
Weighted average number of ordinary shares (Number) 110,590,546 110,590,546
Earnings per ordinary share 14.43 15.32

37.2 Diluted

No figure for diluted earning per share has been presented as the Company has not issued any instrument carrying option which would
have an impact on earnings per share when exercised.

38 FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES

The main risks arising from the Company’s financial instruments are credit risk, liquidity risk, foreign currency risk, interest rate risk and
equity price risk. The management reviews and agrees policies for managing each of these risks which are summarized below.

38.1 Credit Risk

The main risks arising from the Company’s financial instruments are credit risk, liquidity risk, foreign currency risk, interest rate risk and
equity price risk. The management reviews and agrees policies for managing each of these risks which are summarized below.

Credit risk is the risk which arises with the possibility that one party to a financial instrument will fail to discharge its obligation and cause
the other party to incur a financial loss. The Company attempts to control credit risk by monitoring credit exposures, limiting transactions
with specific counterparties and continually assessing the creditworthiness of counterparties. The Company does not believe it is
exposed to major concentration of credit risk, however to manage any possible exposure the Company applies approved credit limits to
its customers.

The management monitors and limits the Company’s exposure to credit risk through monitoring of client’s credit exposure review and
conservative estimates of provisions for doubtful receivables, if any, and through the prudent use of collateral policy.

The Company is exposed to credit risk on loan to subisidiary, long-term deposits, trade debts, advances to employees against salary, other
receivables and bank balances. The Company seeks to minimize the credit risk exposure through having exposures only to customers
considered credit worthy and obtaining securities where applicable. The maximum exposure to credit risk at the reporting date is:

Carrying values
2022 2021
Rupees Rupees
Loan to subsidiary 14,512,000 14,512,000
Long-term deposits 19,297,602 19,762,602
Trade debts – unsecured 6,219,981,029 3,226,711,120
Loans and advances 5,466,286 6,140,666
Other receivables 153,228,985 45,632,770
Bank balances 257,270,560 57,425,738

Annual Report 2022 59

Notes to the Financial Statements - Separate
FOR THE YEAR ENDED JUNE 30, 2022

38.1.1 Trade Debts 2022 2021

Rupees Rupees
Other than related parties
Not yet due 5,495,656,356 2,488,701,128
Past due
1-30 days 550,766,978 466,735,343
31-60 days 87,918,908 110,296,694
61-90 days 34,684,609 157,030,544
Over 90 days 44,992,791 33,767,011
718,363,286 767,829,592
6,214,019,642 3,256,530,720
Related parties
Not yet due 27,846,060 12,255,750

An impairment analysis is performed at each reporting date using a provision matrix to measure expected credit losses. The provision
rates are based on days past due for groupings of various customer segments with similar loss patterns (i.e., by geographical region,
product type, customer type and rating). The calculation reflects the probability-weighted outcome, the time value of money and
reasonable and supportable information that is available at the reporting date about past events, current conditions and forecasts of
future economic conditions. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial
assets. The Company does not hold collateral as security. The letters of credit and other forms of credit insurance are considered integral
part of trade receivables and considered in the calculation of impairment.

Set out below is the information about the credit risk exposure on the Company’s trade debts using a provision matrix:

Not due 1-30 days 31-60 days 61-90 days Over 90 days Total
As at 30 June 2022
Expected credit loss rate 0.05% 0.37% 3.32% 5.34% 39.74%
Estimated total gross carrying
Estimated total gross carrying
amount 5,555,790,169 533,134,976 87,918,908 34,340,667 30,680,983 6,241,865,702
Expected credit loss 2,941,393 1,997,049 2,918,655 1,834,909 12,192,667 21,884,673
As at 30 June 2021
Expected credit loss rate 0.14% 0.32% 1.07% 8.13% 68.61%
Estimated total gross carrying
amount 2,500,956,878 466,735,343 110,296,694 157,030,544 33,767,011 3,268,786,470
Expected credit loss 3,485,738 1,485,362 1,176,893 12,761,011 23,166,345 42,075,350

As at 30 June 2022, trade debts of Rs. 21.9 million (2021: Rs. 42.1 million ) were impaired and provided for.

38.1.2 Bank balances

Credit risk from balances with banks and financial institutions is managed by the Company’s finance department in accordance with the
Company’s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each
counterparty. Counterparty credit limits are reviewed by the Company’s Board of Directors on an annual basis, and may be updated
throughout the year subject to approval of the Company’s Finance Committee. The limits are set to minimize the concentration of risks
and therefore mitigate financial loss through a counterparty’s potential failure to make payments.

60 Nimir Industrial Chemicals Ltd.

 Ratings 2022 2021
Financial institution
Agency Short-term Long-term Rupees Rupees
Albaraka Bank (Pakistan) Limited PACRA A-1 A+ 3,209,852 299,602
Askari Bank Limited PACRA A1+ AA+ 40,121 536,196
BankIslami Pakistan Limited PACRA A1 A+ 451,182 215,900
Habib Bank Limited JCR-VIS A1+ AAA 13,801,692 5,517,259
Meezan Bank Limited PACRA A1+ AA+ 3,600,000 2,804,620
MCB Bank Limited PACRA A1+ AAA 387,201 352,522
National Bank of Pakistan JCR-VIS A-1+ AAA 1,359,967 413,700
Industrial and Commercial Bank of China FITCH RATINGS A F1+ 7,559,537 770,345
Silk Bank Limited JCR-VIS A-2 A- 10,479 10,479
Standard Chartered Bank (Pakistan) Limited PACRA A1+ AAA 126,626,748 568,550
The Bank of Punjab PACRA A1+ AA+ 100,223,781 45,936,565
257,270,560 57,425,738

38.1.3 With respect to credit risk arising from other financial assets of the Company, including long-term deposits, loans and advances
and other receivables, the Company’s management assesses exposure to such risk to be minimal based on past experience and
is restricted to the carrying amount of those assets.

38.2 Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its commitments associated with financial liabilities when they fall
due. Liquidity requirements are monitored regularly and management ensures that sufficient liquid funds are available to meet any
commitments as they arise.

Financial liabilities are analyzed below, with regard to their remaining contractual maturities.

Maturity Up to Maturity After

Carrying Values Total
One Year One Year
As at 30 June 2022 Rupees
Long-term loans 5,812,336,556 384,195,136 5,428,141,420 5,812,336,556
Lease liabilities 110,410,093 38,670,693 71,739,400 110,410,093
Short-term borrowings 13,040,527,898 13,040,527,898 - 13,040,527,898
Mark up accrued 355,984,178 355,984,178 - 355,984,178
Unclaimed dividend 12,325,435 12,325,435 - 12,325,435
Trade and other payables 1,980,252,695 1,768,862,607 - 1,768,862,607
Total financial liabilities 21,311,836,855 15,600,565,947 5,499,880,820 21,100,446,767
As at 30 June 2021
Long-term loans 2,224,163,632 415,071,353 1,809,092,279 2,224,163,632
Lease liabilities 116,691,049 29,099,326 87,591,723 116,691,049
Short-term borrowings 5,869,058,112 5,869,058,112 - 5,869,058,112
Mark up accrued 99,355,733 99,355,733 - 99,355,733
Unclaimed dividend 10,766,577 10,766,577 - 10,766,577
Trade and other payables 1,320,392,588 1,320,392,588 - 1,320,392,588
Total financial liabilities 9,640,427,691 7,743,743,689 1,896,684,002 9,640,427,691

Annual Report 2022 61

Notes to the Financial Statements - Separate
FOR THE YEAR ENDED JUNE 30, 2022

Changes in liabilities arising from financing activities

As at As at 30 June
Cash flows New leases Others
1 July 2021 2022

Rupees
Long-term loans 2,224,163,632 5,068,561,181 - (1,087,469,272) 6,205,255,541
Lease Liability 116,691,049 (48,184,465) 31,403,000 10,500,509 110,410,093
Short-term borrowings 5,869,058,112 7,171,469,786 - - 13,040,527,898
Unclaimed dividend 10,766,577 (330,212,780) - 331,771,638 12,325,435
8,220,679,370 11,861,633,722 31,403,000 (745,197,125) 19,368,518,967

As at As at 30 June
Cash flows New leases Others
1 July 2020 2021

Rupees
Long-term loans 1,161,038,624 1,072,237,445 - (9,112,437) 2,224,163,632
Lease Liability 140,124,138 (54,335,235) 17,814,100 13,088,046 116,691,049
Short-term borrowings 3,387,284,677 2,481,773,435 - - 5,869,058,112
Unclaimed dividend 13,404,285 (389,704,619) - 387,066,911 10,766,577
4,701,851,724 3,109,971,026 17,814,100 391,042,520 8,220,679,370

38.3 Market Risk

38.3.1 Currency Risk

Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign
exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the foreign trade
payables. However at the year end, there are material foreign currency balances.

38.3.2 Interest Rate Risk

Interest rate risk arises from the possibility that changes in interest rate will affect the fair value or future cash flows of financial
instruments. The Company is exposed to interest rate risk for loans and borrowings obtained from the financial institutions and
liabilities against assets subject to finance lease, which have been disclosed in the relevant note to the financial statements.

If interest rates at the year end, fluctuate by 1% higher / lower, pre-tax profit for the year would have been Rs. 200.31 million
(2021: Rs. 69.4 million ) higher / lower. This analysis is prepared assuming that all other variables held constant and the amounts
of liabilities outstanding at reporting date were outstanding for the whole year.

38.4 Capital Management

The primary objective of the Company’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios
in order to support its business and maximize shareholders’ value. The Company manages its capital structure and makes adjustments to
it in the light of changes in economic conditions. Capital includes ordinary share capital and reserves, whereas, debt includes long-term
loans, short-term borrowings and liabilities against assets subject to finance lease. The gearing ratio of the Company is 75% (2021: 62%).

38.5 Fair value of financial assets and financial liabilities

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. As at the balance sheet date, carrying value of all the financial instruments in the financial
statements approximates their fair value. Further, all financial assets and financial liabilities at reporting date are categorized into amortized
cost.

62 Nimir Industrial Chemicals Ltd.

39 RELATIONSHIP AND TRANSACTIONS WITH RELATED PARTIES

The Company has interest based on common directorship and / or percentage of shareholding in following companies:

Percentage
Status of
Names of companies Basis of relationship of effective
relationship shareholding
Nimir Management (Private) Limited Shareholding Subsidiary company 51%
Nimir Resins Limited Shareholding and Common Directorship Sub-Subsidiary company 37.64%
Nimir Resources (Private) Limited Common Directorship Associated company Nil
Nimir Chemcoats Limited Common Directorship Associated company Nil
Nimir Chemicals Pakistan Limited Common Directorship Associated company Nil
Nimir Energy Limited Common Directorship Associated company Nil
Terranova (Private) Limited Common Directorship Associated company Nil
Extracts 4 Life (Private) Limited Common Directorship Associated company Nil

The related parties and associated undertakings comprise related group companies, directors and key management personnel.
Remuneration of Chief Executive, directors and executives is shown in note 40. The transactions with related parties are carried at
mutually agreed terms and are as follows:

Nature and Description of Related 2022 2021

Names of Company
Party Transaction Rupees Rupees
Nimir Resins Limited Purchase of goods 5,302,679 590,730
Sale of goods 198,427,950 169,292,570
Services provided 6,004,164 5,458,332
Services acquired 4,652,184 4,229,256
Reimbursement of expenses 598,633 350,416
Nimir Chemcoats Limited Purchase of goods 14,656,729 1,562,306
Nimir Chemicals Pakistan Limited* Sale of goods 11,422,560 -
Staff retirement benefits Contribution to gratuity fund 21,000,000 2,700,000

* The elections of directors were held in December 2021 and resultantly Nimir Chemicals Pakistan Limited became an associated
undertaking on the basis of common directorship.

40 REMUNERATION OF CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVES

Chief Executive Directors Executives

2022 2021 2022 2021 2022 2021
Number of persons 1 1 2 2 38 26
Rupees
Managerial remuneration 16,258,065 13,354,839 24,774,194 20,516,130 112,947,122 85,060,644
Housing 7,316,129 6,009,678 11,148,388 9,232,258 50,826,207 38,277,292
Utilities 1,625,806 1,335,483 2,477,418 2,051,612 11,294,709 8,506,064
Bonus 10,184,049 6,774,085 15,645,060 10,386,930 70,770,978 42,718,362
Gratuity - - - - 10,089,000 7,257,000
35,384,049 27,474,085 54,045,060 42,186,930 255,928,016 181,819,362

40.1 The Chief Executive Officer and Directors have been provided with company - maintained cars and generator sets, further they
are also entitled to club membership and reimbursement of medical and entertainment expenses whereas some executives have
been provided with company- maintained cars.

Annual Report 2022 63

Notes to the Financial Statements - Separate
FOR THE YEAR ENDED JUNE 30, 2022

40.2 An amount of Rs. 7,947,500 (2021: Rs. Rs. 5,275,000) was paid to non-executive directors for attending the board meetings.

41 TOTAL NUMBER OF EMPLOYEES 2022 2021

Number of employees as at 30 June 254 205
Average number of employees during the year 230 192

42 PRODUCTION CAPACITY IN METRIC TONS

2022 2022 2021 2021

Maximum Capacity Actual Production Maximum Capacity Actual Production
Oleo Chemicals (Metric ton)1 140,000 86,716 124,000 101,089
Chlor Alkali Products (Metric ton)2 79,000 50,446 52,000 50,479
Soap Finishing Line (Metric ton)3 54,000 38,106 54,000 37,766
Aerosol (Cans)4 80,000,000 8,540,775 31,363,200 1,970,244
Blending5 - 33,605 - 32,586

1 The plant capacity increased during the year. Actual production remained lower than last year due to market demand.
2 The plant was upgraded with latest technology in the last quarter of the financial year. The utiliztaion remained lower due to initial teething issues in the commissioning.
3 The plant capacity was underutilized due to product mix.
4 Another plant has been added for insect killer spray production in last quarter of the year. The market of both body sprays and insect killer is building gradually.
5 The plant capacity is indeterminable because it is a multi-product plant involving varying processes.

43 Corresponding figures
Corresponding figures have been re-arranged and re-classified, where necessary, for better and fair presentation. However no significant
reclassifications / restatements have been made, other than the following:

2021
Transferred from component Transferred to component
Rupees
Other expenses Cost of sales 7,254,515
Foreign exchange (gain) / loss Other expenses 601,848
Net defined benefit liability - funded gratuity - Current Net defined benefit liability - funded gratuity -
liabilities Non-Current liabilities 128,418,646
Running finance - Short term borrowings Local bill discounting - short term borrowing 200,000,000
44 SUBSEQUENT EVENTS
The Board of Directors at its meeting held on 27 September 2022 has proposed a final dividend @ Rs. 1.50 per share for the year ended
30 June 2022 (2021: Rs. 2.0) amounting to Rs. 165,885,819 (2021: Rs. 221,181,092) for approval of the members at the Annual General
Meeting to be held on 28 October 2022. These financial statements do not reflect this dividend.
45 GENERAL
Figures have been rounded off to nearest rupee unless otherwise stated.
46 DATE OF AUTHORIZATION FOR ISSUE
These financial statements were authorized for issue by the Board of Directors on 27 September 2022.

Chief Executive Officer Director Chief Financial Officer

64 Nimir Industrial Chemicals Ltd.

65 Financial Statements - Consolidated
FOR THE YEAR ENDED JUNE 30, 2022

66
67
69
74
Directors’ Report
Report on the Audit of the Financial Statements
Statement of Financial Position
Notes to the Consolidated Financial Statements

Annual Report 2022 65

 Directors’ Report
The Directors are pleased to present Consolidated Directors’ Report
together with the Group Financial Statements of Nimir Industrial
Chemicals Limited and its subsidiaries for the year ended June 30,
2022.

Since the world opened up in post covid scenario, Pakistan witnessed

an economic growth rate of 5.97% during the year under review.

The consolidated gross revenue of your Company grew by 43%

to reach at PKR. 49 billion during the year. Consequently, the
consolidated operating profit crossed PKR. 4.6 billion during the year;
which is 24% higher than last year. While, the net profit stood at
PKR. 2 billion, which is 4% down from last year due to high financial
cost and high taxation. The consolidated EPS rested at PKR. 15.76 as
compared to PKR 16.57 previous year.

During post balance sheet date, unprecedented flood in Pakistan has

played havoc with the people and the economy of Pakistan which
was recovering fast. The loss of crops, cattle and house including
the households is putting a lot of pressure on the economy. The loss
caused by flood is expected to considerably bring down the growth
rate.

The management is focused on the continuous growth in the sales.

However due to extraordinary high costs of feedstock , utilities and
finance cost, margins are bound to be squeezed during the coming
financial year.

We shall continue to capitalize all opportunities that come our way,

while remaining vigilant against any risk to stakeholders’ value, which
shall, as the precedent dictates and committed to perform its best to
continue increasing shareholders value, Insha’Allah.

For and on behalf of the Board

Zafar Mahmood Aamir Jamil

Chief Executive Officer Director

Lahore
September 27, 2022.

66 Nimir Industrial Chemicals Ltd.

Report on the Audit of the Financial Statements
FOR THE YEAR ENDED JUNE 30, 2022

Opinion Auditing (ISAs) as applicable in Pakistan. Our responsibilities under those

standards are further described in the Auditor’s Responsibilities for the
We have audited the annexed consolidated financial statements of Nimir
Audit of the Consolidated Financial Statements section of our report.
Industrial Chemicals Limited and its subsidiaries (the Group), which
We are independent of the Group in accordance with the International
comprise the consolidated statement of financial position as at 30 June
Ethics Standards Board for Accountants’ Code of Ethics for Professional
2022, and the consolidated statement of profit or loss, the consolidated
Accountants as adopted by the Institute of the Chartered Accountants of
statement of comprehensive income, the consolidated statement of
Pakistan (the Code), and we have fulfilled our other ethical responsibilities
changes in equity and the consolidated statement of cash flows for the
in accordance with the Code. We believe that the audit evidence we have
year then ended, and notes to the consolidated financial statements,
obtained is sufficient and appropriate to provide a basis for our opinion.
including a summary of significant accounting policies and other
explanatory information. Key Audit Matters
In our opinion, consolidated financial statements give a true and fair view Key audit matters are those matters that, in our professional judgment,
of the consolidated financial position of the Group as at 30 June 2021, were of most significance in our audit of the consolidated financial
and its consolidated financial performance and its consolidated cash flows statements of the current period. These matters were addressed in the
for the year then ended in accordance with the accounting and reporting context of our audit of the consolidated financial statements as a whole,
standards as applicable in Pakistan. and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
Basis for Opinion
Following are the Key audit matters:
We conducted our audit in accordance with International Standards on
Key audit matters How the matter was addressed in our audit
Revenue Recognition
As described in note 6.13 and note 30 to the accompanied consolidated Our audit procedures, amongst others, included the following:
financial statements, the Group generates revenue from several types
- Obtained an understanding of the Group’s processes and related
of products and services. During the year ended 30 June 2022, the
internal controls for revenue recognition and on a sample basis,
Group generated net revenue of Rs. 41.85 billion as compared to Rs.
tested the effectiveness of those controls, specifically in relation
29.20 billion during the previous year, which represents an increase of
to recognition of revenue and timing thereof;
approximately 43% as compared to last year.
- On a sample basis, reviewed sales transactions near the report-
The revenue recognition is identified as a Key Audit Matter due to ing date to assess whether transactions are recorded in relevant
revenue being one of the key performance indicators of the Group and accounting period;
raises the risk that revenue could be misstated to meet targets.
- Performed procedures to analyze the variation in price and quantity
sold during the year;
- Reconciled revenue recorded in the books of account on a sample
basis with underlying accounting records including dispatch and
delivery documents; and
- Assessed the adequacy of the related disclosures in accordance
with the applicable financial reporting standards and the Compa-
nies Act, 2017.
Information Other than the Financial Statements and Auditors’ the audit or otherwise appears to be materially misstated. If, based
Report Thereon on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that
Management is responsible for the other information. The other
fact. We have nothing to report in this regard.
information comprises the information included in the Annual Report,
but does not include the consolidated financial statements and our Responsibilities of Management and Board of Directors for the
auditors’ report thereon. Consolidated Financial Statements
Our opinion on the consolidated financial statements does not cover Management is responsible for the preparation and fair presentation of
the other information and we do not express any form of assurance the consolidated financial statements in accordance with accounting and
conclusion thereon. reporting standards as applicable in Pakistan and Companies Act, 2017
and for such internal control as management determines is necessary to
In connection with our audit of the consolidated financial statements,
enable the preparation of consolidated financial statements that are free
our responsibility is to read the other information and, in doing so,
from material misstatement, whether due to fraud or error.
consider whether the other information is materially inconsistent with
the consolidated financial statements or our knowledge obtained in In preparing the consolidated financial statements, management is

Annual Report 2022 67

Report on the Audit of the Financial Statements
FOR THE YEAR ENDED JUNE 30, 2022

responsible for assessing the Group’s ability to continue as a going underlying transactions and events in a manner that achieves fair
concern, disclosing, as applicable, matters related to going concern and presentation.
using the going concern basis of accounting unless management either
• Obtain sufficient appropriate audit evidence regarding the
intends to liquidate the Group or to cease operations, or has no realistic
financial information of the entities or business activities within
alternative but to do so.
the Group to express an opinion on the consolidated financial
The Board of Directors is responsible for overseeing the Group’s financial statements. We are responsible for the direction, supervision and
reporting process. performance of the group audit. We remain solely responsible for
our audit opinion.
Auditors’ Responsibilities for the Audit of the Consolidated
Financial Statements We communicate with the Board of Directors regarding, among other
matters, the planned scope and timing of the audit and significant audit
Our objectives are to obtain reasonable assurance about whether the
findings, including any significant deficiencies in internal control that we
consolidated financial statements as a whole are free from material
identify during our audit.
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 We also provide the Board of Directors with a statement that we have
assurance, but is not a guarantee that an audit conducted in accordance complied with relevant ethical requirements regarding independence,
with ISAs as applicable in Pakistan will always detect a material and to communicate with them all relationships and other matters that
misstatement when it exists. Misstatements can arise from fraud or may reasonably be thought to bear on our independence, and where
error and are considered material if, individually or in the aggregate, they applicable, related safeguards.
could reasonably be expected to influence the economic decisions of
From the matters communicated with the Board of Directors, we deter-
users taken on the basis of these consolidated financial statements.
mine those matters that were of most significance in the audit of the
As part of an audit in accordance with ISAs as applicable in Pakistan, consolidated financial statements of the current period and are therefore
we exercise professional judgment and maintain professional skepticism the key audit matters. We describe these matters in our auditor’s report
throughout the audit. We also: unless law or regulation precludes public disclosure about the matter
or when, in extremely rare circumstances, we determine that a matter
• Identify and assess the risks of material misstatement of the
should not be communicated in our report because the adverse con-
consolidated financial statements, whether due to fraud or error,
sequences of doing so would reasonably be expected to outweigh the
design and perform audit procedures responsive to those risks,
public interest benefits of such communication.
and obtain audit evidence that is sufficient and appropriate to
provide a basis for our opinion. The risk of not detecting a material The engagement partner on the audit resulting in this independent audi-
misstatement resulting from fraud is higher than for one resulting tors’ report is Muhammad Ahsan Shahzad.
from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit
in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the
reasonableness of accounting estimates and related disclosures
made by management.
• Conclude on the appropriateness of management’s use of the
going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related
to events or conditions that may cast significant doubt on the
Group’s ability to continue as a going concern. If we conclude
that a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures in
the 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 Lahore EY Ford Rhodes
consolidated financial statements, including the disclosures, and September 30, 2022 Chartered Accountants
whether the consolidated financial statements represent the UDIN: AR202210079nWA13pOxP

68 Nimir Industrial Chemicals Ltd.

Consolidated Statement of Financial Position
AS AT JUNE 30, 2022

2022 2021
Note
Rupees Rupees
EQUITY AND LIABILITIES
SHARE CAPITAL AND RESERVES
Authorized share capital
145,000,000 (2021: 145,000,000) Ordinary shares of Rs.10 each 1,450,000,000 1,450,000,000
Issued, subscribed and paid up capital 7 1,105,905,460 1,105,905,460
Unappropriated profits - revenue reserve 5,498,106,070 4,205,348,842
Non-controlling interest 8 1,253,269,339 914,534,835
7,857,280,869 6,225,789,137
NON CURRENT LIABILITIES
Long-term loans 9 5,662,585,683 1,991,834,024
Lease liabilities 10 107,507,404 117,179,979
Net defined benefit liability - funded gratuity 11 182,839,637 152,565,166
Diminishing musharaka finance 12 - 208,924
Deferred tax liability 13 454,210,695 333,032,483
Deferred grant 14 913,532,529 2,978,377
7,320,675,948 2,597,798,953
CURRENT LIABILITIES
Trade and other payables 15 2,297,268,902 2,283,256,976
Contract liabilities 16 139,231,891 154,037,188
Mark up accrued 412,132,129 115,729,031
Unclaimed dividend 12,618,254 11,059,396
Short-term borrowings 17 15,524,046,275 6,943,146,874
Current maturity of long-term loans 9 472,173,94 485,828,720
Current maturity of lease liabilities 10 45,273,681 33,723,604
Current maturity of diminishing musharaka finance 12 525,325 1,405,316
Current maturity of deferred grant 14 169,891,401 9,515,864
Provision for taxation 1,113,412,108 998,525,246
20,186.573.904 11,036,228,215
CONTINGENCIES AND COMMITMENTS 18
TOTAL EQUITY AND LIABILITIES 35,364,530,721 19,859,816,305
ASSETS
NON CURRENT ASSETS
Property, plant and equipment 19 13,024,172,260 6,155,045,731
Intangibles 20 30,487,348 -
Long-term deposits 21 63,148,402 61,523,255
13,117,808,010 6,216,568,986
CURRENT ASSETS
Stores, spare parts and loose tools 22 551,465,198 312,536,473
Stock-in-trade 23 10,110,344,068 7,418,002,481
Trade debts 24 8,194,810,479 4,577,919,649
Loans and advances 25 150,000,699 101,298,775
Trade deposits and short term prepayments 26 22,206,862 12,445,953
Other receivables 27 182,413,993 47,041,770
Tax refunds due from the Government 28 2,750,545,362 1,073,909,710
Cash and bank balances 29 284,936,050 100,092,508
22,246,722,711 13,643,247,319
TOTAL ASSETS 35,364,530,721 19,859,816,305
The annexed notes from 1 to 48 form an integral part of these consolidated financial statements.

Chief Executive Officer Director Chief Financial Officer

Annual Report 2022 69

Consolidated Statement of Profit or Loss
FOR THE YEAR ENDED JUNE 30, 2022

2022 2021
Note
Rupees Rupees
Revenue from contracts with customers - gross 49,113,399,389 34,403,829,522

Less: Sales tax, trade discounts and commission (7,260,101,725) (5,202,266,194)

Revenue from contracts with customers - net 30 41,853,297,664 29,201,563,328

Cost of sales 31 (36,481,415,400) (24,865,563,151)

Gross profit 5,371,882,264 4,336,000,177

Distribution costs 32 (315,896,814) (255,925,456)

Administrative expenses 33 (456,991,382) (383,105,825)

(772,888,196) (639,031,281)

Operating profit 4,598,994,068 3,696,968,896

Other expenses 34 (248,294,370) (271,432,789)

Other income 35 72,282,754 52,782,684

Finance cost 36 (1,340,661,083) (576,876,432)

Profit before taxation 3,082,321,369 2,901,442,359

Taxation 37 (1,110,754,338) (845,710,050)

Profit after taxation 1,971,567,031 2,055,732,309

Attributable to:
Equity holders of the parent 1,742,946,847 1,832,171,362
Non-controlling interests 228,620,184 223,560,947
1,971,567,031 2,055,732,309

Earnings per ordinary share - basic and diluted 38 15.76 16.57

The annexed notes from 1 to 48 form an integral part of these consolidated financial statements.

Chief Executive Officer Director Chief Financial Officer

70 Nimir Industrial Chemicals Ltd.

Consolidated Statement of Comprehensive Income
FOR THE YEAR ENDED JUNE 30, 2022

2022 2021
Note
Rupees Rupees
Profit after taxation A 1,971,567,031 2,055,732,309
Other comprehensive income
Items that will not be reclassified to profit or loss in subsequent periods:
Re-measurement losses on defined benefit plan 11.4 (12,393,524) (10,932,245)
Income tax effect 4,089,863 3,170,351
Re-measurement losses on defined benefit plan - net (8,303,661) (7,761,894)
Items that may be reclassified to profit or loss in subsequent periods - -
Other comprehensive loss for the year B (8,303,661) (7,761,894)
Total comprehensive income for the year A+B 1,963,263,370 2,047,970,415
Attributable to:
Equity holders of the parent 1,734,119,708 1,825,096,594
Non-controlling interests 229,143,662 222,873,821
1,963,263,370 2,047,970,415
The annexed notes from 1 to 48 form an integral part of these consolidated financial statements.

Consolidated Statement of Changes in Equity

FOR THE YEAR ENDED JUNE 30, 2022
Issued,
subscribed and Unappropriated Non-controlling
profits-Revenue Total
paid up share interest
reserve
capital
Rupees Rupees Rupees Rupees
Balance as on 1 July 2020 1,105,905,460 2,767,319,159 691,661,014 4,564,885,633
Profit after taxation - 1,832,171,362 223,560,947 2,055,732,309
Other comprehensive loss - (7,074,768) (687,126) (7,761,894)
Total comprehensive income for the year - 1,825,096,594 222,873,821 2,047,970,415
Final dividend for 2020 @ Rs.1.50 per share - (165,885,819) - (165,885,819)
Interim dividend for 2021 @ Rs. 2.00 per share - (221,181,092) - (221,181,092)

Balance as on 30 June 2021 1,105,905,460 4,205,348,842 914,534,835 6,225,789,137

Profit after taxation - 1,742,946,847 228,620,184 1,971,567,031
Other comprehensive loss - (8,827,139) 523,478 (8,303,661)
Total comprehensive income for the year - 1,734,119,708 229,143,662 1,963,263,370
Reclassification adjustment relating to reserves (Note 8.1) - (109,590,842) 109,590,842 -
Final dividend for 2021 @ Rs.2.00 per share - (221,181,092) - (221,181,092)
Interim dividend for 2022 @ Rs.1.00 per share - (110,590,546) - (110,590,546)

Balance as on 30 June 2022 1,105,905,460 5,498,106,070 1,253,269,339 7,857,280,869

The annexed notes from 1 to 48 form an integral part of these consolidated financial statements.

Chief Executive Officer Director Chief Financial Officer

Annual Report 2022 71

Consolidated Statement of Cash Flows
FOR THE YEAR ENDED JUNE 30, 2022

2022 2021
Note
Rupees Rupees
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before taxation 3,082,321,369 2,901,442,359
Adjustment for:
Depreciation 566,180,992 602,356,722
Amortization 1,793,373 331,736
Mark-up expense 1,310,472,336 560,772,514
Provision for obsolescence of stock 8,539,600 5,508,300
Provision for slow moving stores and spares (3,029,447) 11,000,000
Expected credit losses of trade debts 1,963,743 42,417,621
Provision for gratuity 39,688,067 32,778,739
Grant income (14,670,974) (11,569,245)
Gain on extingushment of original GIDC liability - (10,162,332)
Gain on disposal of property, plant and equipment (557,724) (493,225)
Exchange loss - unrealized 35,416,693 12,532,153
Workers' profit participation fund provision 165,123,430 156,341,594
Workers' welfare fund provision 56,144,481 64,349,803
2,167,064,570 1,466,164,380
Operating profit before working capital changes 5,249,385,939 4,367,606,739
(Increase) / decrease in current assets
Stores, spares parts and loose tools (235,899,278) (20,178,864)
Stock-in-trade (2,700,881,187) (2,561,479,371)
Trade debts (3,605,620,771) (1,695,761,889)
Loans and advances (48,701,924) 5,285,653
Trade deposits and short term prepayments (9,760,909) (7,420,706)
Other receivables (135,372,223) (24,137,043)
Tax refunds due from the Government (1,140,792,639) 68,386,658
(7,877,028,931) (4,235,305,562)
Increase in current liabilities
Trade and other payables 194,024 231,801,608
Contract liabilities (53,206,150) 25,402,948
(7,930,041,057) (3,978,101,006)
Cash (used in) / generated from operations (2,680,655,118) 389,505,733

Contribution to gratuity fund (21,807,120) (4,787,717)

Mark-up paid (987,665,412) (513,646,904)
Tax paid (1,406,442,414) (622,089,199)
Long-term deposits (1,625,147) (12,699,636)
Workers' profit participation fund paid (156,341,594) (82,432,204)
Workers' welfare fund paid (62,590,400) (29,325,883)
(2,636,472,087) (1,264,981,543)
Net cash flows used in operating activities (5,317,127,205) (875,475,810)

Balance carried forward (5,317,127,205) (875,475,810)

72 Nimir Industrial Chemicals Ltd.

Consolidated Statement of Cash Flows (Continued)
FOR THE YEAR ENDED JUNE 30, 2022

2022 2021
Rupees Rupees

Balance brought forward (5,317,127,205) (875,475,810)

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of property, plant and equipment - net (278,294,506) (277,801,237)

Additions in capital work in progress - net (7,129,760,058) (2,125,722,116)
Sale proceeds from disposal of property, plant and equipment 20,363,189 1,767,298
Additions in intagible asset (32,280,721) -

Net cash flows used in investing activities (7,419,972,096) (2,401,756,055)

CASH FLOWS FROM FINANCING ACTIVITIES

Long term loan obtained 5,218,561,181 1,360,269,464

Long term loan repaid (490,534,615) (151,984,662)
Dividend paid (330,212,780) (389,704,619)
Lease rentals repaid (55,681,429) (54,978,003)
Diminishing musharika paid (1,088,915) (2,093,360)
Short-term borrowings 8,594,681,518 2,490,924,708

Net cash flows generated from financing activities 12,935,724,960 3,252,433,528

Net increase / (decrease) in cash and cash equivalents 198,625,659 (24,798,337)

Cash and cash equivalents at the beginning of the year 86,310,391 124,890,845

Cash and cash equivalents at the end of the year 284,936,050 100,092,508

The annexed notes from 1 to 48 form an integral part of these consolidated financial statements.

Chief Executive Officer Director Chief Financial Officer

Annual Report 2022 73

Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED JUNE 30, 2022

1 THE GROUP AND ITS OPERATIONS

1.1 Nimir Industrial Chemicals Limited (“NICL”) is part of Nimir Group (“The Group”) which consist of:

Parent (Holding) Company

Nimir Industrial Chemicals Limited (“NICL”)

Subsidiary Companies

Nimir Management (Private) Limited (“NMPL”)

Nimir Resins Limited (“NRL”)

The shareholding of Nimir Group as at reporting date is as follows:

• The holding of NICL in NMPL: 51%

• The holding of NMPL in NRL: 51%
• The holding of NICL in NRL: 11.63%
• Effective holding of NICL in NRL: 37.64%
Nimir Industrial Chemicals Limited (‘the Holding Company’) was incorporated in Pakistan as a Public Limited Company and its shares are
listed on Pakistan Stock Exchange Limited. The Holding Company is engaged in manufacturing and sales of chemical products. Following
are the business units of the Holding Company along with their respective locations:

Business Unit Address

Registered office and plant 14.8 Km, Sheikhupura-Faisalabad Road, Mouza Bhikki, District Sheikhupura, Pakistan.
Head Office Nimir House, 12-B, New Muslim Town, Lahore, Pakistan.
Subsequent to the year end, the head office of the Company has been relocated to Plot No. 122, Block B, Muslim Town, Lahore.

Nimir Resins Limited was initially incorporated in Pakistan on 17 December 1964 as a private limited company under the Companies Act,
1913 (now the Companies Act, 2017) and was converted into public limited company on 19 August 1991 with the name of Nimir Resins
Limited. The name of the company was changed to Descon Chemicals Limited on 1 April 2010 when the company entered into a scheme
of arrangement for merger / amalgamation with Descon Chemicals (Private) Limited. Upon acquisition by Nimir Group as explained in
note 1.2, the name of the company changed to Nimir Resins Limited as per the approval of Securities and Exchange Commission of
Pakistan dated 18 April 2016. The shares of Nimir Resins Limited are quoted on Pakistan Stock Exchange Limited. The principal activity of
the company is to manufacture surface coating resins for paint industry, polyesters, and optical brightener for paper and textile industries
and textile auxiliaries for textile industry. Following are the business units of the company along with their respective locations:

Business Unit Address

Registered office and plant 1 14.5 Km, Lahore-Sheikhupura Road, Lahore, Pakistan.
Plant 2 14.8 Km, Sheikhupura-Faisalabad Road, Mouza Bhikki, District Sheikhupura, Pakistan.
1.2 As a result of adoption of International Financial Reporting Standard (IFRS) – 10 ‘Consolidated Financial Statements’, the Holding
Company assessed the control conclusion of its investment in Nimir Resins Limited (NRL) that although the Holding Company has
less than 50% shareholding in NRL, however, based on absolute size of the Holding Company’s shareholding, common directorship
and management, the Holding Company has the ability to exercise control over NRL as per the terms of IFRS-10. Henceforth, Nimir
Industrial Chemicals Limited (NICL) is deemed to be holding company of NRL.
2 STATEMENT OF COMPLIANCE

These financial statements have been prepared in accordance with the accounting and reporting standards as applicable in Pakistan. The
accounting and reporting standards applicable in Pakistan comprise of:

- International Financial Reporting Standards (IFRS Standards) issued by the International Accounting Standards Board (IASB) as
notified under 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 lFRS Standards, the provisions of and directives
issued under the Companies Act, 2017 have been followed.

74 Nimir Industrial Chemicals Ltd.

3 New standards, interpretations and amendments

3.1 New standards, interpretations and amendments applicable to the consolidated financial statements for the year
ended 30 June 2022

The accounting policies adopted are consistent with those of the previous financial year, except for the following new and
amended standards and interpretations effective for annual period beginning on 1 July 2021, as listed below. The Group has not
early-adopted any standard, interpretation or amendment that has been issued but is not yet effective except which is mentioned
below in Note 2.1.3 .
New Amendments

3.1.1 IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 - Interest Rate Benchmark Reforms - Phase 2 — (Amendments)

In August 2020, the IASB published Interest Rate Benchmark Reform – Phase 2, Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4
and IFRS 16. With publication of the phase two amendments, the IASB has completed its work in response to IBOR reform. The
amendments provide temporary reliefs which address the financial reporting effects when an interbank offered rate (IBOR) is
replaced with an alternative nearly risk-free interest rate (RFR).

The amendments include a practical expedient to require contractual changes, or changes to cash flows that are directly required
by the reform, to be treated as changes to a floating interest rate, equivalent to a movement in a market rate of interest. Inherent
in allowing the use of this practical expedient is the requirement that the transition from an IBOR benchmark rate to an RFR takes
place on an economically equivalent basis with no value transfer having occurred.

Any other changes made at the same time, such as a change in the credit spread or maturity date, are assessed. If they are
substantial, the instrument is derecognised. If they are not substantial, the updated effective interest rate (EIR) is used to
recalculate the carrying amount of the financial instrument, with any modification gain or loss recognised in profit or loss. The
practical expedient is also required for entities applying IFRS 4 that are using the exemption from IFRS 9 (and, therefore, apply IAS
39 Financial Instruments: Recognition and Measurement) and for IFRS 16 Leases, to lease modifications required by IBOR reform.

3.1.2 IFRS 16 Covid-19-Related Rent Concessions beyond 30 June 2021 – Amendment to IFRS 16

In March 2021, the Board amended the conditions of the practical expedient in IFRS 16 that provides relief to lessees from
applying the IFRS 16 guidance on lease modifications to rent concessions arising as a direct consequence of the covid-19
pandemic. As a practical expedient, a lessee may elect not to assess whether a covid-19 related rent concession from a lessor
is a lease modification. A lessee that makes this election accounts for any change in lease payments resulting from the covid-19
related rent concession the same way it would account for the change under IFRS 16, if the change were not a lease modification.
Following the amendment, the practical expedient now applies to rent concessions for which any reduction in lease payments
affects only payments originally due on or before 30 June 2022, provided the other conditions for applying the practical expedient
are met.

Lessees will apply the amendment retrospectively, recognising the cumulative effect of initially applying it as an adjustment to
the opening balance of retained earnings (or other component of equity, as appropriate) at the beginning of the annual reporting
period in which they first apply the amendment. In the reporting period in which a lessee first applies the 2021 amendment, the
lessee will not be required to disclose the information required by paragraph 28(f) of IAS 8.

The amendment to IFRS 16 will provide relief to lessees for accounting for rent concessions from lessors specifically arising from
the covid-19 pandemic. While lessees that elect to apply the practical expedient do not need to assess whether a concession
constitutes a modification, lessees still need to evaluate the appropriate accounting for each concession as the terms of the
concession granted may vary.

3.1.3 IAS 16 Property, plant and equipment: Proceeds before intended use — (Amendments)

In May 2020, the IASB issued Property, Plant and Equipment — Proceeds before Intended Use , which prohibits entities
from deducting from the cost of an item of property, plant and equipment (PP&E), any proceeds of the sale of items produced
while bringing that asset to the location and condition necessary for it to be capable of operating in the manner intended by
management. Instead, an entity recognises the proceeds from selling such items, and the costs of producing those items, in
profit or loss.

The amendment is effective for annual periods beginning on 1st January 2022 and must be applied retrospectively only to items
of property, plant and equipment made available for use on or after the beginning of the earliest period presented when the entity

Annual Report 2022 75

Notes to the Financial Statements - Consolidated
FOR THE YEAR ENDED JUNE 30, 2022

first applies the amendment. However, the Company has early adopted this amendment on July 1, 2021 retrospectively.

The adoption of above amendments applied for the first time in the period did not have any material impact on the financial
statements of the Company.

3.2 Standards, interpretation and amendments to approved accounting standards that are not yet effective

The following standards, amendments and interpretations with respect to the approved accounting standards as applicable in
Pakistan would be effective from the dates mentioned below against the respective standard or interpretation:

3.2.1 IFRS 3 Reference to conceptual framework — (Amendments)

In May 2020, the IASB issued Amendments to IFRS 3 Business Combinations - Reference to the Conceptual Framework. The
amendments are intended to replace a reference to a previous version of the IASB’s Conceptual Framework (the 1989 Framework)
with a reference to the current version issued in March 2018 (the Conceptual Framework) without significantly changing its
requirements.

The amendments add an exception to the recognition principle of IFRS 3 to avoid the issue of potential ‘day 2’ gains or losses
arising for liabilities and contingent liabilities that would be within the scope of IAS 37 Provisions, Contingent Liabilities and
Contingent Assets or IFRIC 21 Levies, if incurred separately. The exception requires entities to apply the criteria in IAS 37 or IFRIC
21, respectively, instead of the Conceptual Framework, to determine whether a present obligation exists at the acquisition date.
At the same time, the amendments add a new paragraph to IFRS 3 to clarify that contingent assets do not qualify for recognition
at the acquisition date.

The amendments are effective for annual periods beginning on 1st January 2022 and must be applied prospectively. Earlier
application is permitted if, at the same time or earlier, an entity also applies all of the amendments contained in the Amendments
to References to the Conceptual Framework in IFRS Standards (March 2018).

3.2.2 IAS 37 Onerous contracts - costs of fulfilling a contract — (Amendments)

In May 2020, the IASB issued amendments to IAS 37 to specify which costs an entity needs to include when assessing whether
a contract is onerous or loss-making.

The amendments apply a ‘directly related cost approach’. The costs that relate directly to a contract to provide goods or services
include both incremental costs (e.g., the costs of direct labour and materials) and an allocation of costs directly related to
contract activities. General and administrative costs do not relate directly to a contract and are excluded unless they are explicitly
chargeable to the counterparty under the contract.

The amendments are effective for annual periods beginning on 1st January 2022 and must be applied prospectively to contracts
for which the Company has not yet fulfilled all of its obligations at the beginning of the annual reporting period in which it first
applies the amendments (the date of initial application). Earlier application is permitted and must be disclosed.

3.2.3 AIP IFRS 1 First-time Adoption of International Financial Reporting Standards - Subsidiary as a first- time adopter

As part of its 2018-2020 annual improvements to IFRS standards process , the IASB issued ab amendment to IFRS 1 First-time
Adoption of International Financial Reporting Standards. The amendment permits a subsidiary that elects to apply paragraph
D16(a) of IFRS 1 to measure cumulative translation differences using the amounts reported in the parent’s consolidated financial
statements, based on the parent’s date of transition to IFRS, if no adjustments were made for consolidation procedures and
for the effects of the business combination in which the parent acquired the subsidiary. This amendment is also applied to an
associate or joint venture that elects to apply paragraph D16(a) of IFRS 1.

The amendment is effective for annual reporting periods beginning on or after 1 January 2022 with earlier application is permitted.

3.2.4 AIP IAS 41 Agriculture - Taxation in fair value measurements

As part of its 2018-2020 annual improvements to IFRS standards process the IASB issued amendment to IAS 41 Agriculture. The
amendment removes the requirement in paragraph 22 of IAS 41 that entities exclude cash flows for taxation when measuring the
fair value of assets within the scope of IAS 41.

An entity applies the amendment prospectively to fair value measurements on or after the beginning of the first annual reporting
period beginning on or after 1 January 2022 with earlier adoption permitted.

76 Nimir Industrial Chemicals Ltd.

 3.2.5 AIP IFRS 9 - Fees in the ’10 per cent’ test for derecognition of financial liabilities

As part of its 2018-2020 annual improvements to IFRS standards process the IASB issued amendment to IFRS 9.

The amendment clarifies the fees that an entity includes when assessing whether the terms of a new or modified financial liability
are substantially different from the terms of the original financial liability. These fees include only those paid or received between
the borrower and the lender, including fees paid or received by either the borrower or lender on the other’s behalf. An entity
applies the amendment to financial liabilities that are modified or exchanged on or after the beginning of the annual reporting
period in which the entity first applies the amendment.

The amendment is effective for annual reporting periods beginning on or after 1 January 2022 with earlier adoption permitted.
The Group will apply the amendments to financial liabilities that are modified or exchanged on or after the beginning of the annual
reporting period in which the entity first applies the amendment.

3.2.6 IAS 1 Classification of liabilities as current or non-current — (Amendments

“In January 2020, the IASB issued amendments to paragraphs 69 to 76 of IAS 1 to specify the requirements for classifying
liabilities as current or non-current. The amendments clarify:
- What is meant by a right to defer settlement
- That a right to defer must exist at the end of the reporting period
- That classification is unaffected by the likelihood that an entity will exercise its deferral right
- That only if an embedded derivative in a convertible liability is itself an equity instrument would the terms of a liability not
impact its classification”

The amendments are effective for annual reporting periods beginning on or after 1 January 2023 and must be applied
retrospectively. The Company is currently assessing the impact the amendments will have on current practice and whether
existing loan agreements may require renegotiation.

3.2.7 IAS 1 and IFRS Practice Statement 2 - Disclosure of Accounting Policies - (Amendments)

In February 2021, the IASB issued amendments to IAS 1 and IFRS Practice Statement 2 Making Materiality Judgements, in
which it provides guidance and examples to help entities apply materiality judgements to accounting policy disclosures. The
amendments aim to help entities provide accounting policy disclosures that are more useful by replacing the requirement for
entities to disclose their ‘significant’ accounting policies with a requirement to disclose their ‘material’ accounting policies and
adding guidance on how entities apply the concept of materiality in making decisions about accounting policy disclosures.

The amendments to IAS 1 are applicable for annual periods beginning on or after 1 January 2023 with earlier application permitted.
Since the amendments to the Practice Statement 2 provide non-mandatory guidance on the application of the definition of
material to accounting policy information, an effective date for these amendments is not necessary.

The Company expects that the adoption of the above improvements to the standards will have no material effect on the
Company’s financial statements, in the period of initial application.

3.2.8 IAS 8 - Definition of accounting estimates — (Amendments)

In February 2021, the IASB issued amendments to IAS 8, in which it introduces a definition of ‘accounting estimates’. The
amendments clarify the distinction between changes in accounting estimates and changes in accounting policies and the
correction of errors. Also, they clarify how entities use measurement techniques and inputs to develop accounting estimates.

The amendments are effective for annual reporting periods beginning on or after 1 January 2023 and apply to changes in
accounting policies and changes in accounting estimates that occur on or after the start of that period. Earlier application is
permitted as long as this fact is disclosed.

3.2.9 IFRS 10 & IAS 28 - Sale or Contribution of Assets between an Investor and its Associate or Joint - Venture –
(Amendment)

In December 2015, the IASB decided to defer the effective date of the amendments until such time as it has finalised any
amendments that result from its research project on the equity method. Early application of the amendments is still permitted.

The amendments address the conflict between IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates

Annual Report 2022 77

Notes to the Financial Statements - Consolidated
FOR THE YEAR ENDED JUNE 30, 2022

and Joint Ventures in dealing with the loss of control of a subsidiary that is sold or contributed to an associate or joint venture. The
amendments clarify that a full gain or loss is recognised when a transfer to an associate or joint venture involves a business as
defined in IFRS 3. Any gain or loss resulting from the sale or contribution of assets that does not constitute a business, however,
is recognised only to the extent of unrelated investors’ interests in the associate or joint venture.

The amendments must be applied prospectively. Early application is permitted and must be disclosed.

The Group expects that such improvements to the standards will not have any material impact on the Group’s consolidated
financial statements in the period of initial application.

In addition to the above standards and amendments, improvements to various accounting standards and conceptual framework
have also been issued by the IASB. Such improvements are generally effective for accounting periods beginning on or after 01
January 2022.

The Group expects that such improvements to the standards will not have any material impact on the Group’s consolidated
financial statements.

Further, following new standards have been issued by IASB which are yet to be notified by the SECP for the purpose of applicability
in Pakistan.

The Group expects that such improvements to the standards will not have any material impact on the Group’s consolidated
financial statements.

Further, following new standards have been issued by IASB which are yet to be notified by the SECP for the purpose of applicability
in Pakistan.

Effective date (annual periods

Standard or Interpretation
beginning on or after)
IFRS 1 First-time Adoption of International Financial Reporting Standard 1 July 2009
IFRS 17 Insurance Contracts 1 January 2023
The Group expects that above standards will not have any material impact on the Group’s consolidated financial statements.
4 BASIS OF PREPARATION
4.1 Basis of measurement
These consolidated financial statements have been prepared under the historical cost convention except for certain employee
benefits that are recognized on the basis mentioned in note 5.14 and other areas where measurement basis have been disclosed
in relevant notes.
These financial statements are the consolidated financial statements of the Group in which investment in subsidiaries is accounted
for on the basis of acquisition method. Standalone financial statements of the Holding Company and its subsidiaries are prepared
separately.
4.2 Basis of consolidation
The consolidated financial statements include the financial statement of the Holding Company and its subsidiary companies. The
Group uses the acquisition method of accounting to account for business combination. The consideration transferred is the fair
value of the assets transferred, the liabilities assumed and the equity interest issued by the Group, if any. The Group recognizes
any non-controlling interest in the acquiree at the non-controlling interest’s proportionate share of the identifiable net assets
of the acquiree. The financial statement of the Holding Company and its subsidiaries are prepared up to the same reporting
date using consistent accounting policy except as stated otherwise. Identifiable assets acquired and liabilities assumed in the
acquisition are measured initially at their fair value at the date of acquisition.
Goodwill is initially measured as the excess of the aggregate of the consideration transferred and the value of non- controlling
interest using proportionate share method over the net identifiable assets acquired and liabilities assumed. If this is less than the
fair value of the net asset of the subsidiary acquired, the difference is recognized in consolidated statement of profit or loss. After
initial recognition it is measured at carrying value i.e. at date of acquisition less any accumulated impairment.
The financial statements of subsidiaries have been consolidated on line by line basis. Intra Group balances, transactions, income
and expenses have been eliminated. Assets, liabilities, income and expense have been consolidated from the date the Group

78 Nimir Industrial Chemicals Ltd.

 acquired the control of the subsidiary till the control cease to exist. Unrealized gain or loss on intra group transactions are also
eliminated but unrealized losses are however recognized to the extent of impairment, if any.
4.3 Non-controlling interest
The Group applies a policy of treating transactions with non-controlling interests as transaction with parties external to the
Group. Disposals of non-controlling interests results in gain and losses for the Group that are recorded in the consolidated
statement of profit or loss.
4.4 Functional and presentation currency
These consolidated financial statements are presented in Pak Rupee, which is the Group’s functional currency.
5 USE OF ESTIMATES AND JUDGEMENTS
The preparation of financial statements in conformity with the accounting and reporting standards as applicable in Pakistan requires
management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and
liabilities, and the acGrouping disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates
could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant
risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below.
The Group based its assumptions and estimates on parameters available when the consolidated financial statements were prepared.
Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances
arising that are beyond the control of the Group. Such changes are reflected in the assumptions when they occur.
a) Useful lives, residual values and depreciation method of property, plant and equipment – Note 5.1
The Group reviews the useful lives and residual value of property, plant and equipment on a regular basis. Any change in estimates
in future years might affect the carrying amounts of the respective items of property, plant and equipment with a corresponding
effect on the depreciation charge.
b) Provision for expected credit losses of trade receivable – Note 5.6.1
The Group uses a provision matrix to calculate ECLs for trade receivables. The provision rates are based on days past due for
groupings of various customer segments that have similar loss patterns (i.e., by geography, product type, customer type and
rating, and coverage by letters of credit and other forms of credit insurance).
The provision matrix is initially based on the Group’s historical observed default rates. the Group will calibrate the matrix to adjust
the historical credit loss experience with forward-looking information. For instance, if forecast economic conditions (i.e., gross
domestic product) are expected to deteriorate over the next year which can lead to an increased number of defaults in the
manufacturing sector, the historical default rates are adjusted. At every reporting date, the historical observed default rates are
updated and changes in the forward-looking estimates are analysed.
The assessment of the correlation between historical observed default rates, forecast economic conditions and ECLs is a significant
estimate. The amount of ECLs is sensitive to changes in circumstances and of forecast economic conditions. the Group’s historical
credit loss experience and forecast of economic conditions may also not be representative of customer’s actual default in the
future.
c) Estimation of provision - Note 5.10
As the actual outflows can differ from estimates made for provisions due to changes in laws, regulations, public expectations,
technology, prices and conditions, and can take place many years in the future, the carrying amounts of provisions are reviewed
at each reporting date and adjusted to take account of such changes. Any adjustments to the amount of previously recognised
provision is recognised in the statement of profit or loss unless the provision was originally recognised as part of cost of an asset.
d) Staff retirement benefits - Note 5.14
Calculations in this respect require assumptions to be made of future outcomes, the principal ones being in respect of mortality
rate, withdrawal rate, increase in remuneration and the discount rate used to convert future cash flows to current values.
Calculations are sensitive to changes in the underlying assumptions.

Annual Report 2022 79

Notes to the Financial Statements - Consolidated
FOR THE YEAR ENDED JUNE 30, 2022

e) Provision for inventory obsolescence - Note 21 and 22

The Group reviews the carrying amount of stock in trade, stores and spares on an annual basis, and as appropriate, inventory is
written down to its net realizable value, or a provision is made for obsolescence if there is any change in the usage pattern and
physical form of related inventory. Net realizable value signifies the estimated selling price in the ordinary course of business, less
the estimated costs of completion and the estimated costs necessary to make the sale.
f) Taxation - Note 5.11
The Group takes into account the current income tax law and decisions taken by the taxation authorities. Instances where the
Group’s views differ from the views taken by the income tax department at the assessment stage and where the Group considers
that its view on items of material nature is in accordance with law, the amounts are shown as contingent liabilities.
The Group recognizes deferred tax assets, to the extent it is probable that taxable profits and tax liability, as applicable, will be
available against which the deductible temporary differences and tax credits can be utilized, based on its assessment of the
probability and sufficiency of future taxable profits, future reversals of existing taxable temporary differences and ongoing tax
planning strategies while also keeping in view the provisions of Income Tax Ordinance, 2001 related to adjustment / carry forward
of the underlying temporary differences and tax credits, in subsequent years.
g) Contingencies - Note 5.10
The Group reviews the status of all the legal cases on a regular basis. Based on the expected outcome and lawyers’ judgments,
appropriate disclosure or provision is made.
h) Impairment of non financial assets

The carrying amount of the Group’s assets are reviewed at each reporting date to determine whether there is any indication of
impairment loss. If any such indication exists, the recoverable amount is estimated in order to determine the extent of impairment
loss, if any.
6 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting policies applied are consistent with prior year except as stated otherwise.
6.1 Property, plant and equipment
Owned assets
Property, plant and equipment are stated at cost less accumulated depreciation and impairment, if any except land which is stated
at cost. Cost of property, plant and equipment consists of historical cost and directly attributable cost of bringing the assets to
their present location and condition.
Depreciation is calculated using the straight line method at rates disclosed in note 19.1 which are considered appropriate to write
off the cost of the assets over their useful lives.
Depreciation on additions is charged from the month in which an asset is acquired or capitalized while no depreciation is charged
for the month in which the asset is disposed off.
The carrying amounts of the Group’s assets are reviewed at each reporting date to determine whether there is any indication of
impairment. If any such indication exists, the carrying amounts of such assets are reviewed to assess whether they are recorded
in excess of their recoverable amount. Where carrying values exceed the respective recoverable amount, assets are written down
to their recoverable amounts and the resulting impairment is recognized in the income currently. The recoverable amount is the
higher of an asset’s fair value less cost to sell and value in use. Where an impairment loss is recognized, the depreciation charge
is adjusted for the future periods to allocate the asset’s revised carrying amount over its estimated useful life.
Subsequent costs are included in the asset’s carrying amount or recognized as separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured
reliably. All other repair and maintenance costs are charged to consolidated statement of profit or loss during the period in which
they are incurred.
An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected from
its use or disposal. The gain or loss on disposal or retirement of operating fixed asset represents the difference between the sale
proceeds and the carrying amount of the asset and is recognized as an income or expense in the period it relates.

80 Nimir Industrial Chemicals Ltd.

 The assets residual values and useful lives are reviewed at each financial year end, and adjusted if impact on depreciation is
significant.
Capital Work-in-Progress
These are stated at cost less impairment loss, if any, including capitalization of borrowing costs. It consists of expenditures
incurred in respect of fixed assets in the course of their construction and installation.
Leased Asset
a) Right-of-use assets
The Group recognizes 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 recognized, 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.
b) Lease liabilities - rented premises
In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement
date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of
lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying
amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments
(e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change
in the assessment of an option to purchase the underlying asset.
6.2 Intangibles
Intangibles acquired separately are measured on initial recognition at cost. Following initial recognition, intangibles are carried
at cost less any accumulated amortization and any accumulated impairment losses. The useful lives of intangibles are measured
to be finite. Intangibles with finite lives are amortized over the useful life and assessed for impairment whenever there is an
indication that the asset may be impaired. The amortization period and amortization method for an intangibles with a finite life is
reviewed at each financial period end. The amortization expense is recognized in consolidated statement of profit or loss in the
expense category consistent with the function of the intangibles.
Amortization on additions is charged from the month in which an asset is acquired or capitalized while no amortization is charged
for the month in which the asset is fully amortized.
6.3 Stock-in-trade, stores, spare parts and loose tools
Stock in trade, stores, spares and loose tools are valued at lower of cost or net realizable value except those in transit, which are
valued at invoice value including other charges, if any, incurred thereon. Basis of determining cost is as follows:

Raw and packing material - weighted average cost

Material in transit - cost
Work in process - cost
Finished goods - weighted average cost
Stores, spare parts and loose tools - weighted average cost

Obsolete items are carried at nil value. Provision for obsolete and slow moving inventory is based on management estimates of
usage in normal business operations. Net realizable value is determined on the basis of estimated selling price of the product in
the ordinary course of business less costs of completion and costs necessary to be incurred in order to make the sale.

6.4 Trade debts

Trade debts from local customers are stated at amortized cost less expected credit losses while foreign debtors are stated at
translated amount by applying exchange rate applicable on the reporting date less expected credit losses.

The Group has applied the simplified approach to measuring expected credit losses, which uses a lifetime expected loss allowance.
Refer to accounting policies of financial assets in note 5.6.1

Annual Report 2022 81

Notes to the Financial Statements - Consolidated
FOR THE YEAR ENDED JUNE 30, 2022

6.5 Cash and cash equivalents

Cash and cash equivalents are carried in the consolidated statement of financial position at cost.

For the purpose of consolidated statement of cash flows, cash and cash equivalents comprise of cheques in hand, cash and bank
balances.

6.6 Financial instruments - initial recognition and subsequent measurement

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.

6.6.1 Financial assets

Financial assets - initial recognition

Financial assets are classified, at initial recognition, and subsequently measured at amortized cost, fair value through other
comprehensive income (OCI), and fair value through profit or loss.

The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics
and the Group’s business model for managing them. With the exception of trade debts and bank balance that do not contain a
significant financing component or for which the Group has applied the practical expedient, the Group initially measures a financial
asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. Trade debts 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. Refer to the accounting policy in Revenue from contracts with customers.

In order for a financial asset to be classified and measured at amortized cost or fair value through OCI, it needs to give rise to cash
flows that are ‘solely payments of principal and interest (SPPI)’ on the principal amount outstanding.

This assessment is referred to as the SPPI test and is performed at an instrument level.

The Group’s business model for managing financial assets refers to how it manages its financial assets in order to generate cash
flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial
assets, or both.

Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in
the market place (regular way trades) are recognized on the trade date, i.e., the date that the Group commits to purchase or sell
the asset.

The Group’s financial assets include long-term deposits, trade debts, loans and advances, interest accrued, other receivables and
bank balances.
Financial assets - subsequent measurement
For purposes of subsequent measurement, financial assets are classified in four categories:
Financial assets at fair value through profit or loss
Financial assets at amortized cost (debt instruments)
Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon derecognition (equity
instruments)
Financial assets at fair value through OCI with recycling of cumulative gains and losses (debt instruments)

a) Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss include financial assets held for trading, financial assets designated upon initial
recognition at fair value through profit or loss, or financial assets mandatorily required to be measured at fair value. Financial
assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. Derivatives,
including separated embedded derivatives, are also classified as held for trading unless they are designated as effective hedging
instruments. Financial assets with cash flows that are not solely payments of principal and interest are classified and measured
at fair value through profit or loss, irrespective of the business model. Notwithstanding the criteria for debt instruments to be

82 Nimir Industrial Chemicals Ltd.

 classified at amortized cost or at fair value through OCI, as described above, debt instruments may be designated at fair value
through profit or loss on initial recognition if doing so eliminates, or significantly reduces, an accounting mismatch.

Financial assets at fair value through profit or loss are carried in the consolidated statement of financial position at fair value with
net changes in fair value recognized in the consolidated statement of profit or loss.

This category includes derivative instruments and listed equity investments which the Group had not irrevocably elected to
classify at fair value through OCI. Dividends on listed equity investments are also recognized as other income in the consolidated
statement of profit or loss when the right of payment has been established.

A derivative embedded in a hybrid contract, with a financial liability or non-financial host, is separated from the host and accounted
for as a separate derivative if: the economic characteristics and risks are not closely related to the host; a separate instrument with
the same terms as the embedded derivative would meet the definition of a derivative; and the hybrid contract is not measured at
fair value through profit or loss. Embedded derivatives are measured at fair value with changes in fair value recognized in profit or
loss. Reassessment only occurs if there is either a change in the terms of the contract that significantly modifies the cash flows
that would otherwise be required or a reclassification of a financial asset out of the fair value through profit or loss category.

A derivative embedded within a hybrid contract containing a financial asset host is not accounted for separately. The financial
asset host together with the embedded derivative is required to be classified in its entirety as a financial asset at fair value through
profit or loss.

The Group does not have financial assets at fair value through profit or loss.

b) Financial assets at amortized cost (debt instruments)

This category is the most relevant to the Group. The Group measures financial assets at amortized cost if both of the following
conditions are met:

• The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual
cash flows; 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

Financial assets at amortized cost are subsequently measured using the effective interest (EIR) method and are subject to
impairment. Gains and losses are recognized in profit or loss when the asset is derecognized, modified or impaired.

The Group’s financial assets at amortized costs includes bank balances, long-term deposits, trade debts, advance to employees
against salary, interest accrued and other receivables.

c) Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon
derecognition (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 recognized 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 does not have any financial assets designated at fair value through OCI (equity instruments).

d) Financial assets at fair value through OCI with recycling of cumulative gains and losses (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

Annual Report 2022 83

Notes to the Financial Statements - Consolidated
FOR THE YEAR ENDED JUNE 30, 2022

For debt instruments at fair value through OCI, interest income, foreign exchange revaluation and impairment losses or reversals
are recognized in the statement of profit or loss and computed in the same manner as for financial assets measured at amortized
cost. The remaining fair value changes are recognized in OCI. Upon derecognition, the cumulative fair value change recognized in
OCI is recycled to profit or loss.

The Group does not have debt instruments recorded at fair value through OCI with recycling of cumulative gains and losses.

Financial assets - Derecognition

A financial asset (or, where applicable a part of a financial asset or part of a Company of similar financial assets) is primarily
derecognized when:

• The rights to receive cash flows from the asset have expired; or

• The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash
flows in full without material delay to a third party under a ‘pass-through’ arrangement; and either (a) the Group has transferred
substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the
risks and rewards of the asset, but has transferred control of the asset.

When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it
evaluates if, and to what extent, it has retained the risks and rewards of ownership. When it has neither transferred nor retained
substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognized to the extent of the
Group’s continuing involvement in the asset. In that case, the Group also recognizes an associated liability. The transferred asset
and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained.

Continuing involvement that takes the form of a guarantee over the transferred asset, is measured at the lower of the original
carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay.

Financial assets - Impairment

The Group recognizes an allowance for expected credit losses (“ECL”) 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 asset’s original effective
interest rate.

ECLs are recognized in two stages. For credit exposures for which there has not been a significant increase in credit risk since
initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months
(a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition,
a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the
default (a lifetime ECL). A financial asset is written off when there is no reasonable expectation of recovering the contractual cash
flows.

For trade debts, the Group applies a simplified approach in calculating ECLs based on lifetime expected credit losses. 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 debtors and the economic environment. The expected credit losses are recognized in the consolidated
statement of profit or loss.

For bank balances, the Group applies a general approach in calculating ECLs based on lifetime expected credit losses. The Group
reviews internal and external information available for each bank balance to assess expected credit loss and the likelihood to
receive the outstanding contractual amount. The expected credit losses are recognized in the consolidated statement of profit or
loss.

6.6.2 Financial liabilities

Financial liabilities - initial recognition

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings,
payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.

All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly
attributable transaction costs.

84 Nimir Industrial Chemicals Ltd.

 The Group’s financial liabilities include long-term loans, short-term borrowings utilized under mark-up arrangements, creditors,
liabilities against assets subject to finance lease, accrued and other liabilities.

Financial liabilities - subsequent measurement

Loans and borrowings

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the EIR method.
Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR amortization
process.

Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral
part of the EIR. The EIR amortization is included as finance costs in the statement of comprehensive income.

The Group’s financial liabilities include long term loans, short-term borrowings utilized under mark-up arrangements, creditors,
lease liabilities, diminishing musharaka finance, accrued and other liabilities.

Financial liabilities - derecognition

A financial liability is derecognized 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 a derecognition of the original liability
and the recognition of a new liability, and the difference in the respective carrying amounts is recognized in the statement of profit
or loss.

6.7 Offsetting of financial assets and financial liabilities

A financial asset and financial liability is offset and the net amount is reported in the consolidated statement of financial position
if the Group has a legal enforceable right to set off the recognized amounts and intends either to settle on net basis or to realize
the assets and settle the liabilities simultaneously.

6.8 Government grants

Government grants are recognized where there is reasonable assurance that the grant will be received and all attached conditions
will be complied with. When the grant relates to an expense item, it is recognized as income on a systematic basis over the
periods that the related costs, for which it is intended to compensate, are expensed. When the grant relates to an asset, it is
recognized as income in equal amounts over the expected useful life of the related asset.

When the Group receives grants of non-monetary assets, the asset and the grant are recorded at nominal amounts and released
to consolidated statement of profit or loss over the expected useful life of the asset, based on the pattern of consumption of the
benefits of the underlying asset by equal annual instalments.

6.9 Trade and other payables

Creditors and other payables are carried at cost which is the fair value of the consideration to be paid in the future for goods and
services received, whether or not invoiced to the Group.

6.10 Provisions and contingencies

a) Provisions

Provisions are recognized in the statement of financial position when the Group has a legal or constructive obligation as a result
of past events and it is probable that outflow of resources embodying economic benefits will be required to settle the obligation
and a reliable estimate of the amount can be made. However, provisions are reviewed at each consolidated statement of financial
position date and adjusted to reflect current best estimate. Where outflow of resources embodying economic benefits is not
probable, a contingent liability is disclosed, unless the possibility of outflow is remote.

b) Contingencies

The assessment of the contingencies inherently involves the exercise of significant judgment as the outcome of the future events

Annual Report 2022 85

Notes to the Financial Statements - Consolidated
FOR THE YEAR ENDED JUNE 30, 2022

cannot be predicted with certainty. The Company, based on the availability of the latest information, estimates the value of
contingent assets and liabilities which may differ on the occurrence / non-occurrence of the uncertain future events.

6.11 Taxation

Current

The charge for the current tax is based on the taxable income for the year determined in accordance with the provisions of the
Income Tax Ordinance, 2001. The charge for current tax is calculated using prevailing tax rates or tax rates expected to apply to the
profit for the year if enacted 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.

Deferred

Deferred tax is provided using the balance sheet method for all temporary differences at the reporting date between tax base of
assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax liability is recognized for all taxable temporary differences and deferred tax assets are recognized for all deductible
temporary differences, carry forward of unused tax credits and unused tax losses, if any, to the extent that it is probable that
future taxable profit will be available against which the deductible temporary differences, carry-forward of unused tax credits and
unused tax losses can be utilized.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the liability is settled
based on tax rates that have been enacted or substantially enacted at the reporting date.
6.12 Contract liabilities

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 recognized when the payment is made or the payment is due (whichever is earlier).
Contract liabilities are recognized as revenue when the Group performs under the contract.

6.13 Revenue recognition

The Group is in the business of providing goods (i.e. oleo chemicals and chlor alkali) and services (i.e. toll manufacturing). Revenue
from contracts with customers is recognized when control of the goods or services are transferred to the customer at an amount
that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services. Specific revenue
recognition details are as follows:

Sale of goods

- Local sales

Revenue from the sale of goods is recognized upon the transfer of control of the goods to the buyer when performance obligation
is satisfied, which refers to the storage of processed finished soap noodles and resins in Group’s warehouse and its intimation to
the respective customer, the delivery or the dispatch of such goods to respective customer, as agreed in the contract. Payment is
generally due within 30 to 90 days of satisfaction of performance obligation.

- Export sales

Revenue from export sales is recognized at the point in time when control of the goods is transferred to the customer which
depends on the related terms; generally on date of bill of lading or delivery of the product to the port of destination.

Service income from toll manufacturing

Sale of goods and toll manufacturing services are distinct performance obligations as the promise to transfer the goods and to
provide services are distinct within the context of the contract. The goods and services are not inputs to a combined item in
the contract. In addition, the goods and services are not highly interdependent or highly interrelated, because the performance
obligation for goods is satisfied upon storage of processed goods into separate warehouse and its intimation to the customer
or delivery to the customer if toll manufacturing services are not opted by the customer, while performance obligation for toll

86 Nimir Industrial Chemicals Ltd.

 manufacturing services is satisfied upon completion of goods into packaged soap and dispatch of such goods to customers. The
Group determines the transaction price of the sale of goods and the toll manufacturing services based on relative stand-alone
selling prices.

Service income from toll manufacturing is recognized upon the completion of processing of soap noodles into packaged soaps
and dispatch of such packaged soaps to respective customer. Payment is generally due within 30 to 90 days of satisfaction of
performance obligation.

Cost to obtain contract

The Group pays sales commission to its distributors and dealers for each contract that they obtain for sale of goods. The Group
has elected to apply the optional practical expedient for costs to obtain a contract which allows the Group to immediately charge
sales commissions (included in note 29) because the amortization period of the asset that the Group otherwise would have used
is one year or less.

Profit on bank deposit

Profit earned on saving and deposit accounts is accrued on time proportion basis by reference to the principal outstanding at the
applicable rate of return.

6.14 Staff retirement benefits

Defined benefit plan

The Group formed an approved funded defined benefit gratuity plan for all of its permanent employees (excluding members of
executive management). Under this plan, gratuity is paid to the retiring employees on the basis of their last drawn gross salary for
each completed year of service.

Experience adjustments are recognized in other comprehensive income when they occur. Amounts recorded in statement of profit
or loss are limited to current and past service cost, gains or losses on settlements, and net interest income / expense. All other
changes in net defined benefit liability are recognized in other comprehensive income with no subsequent recycling to statement
of profit or loss.

6.15 Foreign currency translation

Foreign currency transactions are recorded at the rate of exchange prevailing on the date of transactions. Monetary assets and
liabilities in foreign currencies are translated into Pak rupees at the rate of exchange prevailing at the reporting date.

Profits or losses arising on translation are recognized in the consolidated statement of profit or loss.

6.16 Borrowing costs

Borrowing costs are recognized as an expense in the period in which these are incurred except to the extent of borrowing costs
that are 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. Such borrowing costs are capitalized as part of the cost of the
qualifying asset.

6.17 Pricing for related party transactions

All transactions with related parties and associated undertakings are carried at mutually agreed terms.

6.18 Operating segments

For management purposes, the Group is organized into business units based on its products and services and has two reportable
segments, as follows:

- Oleo chemicals and chlor alkali

- Coating emulsion and resins

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

Annual Report 2022 87

Notes to the Financial Statements - Consolidated
FOR THE YEAR ENDED JUNE 30, 2022

regularly by the Chief Operating Decision Maker (CODM) to assess segment’s performance, and for which discrete financial
information is available. Segment results that are reported to the CODM include items directly attributable to a segment as well
as those that can be allocated on a reasonable basis.

6.19 Sales tax

Expenses and assets are recognized net of the amount of sales tax, except:

- When the sales tax incurred on a purchase of assets or services is not recoverable from the Taxation authority, in which case,
the sales tax is recognized as part of the cost of acquisition of the asset or as part of the expense item, as applicable.

- When receivables and payables are stated with the amount of sales tax included the net amount of sales tax recoverable
from, or payable to, the taxation authority is included as part of receivables or payables in the consolidated statement of
financial position.

6.20 Current versus non-current classification

The Group presents assets and liabilities in the statement of consolidated financial position based on current/non-current
classification. An asset is current when it is:

- Expected to be realized or intended to be sold or consumed in the normal operating cycle;

- Held primarily for the purpose of trading;

- Expected to be realized within twelve months after the reporting period; or

- Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after
the reporting period.

All other assets are classified as non-current.

A liability is current when:

- It is expected to be settled in the normal operating cycle;

- It is held primarily for the purpose of trading;

- It is due to be settled within twelve months after the reporting period; or

- There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.

The terms of the liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments
do not affect its classification.

The Company classifies all other liabilities as non-current. Deferred tax liabilities are classified as non-current assets and liabilities.

7 ISSUED, SUBSCRIBED AND PAID UP CAPITAL

2022 2021 2022 2021

No. of shares Rupees Rupees
110,590,546 110,590,546 Ordinary shares of Rs. 10 each fully paid in cash 1,105,905,460 1,105,905,460
8 NON-CONTROLLING INTEREST (NCI)

The following table summarizes the information relating to each of the Group’s subsidiaries that have NCI, before any intra-group
eliminations.

88 Nimir Industrial Chemicals Ltd.

 2022
Nimir Management Nimir Resins
Total
(Private) Limited Limited
NCI Percentage 49.00% 62.36%
Rupees
Non current assets 292,900,843 734,343,254 1,027,244,097
Current assets 123,341 4,744,826,366 4,744,949,707
Non current liabilities (78,544,500) (366,506,258) (445,050,758)
Current liabilities (196,000) (3,271,306,187) (3,271,502,187)
Net assets 214,283,684 1,841,357,175 2,055,640,859
Net assets attributable to NCI 104,999,005 1,148,270,334 1,253,269,339
Revenue - 8,271,380,512
Profit / (loss) for the year (327,865) 366,871,132 366,543,267
Other comprehensive income - 839,445 839,445
Total comprehensive income / (loss) (327,865) 367,710,577 367,382,712
Profit / (loss) allocated to NCI (160,654) 228,780,838 228,620,184
Other comprehensive income allocated to NCI - 523,478 523,478
(160,654) 229,304,316 229,143,662
Cashflows from operating activites (112,265) (1,343,359,514) (1,343,471,779)
Cashflows from investing activites - (141,430,754) (141,430,754)
Cashflows from financing activites - 1,481,681,197 1,481,681,197
Net decrease in cash and cash equivalents (112,265) (3,109,071) (3,221,336)
2021
Nimir Management Nimir Resins
Total
(Private) Limited Limited
NCI Percentage 49.00% 62.36%
Rupees
Non current assets 292,900,843 633,326,687 926,227,530
Current assets 123,341 3,175,173,163 3,175,296,504
Non current liabilities (78,544,500) (201,916,212) (280,460,712)
Current liabilities (196,000) (2,031,649,388) (2,031,845,388)
Net assets 214,283,684 1,574,934,250 1,789,217,934
Net assets attributable to NCI 109,528,241 805,006,594 914,534,835
Revenue - 6,277,703,001 6,277,703,001
Profit / (loss) for the year (313,170) 358,746,633 358,433,463
Other comprehensive loss - (1,101,870) (1,101,870)
Total comprehensive income / (loss) (313,170) 357,644,763 357,331,593
Profit / (loss) allocated to NCI (153,453.30) 223,714,400 223,560,947
Other comprehensive loss allocated to NCI - (687,126) (687,126)
(153,453.30) 223,027,274 222,873,821
Cashflows from operating activites (307,745) 18,769,882 18,462,137
Cashflows from investing activites - (142,736,670) (142,736,670)
Cashflows from financing activites - 137,272,194 137,272,194
Net decrease in cash and cash equivalents (307,745) 13,305,406 12,997,661

8.1 This reclassification does not have any impact on the comparative amounts in the consolidated statement of financial position;
accordingly, the related amounts have not been restated.

Annual Report 2022 89

Notes to the Financial Statements - Consolidated
FOR THE YEAR ENDED JUNE 30, 2022

9 LONG-TERM LOANS 2022 2021

Note
Rupees Rupees
Term Finance 9.1 2,221,018,757 1,021,741,951
Term Finance - under refinance scheme for payroll financing 9.2 56,459,229 165,703,196
Term Finance - under temporary economic refinance facility 9.3 3,717,781,635 1,138,217,597
Term Finance - under financing scheme for renewable energy 9.4 32,500,000 45,000,000
Loan from directors / sponsors 9.5 107,000,000 107,000,000
6,134,759,621 2,477,662,744
Mark up accrued 103,983,546 28,616,261
6,238,743,167 2,506,279,005
Less: Current maturity shown under current liabilities (472,173,938) (485,828,720)
Less: Mark up accrued shown under current liabilities (103,983,546) (28,616,261)
5,662,585,683 1,991,834,024
9.1 This represents long-term finance facilities obtained from financial institutions carrying mark-up at the rate of 3 months KIBOR
plus 75 bps to 150 bps per annum repayable over a period of 3.5 to 6 years including 0 to 1 year grace period in equal monthly
and quarterly instalments. These facilities are secured against first joint pari passu charge and exclusive charge over present and
future fixed assets of the Group.
9.2 This represents loan obtained under Refinance Scheme for Payment of Wages and Salaries to Workers and Employees of Business
Concerns (the Scheme) offered by State Bank of Pakistan to mitigate the effect of COVID-19 on employment in Pakistan. The loans
carry mark-up at an average rate of 2.02% per annum and repayable in 8 equal quaterly instalments starting from January 2021.
This facility is secured against first joint pari passu charge over fixed assets of the Company. The loan was initially recognized at fair
value in accordance with IFRS 9 - Financial instruments using effective interest rate of 3-month KIBOR plus spread. The difference
between fair value of loan and loan proceeds has been recognized as deferred grant as per requirements of IAS 20 (Accounting
for Government grants and disclosure of Government assistance) and as per Circular 11/2020 issued by the Institute of Chartered
Accountants of Pakistan.
9.3 These represent the loans obtained under the Temporary Economic Refinance Facility offered by the State Bank of Pakistan (the
“SBP TERF”) for setting up imported and locally manufactured plants and machinery for new projects. The loan carries mark-up at
the rate of SBP TERF Refinance rate plus 100 bps to 200 bps per annum repayable in equal quarterly installments over a period of
10 years including 2 years grace period. These facilities are secured against first joint pari passu charge over all present and future
fixed assets of the Company. The loan was initially recognized at fair value in accordance with IFRS 9 - Financial instruments using
an effective interest rate of three (3) month KIBOR plus spread respectively. The difference between the fair value of the loan and
loan proceeds has been recognized as deferred income as per requirements of IAS 20 (Accounting for Government grants and
disclosure of Government assistance) and as per Circular 11/2020 issued by the Institute of Chartered Accountants of Pakistan.
9.4 This represents long-term finance facility obtained from financial institution under State Bank of Pakistan’s (SBP) Financing Scheme
for Renewable Energy. This loan is repayable in 20 equal installments payable quarterly in arrears starting from March 31, 2021.
Markup is charged at SBP rate plus 2% p.a.payable quarterly in arrears. This loan is secured against joint pari passu charge of Rs.
67 million over fixed assets of the Company with 25% margin.
9.5 This represents loan obtained from ex-director / sponsors of Nimir Resins Limited. This loan is interest free and repayable on
demand, however, the lender has agreed not to demand repayment for a period of next twelve months.

10 LEASE LIABILITIES 2022 2021

Rupees Rupees
Present value of lease rentals 152,781,085 150,903,583
Less: Current portion shown under current liabilities (45,273,681) (33,723,604)
107,507,404 117,179,979
Set out below are the carrying amounts of lease liabilities and the movements during the year:
As at 01 July 150,903,583 140,124,138
Additions 37,494,576 52,440,000
Accretion of interest 13,210,159 13,276,618
Payments (48,827,233) (54,936,903)
As at 30 June 152,781,085 150,903,853
Salient features of the leases are as follows:
Discounting rate 8.68% to 12.86 % 7.76% to 16.42%
Period of lease 60 months 60 months
90 Nimir Industrial Chemicals Ltd.
 10.1 Amount recognized in statement of profit or loss: 2022 2021
Note
Rupees Rupees
The following are the amounts recognized in profit or loss:
Short term lease 7,271,820 9,091,798
Interest expense on lease liabilities 13,210,159 13,276,618
20,481,979 22,368,416
10.2 Cash outflow for leases
The Company had total cash outflows for leases of Rs. 56.1 million (2021: Rs. 64.08 million). The Company also had non-cash
additions to right-of-use assets and lease liabilities of Rs. 37.49 million (2021: Rs. 52.44 million).
10.3
The maturity analysis of lease liability has been disclosed in note 39.2.

11 NET DEFINED BENEFIT LIABILITY - FUNDED GRATUITY 2022 2021

Note
Rupees Rupees
Present value of defined benefits obligation 11.5 237,930,639 186,431,124
Less: Fair value of plan assets 11.6 (55,091,002) (33,865,958)
182,839,637 152,565,166

11.1 Net defined benefit liability of the Group compose of the following: 2022 2021
Rupees Rupees
Staff retirement benefit plan - Holding company
Present value of defined benefits obligation 195,554,240 151,222,142
Less: Fair value of plan assets (43,571,378) (22,803,496)
151,982,862 128,418,646
Staff retirement benefit plan - Subsidiary
Present value of defined benefits obligation 42,376,399 35,208,974
Less: Fair value of plan assets (11,519,624) (11,062,454)
30,856,775 24,146,520
11.2 The amounts recognized in the consolidated statement of profit or
loss are as follows:
Current service cost 24,546,907 22,766,414
Interest cost on defined benefit obligation - net 15,141,160 10,012,325
Expense recognized in the consolidated statement of profit or loss 39,688,067 32,778,739
11.3 The charge for the year has been allocated as follows: 2022 2021
Note
Rupees Rupees
Cost of sales 31.2 24,435,507 18,374,992
Distribution costs 32.1 4,394,669 4,681,098
Administrative expenses 33.1 10,857,891 9,722,649
39,688,067 32,778,739
11.4 Movements in the net liability recognized as follows:

Net liabilities at the beginning of the year 152,565,166 113,641,899

Current service cost 24,546,907 22,766,414
Interest cost on defined benefit obligation - net 15,141,160 10,012,325
Contribution by employer (21,807,120) (4,787,717)
Remeasurements charged to other comprehensive income 12,393,524 10,932,245
Net liabilities at the end of the year 182,839,637 152,565,166

Annual Report 2022 91

Notes to the Financial Statements - Consolidated
FOR THE YEAR ENDED JUNE 30, 2022

11.5 Movements in the present value of defined benefit obligation: 2022 2021
Rupees Rupees
Present value of defined benefits obligation at the beginning of the year 186,431,116 144,182,807
Current service cost 24,546,907 22,766,414
Interest cost on defined benefit obligation 18,527,755 12,696,553
Benefits paid (1,807,120) (6,219,987)
Remeasurement:
Experience adjustments 10,231,981 13,005,337
Present value of defined benefit obligation at the end of year 237,930,639 186,431,124

11.6 Movement in the fair value of plan assets

Fair value of plan assets at the beginning of the year 33,865,950 30,540,908
Contribution by employer 21,807,120 4,787,717
Interest Income 3,386,595 2,684,228
Benefits paid (1,807,120) (6,219,987)
Return on plan assets excluding interest income (2,161,543) 2,073,092
Fair value of plan assets at the end of year 55,091,002 33,865,958

11.7 Components of plan assets

Investment in treasury bills 7,098,392 4,130,089
Investment in listed shares 4,171,256 6,732,352
Mutual funds 23,318,258 22,658,049
Cash at bank 20,503,104 345,468
55,091,010 33,865,958
11.8 Estimated expense to be charged to the consolidated statement
of profit or loss in next year
Current service cost 26,175,344
Interest cost on defined benefit obligation - net 16,855,387
Expense recognized in the consolidated statement of profit or loss 43,030,731

11.9 Significant assumptions

Qualified actuaries have carried out the valuation as at 30 June 2021. The projected unit credit method, based on the following
significant assumptions, is used for valuation of the plan:
2022 2021
Discount rate for obligation 13.25% 10.00%
Expected rates of salary increase in future years 12.25% 9.00%
Retirement assumption Age 60 Age 60
11.10 Maturity profile

The Company expects to contribute to the gratuity fund on the advice of the fund’s actuary. The contributions are equal to the
current service cost with adjustment for any deficit.

Projected payments (undiscounted) 2022 2021

Rupees Rupees
Year 1 14,226,845 9,296,892
Year 2 18,436,933 11,578,114
Year 3 22,809,291 14,798,671
Year 4 26,568,879 19,783,852
Year 5 32,078,235 22,827,109
Year 6 to Year 10 206,982,943 169,593,231

92 Nimir Industrial Chemicals Ltd.

 11.11 Sensitivity analysis

A quantitative sensitivity analysis for significant assumptions on defined benefit obligation is shown as below:

Impact on defined
Sensitivity level Assumption
benefit obligation
+100 bps Discount rate 195,538,589
–100 bps Discount rate 233,892,876
+100 bps Expected increase in salary 233,896,459
–100 bps Expected increase in salary 195,540,039
The sensitivity analysis above have been determined based on a method that extrapolates the impact on defined benefit obligation as a
result of reasonable changes in key assumptions occurring at the end of the reporting period.

The average duration of the defined benefit plan obligation at the end of the reporting period is 9 years for the Group.

12 DIMINISHING MUSHARAKA FINANCE 2022 2021

Rupees Rupees
Diminishing musharaka finance 525,325 1,614,240
Less: Current maturity shown under current liabilities (525,325) (1,405,316)
- 208,924
12.1 The subsidiary acquired certain vehicles under the diminishing musharaka financing arrangements from First Punjab Modaraba,
for a period of 60 months from December 2016. The financing is secured against specific charge on this asset to the extent of
outstanding balance of diminishing musharaka. The effective rate is three months KIBOR plus 2.5% with floor rate of 8.55% -
8.66% per annum (2021: 8.55% - 8.66%).

13 DEFERRED TAX LIABILITY 2022 2021

Rupees Rupees
This comprises of:
Deferred tax liabilities on taxable temporary differences
Accelerated tax depreciation 558,982,072 407,831,727
Deferred tax assets on deductible temporary differences
Allowance for expected credit losses (31,162,471) (27,007,090)
Provision against stock (13,414,639) (6,174,259)
Deferred and unpaid liabilities (25,875,140) (17,885,262)
Capital work in progress - impairment (20,336,700) (18,375,856)
Others (13,982,427) (5,356,777)
454,210,695 333,032,483

Reconciliation of deferred tax liabilities, net 2022 2021

Rupees Rupees
As of 1 July 333,032,483 358,059,262
Tax expense recognized in consolidated statement of profit or loss 125,268,075 (21,856,428)
Tax income recognized in consolidated OCI (4,089,863) (3,170,351)
As at 30 June 454,210,695 333,032,483
14 DEFERRED GRANT

This represents deferred grant recognized on loans received at below market interest rate under SBP refinance scheme for payment of
wages and salaries to the workers and employees of business concerns (as explained in Note 7.2) and under SBP temporary economic
refinance facility for imported and locally manufactured new plant and machinery to be used for setting up of new projects.

Annual Report 2022 93

Notes to the Financial Statements - Consolidated
FOR THE YEAR ENDED JUNE 30, 2022

2022 2021
Note
Rupees Rupees
Movement during the year is as follows: 12,494,241 24,063,486
Balance as at 01 July 1,211,564,627
Amount recognized as deferred grant during the year
Amortization during the year
- Charged to other income (16,539,583) (11,569,245)
- Charged to CWIP (124,095,355)
1,083,423,930 12,494,241
Less: Current maturity of deferred grant (169,891,401) (9,515,864)
Balance as at 30 June 913,532,529 2,978,377
15 TRADE AND OTHER PAYABLES
Creditors 15.1 1,469,929,158 1,247,334,222
Accrued liabilities 15.2 568,917,470 783,946,748
Security deposits 15.3 400,000 400,000
Workers' profit participation fund 15.4 165,123,223 156,341,387
Workers' welfare fund 15.5 58,746,562 65,192,481
Withholding tax payable 609,734 581,175
Others 33,542,755 29,460,963
2,297,268,902 2,283,256,976
15.1 Creditors include amount payable to Nimir Chemcoats Limited (associated company) amounting to Rs. 38,001 (2021: 350,384) on
account of purchase of raw materials.
15.2 This includes modified liability of Government Infrastructure Development Cess payable amounting to Rs. 144,222,846 recognized
at fair value using effective interest rate method as per the the requirements of “Guidance on Accounting of GIDC” issued by the
Institute of Chartered Accountants of Pakistan (ICAP) in January 2021. Movement during the year is as follows:

2022 2021
Note
Rupees Rupees
Balance as at 01 July 144,222,846 147,160,704
Gain on extinguishment of original GIDC liability 35 - (10,162,332)
Finance cost 36 4,170,101 7,224,474
Balance as at 30 June 148,392,947 144,222,846
15.3 These represent security deposits from distributors which, by virtue of agreement, are interest free, repayable on demand and are
used in the normal course of business.

15.4 Workers’ profit participation fund 2022 2021

Note
Rupees Rupees
Balance as at 01 July 156,341,387 82,431,997
Add: Provision for the year 34 165,123,430 156,341,594
Less: Payments made during the year (156,341,594) (82,432,204)
Balance as at 30 June 165,123,223 156,341,387
15.5 Workers’ welfare fund
Balance as at 01 July 34 65,192,481 30,168,561
Add: Provision for the year 56,144,481 64,349,803
Less: Payments made during the year (62,590,400) (29,325,883)
Balance as at 30 June 58,746,562 65,192,481

16 CONTRACT LIABILITIES 139,231,891 154,037,188

16.1 This represents advance consideration received from customers in ordinary course of business. No amounts have been received
from related parties (2021: Nil).
16.2 Revenue recognized in the reporting period that was included in the contract liabilities balance at the beginning of the period
amounts to Rs. 136,733,485 (2021: Rs. 139,231,891).

94 Nimir Industrial Chemicals Ltd.

17 SHORT-TERM BORROWINGS - SECURED 2022 2021
Rupees Rupees
Running finance 2,356,092,258 791,347,661
Finance Against Trust Receipts 12,439,952,807 5,951,799,213
Local bills discounting 728,001,210 200,000,000
15,524,046,275 6,943,146,874
The aggregate of short term finance facilities available from various financial institutions (including commercial banks) at year end is
Rs.18,450 million (2021: Rs.13,611 million) which includes running finance facilities amounting Rs. 3,575 million (2021: Rs.2,197 million).
The rate of mark up ranges from 1 month KIBOR to 6 months KIBOR + 0 to 75 bps with no floor and no cap (2021: 1 month KIBOR to 6
months KIBOR + 0 to 75 bps with no floor and no cap). The facilities are secured against joint pari passu charge on the present and future
current assets of the Company.
18 CONTINGENCIES AND COMMITMENTS
18.1 CONTINGENCIES
Pending the outcome of below cases, no provision has been made in the financial statements, since the management of the
Company based on its consultants’ opinion, is confident that the outcome of the appeals will be in favor of the Company. The
aggregate exposure of the following cases amounts to Rs. 249.7 million.
Holding Company
18.1.1 The income tax authority amended the Company’s assessment relating to tax year 2009 under section 122 (5A) of the Ordinance,
disallowing certain expenses thereby reducing declared loss from Rs. 167 million to Rs. 65 million (consequent tax exposure Rs.
35.7 million). The Company filed an appeal before the Commissioner Inland Revenue (Appeals), who upheld the order on major
additions vide Order dated 23 April 2018. The Company has filed second appeal before the ATIR dated 21 May 2018, which is
pending adjudication.
18.1.2 The income tax authority raised a tax demand of Rs. 206 million by treating the remission of loan as taxable income of Rs. 711
million for the Tax Year 2011 which was challenged at Appellate Tribunal Inland Revenue (ATIR). The ATIR decided the case in favor
of the Company vide Order dated 2 December 2013. The Income Tax Department has filed an appeal in February 2014 before the
Honorable Lahore High Court against the ATIR’s decision which is pending adjudication. During the year, the Honorable Lahore High
Court remanded back the case to ATIR for fresh hearing. The Company has filed an appeal before the Supreme court against the
Lahore High Court decision which is pending adjudication.
18.1.3 The income tax authority amended the Company’s assessment relating to Tax Year 2016 under section 161 / 205 of the Income
Tax Ordinance, 2001 (the Ordinance) raised a demand of Rs. 8 million vide Order dated 15 May 2017. The Company filed an
appeal before Commissioner Inland Revenue (Appeals), who upheld the said order. The Company filed second appeal before the
Appellate Tribunal Inland Revenue (ATIR) who decided the case in favor of the Company vide Order dated 22 January 2018. The tax
authority has filed a reference dated 11 June 2018 before the Lahore High Court against the decision of the ATIR which is pending
adjudication.
18.2 COMMITMENTS
Commitments in respect of letters of credit, letters of guarantee, capital expenditures and diminishing musharaka as at 30 June
are as follows:

2022 2021
Note
Rupees Rupees
Letters of credit established for the import of raw materials, spare parts
4,185 million 5,512 million
and machinery
Letter of guarantee given to SNGPL 136 million 99 million
Letter of guarantee given to PSO 62 million 62 million
Letter of guarantee given to Total PARCO 13 million 13 million
19 PROPERTY, PLANT AND EQUIPMENT

Operating fixed assets 19.1 6,128,861,551 4,128,488,871

Capital work-in-progress 19.2 6,895,310,709 2,026,556,860
13,024,172,260 6,155,045,731

Annual Report 2022 95

96
19.1 Operating fixed assets
2022
C O S T D E P R E C I A T I O N Net book value
Accumulated Accumulated
As At Additions / Transfer/ As At Rate Charge for the Transfer/ As at
PARTICULARS Disposals as at Disposals as at
01 July 2021 Transfers* Adjustment 30 June 2022 % year Adjustment 30 June 2022
01 July 2021 30 June 2022
Rupees Rupees Rupees
OWNED
Free-hold land 597,084,255 163,238,546 - - 760,322,801 - - - - - - 760,322,801
Building on free-hold land 834,125,433 471,769,901* (213,480) 84,103 1,305,765,957 4-5 325,965,397 52,981,268 (211,469) 50,445 378,785,641 926,980,316
Plant and machinery 5,240,253,975 1,770,324,587 * (24,244,751) 50,343,614 7,036,677,425 4-50 2,494,097,091 382,002,859 (4,527,847) 23,979,418 2,895,551,521 4,141,125,904

Nimir Industrial Chemicals Ltd.

Furniture and fittings 7,096,462 700,437 (163,499) - 7,633,400 10-33 4,785,308 949,574 (125,930) - 5,608,952 2,024,448
Office and factory equipment 300,571,375 93,553,171 (2,621,790) - 391,502,756 10-50 162,505,286 83,196,118 (2,598,764) - 243,102,640 148,400,116
FOR THE YEAR ENDED JUNE 30, 2022

Vehicles 81,788,223 20,802,350 (164,900) 34,203,500 136,629,173 20-25 61,819,675 9,043,984 (138,945) 34,229,996 104,954,710 31,674,463
7,060,919,723 2,520,388,992 (27,408,420) 84,631,217 9,638,531,512 3,049,172,757 528,173,803 (7,602,955) 58,259,859 3,628,003,464 6,010,528,048
RIGHT-OF-USE
Vehicles 109,034,681 65,970,145 - (34,203,500) 140,801,326 20 62,406,559 22,110,489 - (34,229,996) 50,287,052 90,514,274
Plant and machinery 50,427,717 - - (50,427,717) - 4-50 24,029,863 - - (24,029,863) - -
Notes to the Financial Statements - Consolidated

Building - lease-hold 74,274,371 - - - 74,274,371 20 30,558,442 15,896,700 - - 46,455,142 27,819,229

233,736,769 65,970,145 - (84,631,217) 215,075,697 116,994,864 38,007,189 - (58,259,859) 96,742,194 118,333,503
2022 7,294,656,492 2,586,359,137 (27,408,420) - 9,853,607,209 3,166,167,621 566,180,992 (7,602,955) - 3,724,745,658 6,128,861,551
2021
C O S T D E P R E C I A T I O N Net book value
Accumulated Accumulated
As At Additions / Transfer/ As At Rate Charge for the Transfer/ As at
PARTICULARS Disposals as at Disposals as at
01 July 2020 Transfers* Adjustment 30 June 2021 % year Adjustment 30 June 2021
01 July 2020 30 June 2021
Rupees Rupees Rupees
OWNED
Free hold land 425,479,660 171,604,595 - - 597,084,255 - - - - - - 597,084,255
Building on free hold land 764,639,415 69,434,230* - 51,788 834,125,433 4-5 263,695,728 62,233,404 - 36,265 325,965,397 508,160,036
Plant and machinery 5,011,758,373 231,641,704* (3,094,314) (51,788) 5,240,253,975 4-50 2,045,573,585 451,245,110 (2,685,339) (36,265) 2,494,097,091 2,746,156,884
Furniture and fittings 7,177,046 971,000 (1,051,584) - 7,096,462 10-33 4,880,309 956,521 (1,051,522) - 4,785,308 2,311,154
Office and factory equipment 219,209,759 91,632,971 (10,271,355) - 300,571,375 10-50 135,295,915 37,150,694 (9,941,323) - 162,505,286 138,066,089
Vehicles 74,195,886 8,034,227 (1,535,890) 1,094,000 81,788,223 20-25 50,158,890 12,076,275 (1,000,886) 585,396 61,819,675 19,968,548
6,502,460,139 573,318,727 (15,953,143) 1,094,000 7,060,919,723 2,499,604,427 563,662,004 (14,679,070) 585,396 3,049,172,757 4,011,746,966
RIGHT-OF-USE
Vehicles 94,014,751 16,113,930 - (1,094,000) 109,034,681 20 44,224,809 18,767,146 - (585,396) 62,406,559 46,628,122
Plant and machinery 50,427,717 - - - 50,427,717 4-50 19,998,992 4,030,871 - - 24,029,863 26,397,854
Building - lease-hold 74,274,371 - - - 74,274,371 20 14,661,741 15,896,701 - - 30,558,442 43,715,929
218,716,839 16,113,930 - (1,094,000) 233,736,769 78,885,542 38,694,718 - (585,396) 116,994,864 116,741,905
2021 6,721,176,978 589,432,657 (15,953,143) - 7,294,656,492 2,578,489,969 602,356,722 (14,679,070) - 3,166,167,621 4,128,488,871

* These represent capital expenditure transferred from capital work in progress.

 19.1.1
Owned vehicles include vehicles amounting to Rs. 9.095 million (2021: Rs. 9.095 million) which have been obtained through
Diminishing Musharaka Financing.

19.1.2 There are fully depreciated assets, having cost of Rs. 811.65 million (2021: Rs. 399.32 million) that are still in use as at the reporting
date.

19.1.3 No assets were sold to the Chief Executive, Directors, Executives or shareholders holding more than 10% of total paid-up capital.
19.1.4 Depreciation for the year has been allocated as under:
2022 2021
Rupees Rupees
Cost of sales 532,851,527 576,350,057
Distribution costs 6,256,533 6,790,607
Administrative expenses 27,072,932 19,216,058
566,180,992 602,356,722

19.1.5 Disposal of property, plant and equipment

Details of disposed assets are as follows:

"Particulars of Accumulated "Net Book "Sale Gain / Mode of

Description Cost
buyer" Depreciation Value " Proceeds" (Loss) disposal

Rupees
Building on free-hold land Third party 213,480 (211,469) 2,011 5,000 2,989 Negotiation
Jublee General
Insurance
Plant and machinery Insurance 24,244,751 (4,527,847) 19,716,904 19,718,789 1,885
claim
Company Ltd.
Furniture and fittings Third party 163,499 (125,930) 37,569 8,900 (28,669) Negotiation
Office and factory equipment Third party 2,621,790 (2,598,764) 23,026 105,500 82,474 Negotiation
Vehicles Third party 164,900 (138,945) 25,955 525,000 499,045 Negotiation

2022 27,408,420 (7,602,955) 19,805,465 20,363,189 557,724

2021 15,953,143 (14,679,070) 1,274,073 1,767,298 493,225

19.1.6 Particulars of immovable property (i.e. land and building) in the name of the Group are as follows:

Location and usage of immovable property Total Area

Oleo chemicals and chlor alkali plant and warehouse
14.8 Km, Sheikhupura-Faisalabad Road, Mouza Bhikki, District Sheikhupura. 68.9 acres
Coating, emulsion and resins plant and warehouse
14.5 Km, Lahore Sheikhupura Road, Lahore 13.3 acres
Warehouse
14.8 Km, Sheikhupura-Faisalabad Road, Mouza Bhikki, District Sheikhupura. 10.4 acres
Head office
Plot No. 122-A, Muslim Town, Lahore 2.5 kanals
Land
Plot Nos. 14,14-A and 515-D, block K, Johar Town, Lahore, Pakistan 2.25 kanals

Annual Report 2022 97

Notes to the Financial Statements - Consolidated
FOR THE YEAR ENDED JUNE 30, 2022

2022 2021
Plant and
Building on
19.2 Capital work-in-progress machinery - Others Total Total
free-hold land Note 19.2.1
Rupees Rupees Rupees Rupees Rupees
Opening balance - 2,057,850,880 32,071,000 2,089,921,880 235,593,265
Additions during the year 450,725,731 6,662,992,860 37,789,764 7,151,508,355 2,150,025,560
450,725,731 8,720,843,740 69,860,764 9,241,430,235 2,385,618,825
Transferred to fixed assets (450,725,731) (1,791,368,755) (40,660,020) (2,282,754,506) (295,696,945)
- 6,929,474,985 29,200,744 6,958,675,729 2,089,921,880
Less: Accumulated impairment - (63,365,020) - (63,365,020) (63,365,020)
- 6,866,109,965 29,200,744 6,895,310,709 2,026,556,860

19.2.1 Plant and machinery includes borrowing cost capitalized during the year amounting to Rs. 160,448,610 (2021: Rs. 22,669,749).
The expansion has been financed by term finance facilities from financial institutions as described in note 8. The rate used to
determine the amount of borrowing costs eligible for capitalisation is three (3) month KIBOR plus 1% spread, reduced by the
amortization of relevant deferred grant.
19.2.2 Accumulated impairment represents impairment charged against two steam turbines in prior years.
19.2.3 These include the major capital expenditure incurred on the following ongoing projects:
- Thermal power house
- Chlorine liquefaction plant
- Chlorinated paraffin wax plant

20 INTANGIBLES 2022 2021

Note
Rupees Rupees
Software and licenses
Cost:
As at 1 July 5,862,934 5,862,934
Additions during the year 32,280,721 -
As at 30 June 38,143,655 5,862,934
Accumulated amortization:
As at 1 July (5,862,934) (5,531,198)
Amortization during the year 33 (1,793,373) (331,736)
As at 30 June (7,656,307) (5,862,934)
Net book value 30,487,348 -
Rate of amortization 20% - 33.33% 20% - 33.33%

21 LONG-TERM DEPOSITS 2022 2021

Note
Rupees Rupees
Security deposits
Financial institutions (including banks) 27,071,330 32,727,253
Others 21.1 36,077,072 28,796,002
63,148,402 61,523,255

21.1 This includes deposit amounting to Rs. 12.24 million (2021: Rs. 12.24 million) given to electricity supply company for dedicated line.

21.2 These deposits have not been discounted to present value using the effective interest rate method as the effect of discounting is
considered to be immaterial.

98 Nimir Industrial Chemicals Ltd.

22 STORES, SPARE PARTS AND LOOSE TOOLS 2022 2021
Note
Rupees Rupees
Stores, spare parts and loose tools
In hand 425,389,137 319,229,757
In transit 137,201,605 7,461,707
Less: Provision for slow moving items 22.1 (11,125,544) (14,154,991)
551,465,198 312,536,473
22.1 Movement in provision for slow moving items is as follows:

Opening balance 14,154,991 3,154,991

Charge for the year 34 (3,029,447) 11,000,000
Closing balance 11,125,544 14,154,991

23 STOCK-IN-TRADE

Raw and packing material

In hand 7,136,414,411 1,575,597,273
In transit 1,056,263,599 4,200,482,175
8,192,678,010 5,776,079,448
Finished goods 1,854,556,506 1,663,213,581
Solar panel purchased for resale 92,939,700 -
Less: Provision for obsolescence 23.1 (29,830,148) (21,290,548)
1,917,666,058 1,641,923,033
10,110,344,068 7,418,002,481

23.1
Movement in provision for obsolescence of stock is as follows:

Opening balance 21,290,548 15,782,248

Charge for the year 31 8,539,600 5,508,300
Closing balance 29,830,148 21,290,548

24 TRADE DEBTS

Considered good - unsecured

Due from customers 24.1 8,193,904,244 4,567,792,349
Due from associated companies 24.2 906,235 10,127,300
8,194,810,479 4,577,919,649
Considered doubtful 95,032,217 93,127,894
Allowance for expected credit losses 24.4 (95,032,217) (93,127,894)
8,194,810,479 4,577,919,649
24.1 These customers have no recent history of default. For age analysis of these trade debts, referred to Note 39.1.1

24.2 Trade debts from related parties are as follows: 2022 2021
Rupees Rupees
Nimir Chemcoats Limited - 10,127,300
Nimir Chemicals Pakistan Limited 906,235 -
24.3 Maximum aggregate amount due from Nimir Chemcoats Limited and Nimir Chemicals Pakistan Limited at the end of any month
in the year is Rs. 10,127,300 (2021: 10,127,300) and Rs. 906,235 (2021: Nil) respectively. No interest has been charged on the
amounts due from associated undertakings.

Annual Report 2022 99

Notes to the Financial Statements - Consolidated
FOR THE YEAR ENDED JUNE 30, 2022

24.4 Movement in allowance for expected credit losses is as follows: 2022 2021
Note
Rupees Rupees
Opening balance 93,127,894 141,621,516
Charge for the year 34 1,904,323 42,417,621
Bad debt written off - (90,911,243)
As at 30 June 95,032,217 93,127,894

25 LOANS AND ADVANCES

Considered good - unsecured

Suppliers 122,858,123 89,945,266
Employees against business expenses 25.1 18,661,490 4,217,105
Employees against salary 25.2 8,481,086 7,136,404
150,000,699 101,298,775

25.1 This includes advance given to executives amounting to Rs. 14.3 million (2021: Rs. 1.64 million). No amount has been given to CEO
or Directors.

25.2 This includes advance given to executives amounting to Rs. 2.03 million (2021: Rs. 2.87 million). No amount has been given to CEO
or Directors.

26 TRADE DEPOSITS AND SHORT-TERM PREPAYMENTS 2022 2021

Rupees Rupees
Prepayments 22,206,862 12,445,953

27 OTHER RECEIVABLES

Margin against bank guarantee 17,409,000 17,409,000

Margin against letters of credit 165,004,993 29,632,770
182,413,993 47,041,770

28 TAX REFUNDS DUE FROM THE GOVERNMENT 2022 2021

Rupees Rupees
Income tax 1,520,057,154 984,214,141
Sales tax 1,230,488,208 89,695,569
2,750,545,362 1,073,909,710

29 CASH AND BANK BALANCES 2022 2021

Note
Rupees Rupees
Cash in hand 3,477,151 1,053,106
Cash at bank
Current accounts 238,535,253 98,686,880
Savings account 29.1 42,923,646 352,522
281,458,899 99,039,402

284,936,050 100,092,508

29.1
These carry mark-up rate at 6.5 % - 11.5% (2021: 5.5%) per annum.

100 Nimir Industrial Chemicals Ltd.

30 REVENUE FROM CONTRACTS WITH CUSTOMERS - NET

Set out below is the disaggregation of the Group’s revenue from contracts with customers:
2022 2021
Note
Rupees Rupees
Major products and services:
Manufacturing 47,932,728,916 33,709,974,898
Toll manufacturing 1,180,670,473 693,854,624
49,113,399,389 34,403,829,522
Less:
Sales tax (7,105,440,928) (5,082,987,604)
Trade discounts (66,491,749) (33,740,823)
Commission (88,169,048) (85,537,767)
(7,260,101,725) (5,202,266,194)
41,853,297,664 29,201,563,328
Local Sales 40,885,149,128 29,191,809,451
Export sales 968,148,536 9,753,877
41,853,297,664 29,201,563,328
Geographical region:
Pakistan - South Asia 40,885,149,128 29,191,809,451
Export Sales - Middle East 785,100,235 9,753,877
Export Sales - -Central Asia 183,048,301 -
41,853,297,664 29,201,563,328
Timing of transfer of goods:
Goods transferred to customers at a point in time 41,853,297,664 29,201,563,328
31 COST OF SALES
Raw and packing material consumed 31.1 33,624,388,970 23,220,914,973
Salaries, wages and benefits 31.2 800,968,210 673,272,730
Depreciation 19.5 532,851,527 576,350,057
Fuel and power 1,405,235,701 838,877,027
Stores, spares and loose tools consumed 169,980,473 168,778,491
Repairs and maintenance 44,767,212 108,604,119
Traveling, conveyance and entertainment 93,869,369 54,612,508
Communication 4,897,901 4,159,625
Insurance 46,081,994 25,428,966
Rent, rates and taxes 22,817,819 2,889,548
Printing and stationery 2,225,170 3,223,229
Provision for obsolescence of stock 23.1 8,539,600 5,508,300
Fee and consultancy charges 634,154 2,073,047
Dues, fees and subscription 4,127,199 3,693,668
Other expenses 4,312,726 3,117,283
36,765,698,025 25,691,503,571
Add: Opening stock-finished goods 23 1,663,213,581 837,273,161
Less: Closing stock-finished goods 23 (1,947,496,206) (1,663,213,581)
36,481,415,400 24,865,563,151
31.1 Raw and packing material consumed
Opening Balance 5,540,956,942 4,047,795,012
Purchases 35,902,486,589 24,949,199,409
41,443,443,531 28,996,994,421
Less: Closing Balance 23 (7,819,054,561) (5,776,079,448)
Raw and packing material consumed 33,624,388,970 23,220,914,973
31.2 This includes Rs. 24.44 million (2021: Rs. 18.37 million) in respect of staff retirement benefits - gratuity scheme.

Annual Report 2022 101

Notes to the Financial Statements - Consolidated
FOR THE YEAR ENDED JUNE 30, 2022

31.3 Cost of sales includes direct toll manufacturing expenses amounting to Rs. 599.8 million (2021: Rs. 269.4 million).

32 DISTRIBUTION COSTS 2022 2021

Note
Rupees Rupees
Salaries, wages and benefits 32.1 114,310,864 110,165,834
Repairs and maintenance 1,259,142 362,596
Traveling, conveyance and entertainment 13,452,199 6,621,745
Communication 2,136,261 852,256
Insurance 5,035,071 2,574,206
Freight outward 136,357,316 79,166,223
Packing, carriage and forwarding 30,696,077 27,540,107
Printing and stationery 429,660 682,590
Depreciation 19.5 6,256,533 6,790,607
Sales promotion expenses 120,000 93,241
Rent, rates and taxes 134,800 -
Utilities 620,500 587,223
Dues, fees and subscription 2,135,123 350,600
Other expenses 2,953,268 20,138,228
315,896,814 255,925,456
32.1 This includes Rs. 4.39 million (2021: Rs. 4.68 million) in respect of staff retirement benefits - gratuity scheme.

33 ADMINISTRATIVE EXPENSES 2022 2021

Note
Rupees Rupees
Salaries, wages and benefits 33.1 261,637,225 236,697,777
Fuel and power 6,363,858 3,920,353
Repairs and maintenance 7,392,030 9,232,793
Traveling, conveyance and entertainment 36,082,580 20,671,689
Communications 17,744,230 11,398,331
Insurance 5,171,355 2,384,579
Rent, rates and taxes 6,753,936 4,806,758
Printing and stationery 6,033,605 5,660,038
Advertisement expense 3,460,892 2,406,304
Legal, professional and consultancy charge 17,357,017 14,840,033
Auditors' remuneration 33.2 4,659,904 4,611,192
Depreciation 19.5 27,072,932 19,216,058
Amortization 20 1,793,374 331,736
Dues, fees and subscription 34,447,217 29,347,311
Other expenses 21,021,227 17,580,873
456,991,382 383,105,825
33.1 This includes Rs. 10.86 million (2021: Rs. 9.72 million) in respect of staff retirement benefits - gratuity scheme.

33.2 Auditor's remuneration 2022 2021

Note
Rupees Rupees
Holding Company
Audit fee 1,800,000 1,800,000
Consolidation, reviews and certifications 954,000 954,000
Out of pocket expenses 50,000 50,000
2,804,000 2,804,000
Subsidiary Companies
Audit fee 1,146,000 1,096,000
Consolidation, reviews and certifications 610,000 635,192
Out of pocket expenses 80,304 76,000
1,836,304 1,807,192
4,640,304 4,611,192

102 Nimir Industrial Chemicals Ltd.

34 OTHER EXPENSES 2022 2021
Note
Rupees Rupees
Workers' profit participation fund 15.4 165,123,430 156,341,594
Workers' welfare fund 15.5 56,144,481 64,349,803
Bad debts written off 59,420 -
Expected credit losses of trade debts 24.4 1,904,323 42,417,621
Provision for slow moving stores and spares 22.1 (3,029,447) 11,000,000
Foreign exchange loss / (gain) 28,092,163 (2,676,229)
248,294,370 271,432,789
35 OTHER INCOME
Non financial assets
Gain on disposal of property, plant and equipment 19.2 557,724 493,225
Reversal of provision - 75,700
Grant income 14,670,974 11,569,245
Gain on extinguishment of original GIDC liability - 10,162,332
Rental income 1,706,228 600,000
Other income 1,062,468 459,669
Scrap sales 52,390,337 28,496,013
Financial assets - amortized cost
Profit on savings accounts 1,895,023 926,500
72,282,754 52,782,684
36 FINANCE COST
Mark-up on
Long-term loans 142,924,877 103,556,473
Short-term borrowings 1,148,479,131 436,407,879
Financial charges on lease 13,210,159 13,276,617
Financial charges on GIDC unwinding 1,232,343 7,224,474
Diminishing musharaka finance 400,659 307,071
Bank charges, fee and commission 34,413,914 16,103,918
1,340,661,083 576,876,432
37 TAXATION
Current tax:
Current year 1,068,155,932 867,285,443
Prior year (82,669,669) 281,035
985,486,263 867,566,478
Deferred tax
Effect of rate change from prior year 125,268,075 (21,856,428)
1,110,754,338 845,710,050
37.1 Relationship between tax expenses and accounting profit
Accounting profit before taxation 3,082,321,369 2,901,442,359
Tax at applicable tax rate of 29% (2021: 29%) 893,873,197 841,418,284
Effect of expenses not allowed for tax 30,734,408 4,010,731
Effect of super tax 275,624,388 -
Effect of tax on export sales under Final Tax Regime (6,807,986) -
Effect of prior years tax (82,669,669) 281,035
Tax expense for the year 1,110,754,338 845,710,050
38 EARNINGS PER ORDINARY SHARE - BASIC AND DILUTED

38.1 Basic
Profit attributable to equity holders of the parent (Rupees) 1,742,946,847 1,832,171,362
Weighted average number of ordinary shares (number) 110,590,546 110,590,546
Earnings per ordinary share (Rupees) 15.76 16.57

Annual Report 2022 103

Notes to the Financial Statements - Consolidated
FOR THE YEAR ENDED JUNE 30, 2022

38.2 Diluted

No figure for diluted earning per share has been presented as the Holding Company has not issued any instrument carrying option which
would have an impact on earnings per share when exercised.

39 FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES

The main risks arising from the Group’s financial instruments are credit risk, liquidity risk, foreign currency risk and interest rate risk. The
management reviews and agrees policies for managing each of these risks which are summarized below.

39.1 Credit Risk

Credit risk is the risk which arises with the possibility that one party to a financial instrument will fail to discharge its obligation and cause
the other party to incur a financial loss. The Group attempts to control credit risk by monitoring credit exposures, limiting transactions
with specific counterparties and continually assessing the creditworthiness of counterparties. The Group does not believe it is exposed to
major concentration of credit risk, however to manage any possible exposure the Group applies approved credit limits to its customers.

The management monitors and limits the Group’s exposure to credit risk through monitoring of client’s credit exposure review and
conservative estimates of expected credit loss, if any, and through the prudent use of collateral policy.

The Group is exposed to credit risk on long-term deposits, trade debts, advances to employees against salary, interest accrued, other
receivables and bank balances. The Group seeks to minimize the credit risk exposure through having exposures only to customers
considered credit worthy and obtaining securities where applicable. The maximum exposure to credit risk at the reporting date is:

Carrying values
2022 2021
Rupees Rupees
Long-term deposits 36,077,072 28,796,002
Trade debts – unsecured 8,289,842,696 4,671,047,543
Loans and advances 8,481,086 7,136,404
Other receivables 182,413,993 47,041,770
Bank balances 281,458,899 99,039,402

39.1.1 Trade Debts

Other than related parties
Not yet due 6,765,041,576 2,487,723,076
Past due
1-30 days 973,075,155 1,053,282,842
31-60 days 299,291,903 439,261,858
61-90 days 91,414,798 476,132,048
Over 90 days 160,113,028 204,520,419
1,523,894,885 2,173,197,167
Related parties
1-30 days 906,235 8,488,300
31-60 days - 1,639,000
906,235 10,127,300
8,289,842,696 4,671,047,543
An impairment analysis is performed at each reporting date using a provision matrix to measure expected credit losses. The provision rates
are based on days past due for groupings of various customer segments with similar loss patterns (i.e., by geographical region, product
type, customer type and rating). The calculation reflects the probability-weighted outcome, the time value of money and reasonable and
supportable information that is available at the reporting date about past events, current conditions and forecasts of future economic
conditions. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets. The Group does
not hold collateral as security. The letters of credit and other forms of credit insurance are considered integral part of trade receivables
and considered in the calculation of impairment.

104 Nimir Industrial Chemicals Ltd.

 Set out below is the information about the credit risk exposure on the Group’s trade debts using a provision matrix:

Not due 1-30 days 31-60 days 61-90 days Over 90 days Total
As at 30 June 2022
Expected credit loss rate 0.06% 0.42% 4.51% 8.21% 41.04%
Estimated total gross carrying
amount 6,765,041,576 973,981,390 299,291,903 91,414,798 160,113,028 8,289,842,696
Expected credit loss 4,212,974 4,108,590 13,487,305 7,507,928 65,715,420 95,032,217
As at 30 June 2021
Expected credit loss rate 0.28% 0.20% 0.68% 6.01% 41.29%
Estimated total gross carrying
amount 2,487,723,076 1,061,771,142 440,900,858 476,132,048 204,520,419 4,671,047,543
Expected credit loss 7,338,005 7,263,763 8,881,428 24,317,813 45,326,885 93,127,894
As at 30 June 2022, trade debts of Rs. 95.03 million (2021: Rs. 93.12 million) were impaired and provided for.
39.1.2 Bank balances
Credit risk from balances with banks and financial institutions is managed by the Group’s finance department in accordance with the
Group’s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each
counterparty. Counterparty credit limits are reviewed by the Board of Directors on an annual basis, and may be updated throughout the
year subject to approval of the Finance Committee. The limits are set to minimize the concentration of risks and therefore mitigate financial
loss through a counterparty’s potential failure to make payments.

Ratings 2022 2021

Financial institution
Agency Short-Term Long-Term Rupees Rupees
Albaraka Bank (Pakistan) Limited JCR-VIS A-1 A+ 4,119,387 797,275
Allied Bank Limited PACRA A1+ AAA - -
Askari Bank Limited PACRA A1+ AA+ 40,121 536,196
Bank Alfalah Limited PACRA A1+ AA+ - -
Bank Islami Pakistan Limited PACRA A1 A+ 737,871 1,215,900
Habib Bank Limited JCR-VIS A1+ AAA 14,073,118 7,873,915
Habib Metropolitan Bank Limited PACRA A1+ AA+ 20,065 11,744,859
Bank Al-Habib Limited PACRA A1+ AAA 3,531,072 2,387,633
MCB Bank Limited PACRA A1+ AAA 387,201 352,522
Meezan Bank Limited JCR-VIS A-1+ AAA 6,177,439 24,281,621
National Bank of Pakistan JCR-VIS A-1+ AAA 1,758,382 812,115
Industrial and Commercial Bank of China FITCH RATINGS A F1+ 7,559,537 770,345
Silk Bank Limited JCR-VIS A-2 A- 10,479 10,479
Standard Chartered Bank (Pakistan) Limited PACRA A1+ AAA 126,626,748 568,550
The Bank of Punjab PACRA A1+ AA+ 116,417,479 47,312,541
JS Bank Limited PACRA A1+ AA- - 375,451
281,458,899 99,039,402

39.1.3 With respect to credit risk arising from other financial assets of the Group, including long-term deposits, loans and advances,
interest accrued and other receivables, the Group’s management assesses exposure to such risk to be minimal based on past
experience and is restricted to the carrying amount of those assets.
39.2 Liquidity Risk
Liquidity risk is the risk that the Group will not be able to meet its commitments associated with financial liabilities when they fall
due. Liquidity requirements are monitored regularly and management ensures that sufficient liquid funds are available to meet any
commitments as they arise.
Financial liabilities are analyzed below, with regard to their remaining contractual maturities.

Annual Report 2022 105

Notes to the Financial Statements - Consolidated
FOR THE YEAR ENDED JUNE 30, 2022

Maturity Up to Maturity After

Carrying values Total
One Year One Year
As at 30 June 2022 Rupees
Long-term loans 6,134,759,621 472,173,938 5,662,585,683 6,134,759,621
Lease liabilities 152,781,085 45,273,681 107,507,404 152,781,085
Diminishing musharaka finance 525,325 525,325 - 525,325
Short-term borrowings 15,544,046,275 15,524,046,275 - 15,524,046,275
Mark up accrued 412,132,129 412,132,129 - 412,132,129
Unclaimed dividend 12,618,254 12,618,254 - 12,618,254
Trade and other payables 2,277,515,003 2,297,268,902 - 2,297,268,902
Total financial liabilities 24,534,377,692 18,764,038,504 5,770,093,087 24,534,131,591

Maturity Up to Maturity After

Carrying values Total
One Year One Year
As at 30 June 2021 Rupees
Long-term loans 2,477,662,744 485,828,720 1,991,834,024 2,477,662,744
Lease liabilities 150,903,583 33,723,604 117,179,979 150,903,583
Diminishing musharaka finance 1,614,240 1,405,316 208,924 1,614,240
Short-term borrowings 6,943,146,874 6,943,146,874 - 6,943,146,874
Mark up accrued 115,729,031 115,729,031 - 115,729,031
Unclaimed dividend 11,059,396 11,059,396 - 11,059,396
Trade and other payables 2,061,141,933 2,061,141,933 - 2,061,141,933
Total financial liabilities 11,761,257,801 9,652,034,874 2,109,222,927 11,761,257,801

Changes in liabilities arising from financing activities

As at As at 30 June
Cash flows New leases Others
1 July 2021 2022
Rupees
Long-term loans 2,477,662,744 4,744,566,149 - (1,087,469,272) 6,134,759,621
Lease liabilities 150,903,583 (48,827,233) 37,494,576 13,210,159 152,781,085
Diminishing musharaka finance 1,614,240 (1,088,915) - - 525,325
Short-term borrowings 6,943,146,874 8,594,681,518 - - 15,524,046,275
Unclaimed dividend 11,059,396 (330,212,780) - 331,771,638 12,618,254
9,584,386,837 12,959,118,739 37,494,576 (742,487,475) 21,824,730,560

As at As at 30 June
Cash flows New leases Others
1 July 2020 2021
Rupees
Long-term loans 1,281,872,183 1,208,284,802 - (12,494,241) 2,477,662,744
Lease liabilities 140,124,138 (54,978,003) 52,480,831 13,276,617 150,903,583
Diminishing musharaka finance 3,400,529 (2,093,360) - 307,071 1,614,240
Short-term borrowings 4,452,222,166 2,490,924,708 - - 6,943,146,874
Unclaimed dividend 13,697,104 (389,704,619) - 387,066,911 11,059,396
5,891,316,120 3,252,433,528 52,480,831 388,156,358 9,584,386,837

106 Nimir Industrial Chemicals Ltd.

39.3 Market Risk
39.3.1 Currency Risk
Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign
exchange rates. The Group’s exposure to the risk of changes in foreign exchange rates relates primarily to the foreign trade payables.
However at the year end, there are material foreign currency balances.
39.3.2 Interest Rate Risk
Interest rate risk arises from the possibility that changes in interest rate will affect the fair value or future cash flows of financial instruments.
The Group is exposed to interest rate risk for loans obtained from the financial institutions and lease liabilities, which have been disclosed
in the relevant note to the consolidated financial statements.
If interest rates at the year end, fluctuate by 1% higher / lower, profit for the year would have been Rs. 179.51 million (2021: Rs. 81.17
million) higher / lower. This analysis is prepared assuming that all other variables held constant and the amounts of liabilities outstanding
at the reporting dates were outstanding for the whole year.
39.4 Capital Management
The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in
order to support its business and maximize shareholders’ value. The Group manages its capital structure and makes adjustments to it in
the light of changes in economic conditions. Capital includes ordinary share capital and reserves, whereas, debt includes long-term loans,
short-term borrowings, diminishing musharaka finance and lease liabilities. The gearing ratio of the Group is 74% (2021: 61%).
39.5 Fair value of financial assets and financial liabilities
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. As at the reporting date, carrying value of all the financial instruments in the consolidated financial
statements approximates their fair value. Further, all financial assets and financial liabilities at reporting date are categorized into amortized
cost.
40 RELATIONSHIP AND TRANSACTIONS WITH RELATED PARTIES
The Group have interest based on common directorship and / or percentage of shareholding in following:

Names of companies Basis of relationship

Terranova (Private) Limited Common directorship

Extracts 4 Life (Private) Limited Common directorship
Nimir Chemicals Pakistan Limited Common directorship
Nimir Energy Limited Common directorship
Nimir Resources (Private) Limited Common directorship
Nimir Chemcoats Limited Common directorship
Remuneration of Chief Executive, directors and executives is also shown in Note 42. Transactions with related parties during the year are
as follows:

Nature and Description of Related Party 2022 2021

Names of Company
Transaction Rupees Rupees
Nimir Chemcoats Limited Purchase of goods 31,900,928 1,562,306
Sale of goods 51,439,529 13,209,712
Services provided 1,933,219 600,000
Other reimbursable expenses 1,029,309 -
Nimir Chemicals Pakistan Limited Sale of goods 11,422,560 -
Staff retirement benefits Contribution to gratuity fund 21,807,120 4,787,717

Annual Report 2022 107

108
41 OPERATING SEGMENT INFORMATION

Oleo chemicals and chlor alkali Coating, emulsion and resins Other segments Inter segment eliminations Total
2022 2021 2022 2021 2022 2021 2022 2021 2022 2021
Rupees
Revenue from contracts
33,785,647,781 23,093,743,627 8,271,380,512 6,277,703,001 - - (203,730,629) (169,883,300) 41,853,297,664 29,201,563,328
with customers - net

Nimir Industrial Chemicals Ltd.

Cost of sales (29,495,243,747) (19,542,754,705) (7,205,099,750) (5,483,668,485) - - 218,928,097 168,114,554 (36,481,415,400) (24,858,308,636)
FOR THE YEAR ENDED JUNE 30, 2022

Gross profit 4,290,404,034 3,550,988,922 1,066,280,762 794,034,516 - - 15,197,468 (1,768,746) 5,371,882,264 4,343,254,692

Distribution cost (227,418,225) (182,112,951) (88,839,071) (73,812,505) - - 360,482 - (315,896,814) (255,925,456)

Administrative expenses (377,687,055) (315,860,706) (80,390,304) (67,889,549) (327,865) (313,170) 1,413,842 957,600 (456,991,382) (383,105,825)
Notes to the Financial Statements - Consolidated

Operating profit / (loss) 3,685,298,754 3,053,015,265 897,051,387 652,332,462 (327,865) (313,170) 16,971,792 (811,146) 4,598,994,068 3,704,223,411

Other expenses (145,072,453) (233,437,410) (103,221,917) (53,434,423) - - - 5,508,300 (248,294,370) (281,363,533)

Other income 52,443,951 41,693,483 21,849,163 16,021,190 - - (2,010,360) (4,931,989) 72,282,754 52,782,684
Foreign exchange loss - (601,848) - - - - - 3,278,077 - 2,676,229
Finance cost (1,126,894,948) (464,002,217) (213,766,135) (112,700,527) - - - (173,688) (1,340,661,083) (576,876,432)

Profit / (loss) before

2,465,775,304 2,396,667,273 601,912,498 502,218,702 (327,865) (313,170) 14,961,432 2,869,554 3,082,321,369 2,901,442,359
taxation

Taxation (870,144,950) (702,237,981) (235,041,366) (143,472,069) - - (5,568,022) - (1,110,754,338) (845,710,050)

Profit / (loss) for the year 1,595,630,354 1,694,429,292 366,871,132 358,746,633 (327,865) (313,170) 9,393,410 2,869,554 1,971,567,031 2,055,732,309

Segment assets 30,128,449,637 16,268,986,203 5,963,417,444 4,303,331,960 292,911,919 293,024,184 (1,020,248,279) (1,005,526,042) 35,364,530,721 19,859,816,305

Segment liabilities 23,949,707,627 11,344,959,803 3,637,812,445 2,233,565,600 78,956,100 78,740,500 (159,226,320) (23,238,735) 27,507,249,852 13,634,027,168

43.1 Inter segment sales, purchases and balances have been eliminated.
42 REMUNERATION OF CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVES

Chief Executive Directors Executives

2022 2021 2022 2021 2022 2021
Number of persons 1 1 2 2 51 41
Rupees
Remuneration 20,129,065 15,483,839 24,774,194 20,516,130 144,624,122 108,541,644
Housing 9,058,129 6,967,678 11,148,388 9,232,258 65,367,207 48,843,292
Utilities 2,012,806 1,548,483 2,477,418 2,051,612 14,461,709 10,854,064
Bonus 11,428,049 7,350,085 15,645,060 10,386,930 84,159,978 48,859,362
Gratuity - - - - 12,630,000 10,290,000
42,628,049 31,350,085 54,045,060 42,186,930 321,243,016 227,388,362

42.1 The Chief Executive Officer and Directors have been provided with group - maintained cars and generator sets, further they are
also entitled to club membership and reimbursement of medical and entertainment expenses whereas some executives have
been provided with group - maintained cars.
42.2 An amount of Rs. 10,488,500 (2021: Rs. 7,868,000) was paid to directors for attending the meetings.

43 TOTAL NUMBER OF EMPLOYEES 2022 2021

Number of employees as at 30 June 379 332
Average number of employees during the year 356 319

44 PRODUCTION CAPACITY IN METRIC TONS

2022 2022 2021 2021

Maximum Capacity Actual Production Maximum Capacity Actual Production
Oleo Chemicals (Metric ton)1 140,000 86,716 124,000 101,089
Chlor Alkali Products (Metric ton)2 79,000 50,446 52,000 50,479
Resin Products 45,600 30,499 45,600 33,344
Soap Finishing Line (Metric ton)3 54,000 38,106 54,000 37,766
Aerosol (cans)4 80,000,000 8,540,775 31,363,200 1,970,244
Blending5 - 33,605 - 32,586

1 The plant capacity increased during the year. Actual production remained lowe than last year due to market demand.
2 The plant was upgraded with latest technology in the last quarter of the financial year. The utiliztaion remained lower due to initial teething
issues in the commissioning.
3 The plant capacity was underutilized due to product mix.
4 Another plant has been added for insect killer spray production in last quarter of the year. The market of both body sprays and insect killer is
building gradually.
5 The plant capacity is indeterminable because it is a mult-product plant involving varying processes.

45 Corresponding figures
Corresponding figures have been re-arranged and re-classified, where necessary, for better and fair presentation. However no significant
reclassifications / restatements have been made, other than the following:

Transferred from component Transferred from component 2021

Rupees
Other expenses Cost of sales 7,254,515
Foreign exchange gain Other expenses (2,676,229)
Net defined benefit liability - funded gratuity - Current Net defined benefit liability - funded gratuity -
liabilities Non-Current liabilities 128,418,646
Running finance - Short term borrowings Local bills discounting - Short term borrowings 200,000,000

Annual Report 2022 109

Notes to the Financial Statements - Consolidated
FOR THE YEAR ENDED JUNE 30, 2022

46 SUBSEQUENT EVENTS
The Board of Directors at its meeting held on 27 September 2022 has proposed a final dividend @ Rs. 1.50 per share for the year ended
30 June 2022 (2021: Rs. 2.0) amounting to Rs. 165,885,819 (2021: Rs. 221,181,092) for approval of the members at the Annual General
Meeting to be held on 28 October 2022. These financial statements do not reflect this dividend.
47 GENERAL
Figures have been rounded off to nearest rupee unless otherwise stated.
48 DATE OF AUTHORIZATION FOR ISSUE
These consolidated financial statements were authorized for issue by the Board of Directors on Monday, September 27, 2022

Chief Executive Officer Director Chief Financial Officer

110 Nimir Industrial Chemicals Ltd.

Pattern of Shareholding
AS AT JUNE 30, 2022

–––––––––– Shareholding ––––––––––

No. of Shareholders From To Total Shares Held
221 1 100 8,563
916 101 500 267,304
199 501 1,000 175,296
273 1,001 5,000 763,736
94 5,001 10,000 706,385
44 10,001 15,000 546,188
30 15,001 20,000 536,445
16 20,001 25,000 373,277
7 25,001 30,000 188,319
13 30,001 35,000 424,450
9 35,001 40,000 345,741
1 40,001 45,000 45,000
8 45,001 50,000 387,450
7 50,001 55,000 361,251
3 55,001 60,000 173,900
2 65,001 70,000 139,000
2 70,001 75,000 149,500
2 75,001 80,000 154,500
4 80,001 85,000 331,816
1 85,001 90,000 87,500
2 95,001 100,000 200,000
1 100,001 105,000 104,500
1 110,001 115,000 112,900
1 115,001 120,000 117,700
1 130,001 135,000 135,000
1 140,001 145,000 144,000
1 170,001 175,000 175,000
1 195,001 200,000 200,000
1 250,001 255,000 255,000
1 290,001 295,000 290,500
2 295,001 300,000 600,000
1 330,001 335,000 333,500
1 370,001 375,000 372,500
1 560,001 565,000 561,500
1 645,001 650,000 650,000
1 650,001 655,000 652,425
1 785,001 790,000 788,000
1 1,805,001 1,810,000 1,807,500
1 3,455,001 3,460,000 3,458,000
1 6,480,001 6,485,000 6,482,750
1 8,155,001 8,160,000 8,158,000
1 8,510,001 8,515,000 8,511,750
1 9,565,001 9,570,000 9,569,999
1 10,700,001 10,705,000 10,700,026
1 11,725,001 11,730,000 11,730,000
1 14,065,001 14,070,000 14,068,000
1 24,060,001 24,065,000 24,062,125
1 305,001 310,000 310,000
2 310,001 315,000 624,750
1 330,001 335,000 333,500
1 370,001 375,000 372,500

Annual Report 2022 111

Pattern of Shareholding
AS AT JUNE 30, 2022

–––––––––– Shareholding ––––––––––

No. of Shareholders From To Total Shares Held
1 460,001 465,000 461,000
1 650,001 655,000 652,425
1 785,001 790,000 788,000
1 1,805,001 1,810,000 1,807,500
1 3,455,001 3,460,000 3,458,000
1 6,480,001 6,485,000 6,482,750
1 8,155,001 8,160,000 8,158,000
1 8,510,001 8,515,000 8,511,750
1 9,565,001 9,570,000 9,569,999
1 10,700,001 10,705,000 10,700,026
1 11,725,001 11,730,000 11,730,000
1 14,065,001 14,070,000 14,068,000
1 24,060,001 24,065,000 24,062,125
1,883 110,590,546

S. No. Categories of shareholders Shares held Percentage

2.3.1 Directors, Chief Executive Officer, and their spouse and minor childern 42,588,656 38.5102%
2.3.2 Associated Companies, undertakings and related parties. ( Parent Company) 0 0.0000%
2.3.3 NIT and ICP 1,500 0.0014%
2.3.4 Banks Development Financial Institutions, Non Banking Financial Institutions. 2,300 0.0021%
2.3.5 Insurance Companies 0 0.0000%
2.3.6 Modarabas and Mutual Funds 261,000 0.2360%
2.3.7 Share holders holding 10% or more 49,860,125 45.0853%
2.3.8 General Public 64,655,179 58.4636%
1 - Local 500 0.0005%
2 - Foreign
2.3.9 Others (to be specified)
1 - Joint Stock Companies 1,659,927 1.5010%
2 - Pension Funds 383,523 0.3468%
3 - Investment Companies 30,600 0.0277%
4 - Leasing Companies 24,010 0.0217%
5 - Investment Companies 11,012 0.0100%
6 - Others 972,339 0.8792%

112 Nimir Industrial Chemicals Ltd.

Categories of Shareholding required under Code of
Corporate Governance (CCG) AS AT JUNE 30, 2022
S. No. Name No. of Shares Held Percentage

Associated Companies, Undertakings and Related Parties : - -

Mutual Funds :
1 CDC Trustee First Capital Mutual Fund (CDC) 5,000 0.00452
2 Golden Arrow Selected Stocks Fund Limited (CDC) 255,000 0.23058

Directors and their Spouse and Minor Children :

1 Mr. Zafar Mahmood (CDC) (Chief Executive Officer) 24,062,125 21.7578

2 Mr. Amir Jamil (CDC) 6,482,750 5.8619
3 Mr. Saeed Uz Zaman (CDC & Physical) 310,781 0.2810
4 Mr. Javed Saleem Arif (CDC) 500 0.0005
5 Mrs. Parveen Akhtar Malik (CDC) 500 0.0005
6 Mr. Tariq Ahmed Khan (CDC) 1,000 0.0009
7 Mr. Imran Afzal (CDC) 11,730,000 10.6067
8 Mr. Abdul Jaleel Shaikh (Nominee - PBICL) - 0.0000
9 Mr. Saqib Anjum (CDC) 1,000 0.0009

Executives: 32,970,026 29.8127

Public Sector Companies & Corporations : - -

Banks, Development Finance Institutions, Non Banking Finance Companies, Insurance

410,833 0.3715
Companies, Takaful, Modarabas and Pension Funds :

S. No. Name Holding %

1 Mr. Zafar Mahmood (CDC) (Chief Executive Officer) 24,062,125 21.7578

2 Mr. Khalid Mumtaz Qazi (CDC) 14,068,000 12.7208
3 Mr. Imran Afzal (CDC) 11,730,000 10.6067
4 Mr. Muhammad Yahya Khan (CDC) 10,700,026 9.6754
5 Mr. Nadeem Nisar (CDC) 9,569,999 8.6535
6 Mrs. Shaheen Nadeem (CDC) 8,511,750 7.6966
7 Mr. Umar Iqbal (CDC) 8,182,500 7.3989
8 Mr. Amir Jamil (CDC) 6,482,750 5.8619

All trades in the shares of the listed company, carried out by its Directors, Executives and their spouses and minor children
shall also be disclosed :

S. No. Name Sale Purchase

1 Tariq Ahmad Khan - 500

2 Salman Azamat - 19,500

Annual Report 2022 113

Notice of 29th Annual General Meeting
FOR THE YEAR ENDED JUNE 30, 2022

Notice is hereby given that the 29th Annual General Meeting (“AGM”) of Nimir Industrial Chemicals Limited (the “Company”) will be held on
Friday, October 28, 2022 at 11:00 a.m., at Qaser-e-Sultan, Lahore – Faisalabad By-pass, near Housing colony, Sheikhupura to transact the fol-
lowing business:

ORDINARY BUSINESS:

1. To receive, consider and adopt the Audited Financial Statements (Standalone & Consolidate) of the Company for the year ended June 30,
2022 together with Chairman’s review, the reports of the Directors’, Statement of Compliance (CCG) and Independent Auditors’ reports
thereon.

2. To approve the payment of final cash dividend of Rs. 1.50 per share (i.e. 15%) in addition to the interim dividend of Rs. 1.0 per share
(i.e. 10%), in total Rs. 2.50 per share (i.e. 25%) cash dividend for the year ended June 30, 2022.

3. To appoint Auditors for the year ending June 30, 2023 and fix their remuneration. The members are hereby given the notice that the
Audit Committee and the Board of Directors have recommended the re-appointment of retiring auditors M/s EY Ford Rhodes – Chartered
Accountants as auditors of the Company.

By Order of the Board

Sheikhupura Muhammad Inam-ur-Rahim

October 7, 2022 (Company Secretary)

Notes:

I. Due to COVID-19 situation, the Government has suspended large public gatherings at one place. Additionally, Securities and Exchange
Commission of Pakistan (SECP) in terms of its Circular No. 5 issued on March 17, 2020 and Pakistan Stock Exchange Limited (PSX)
through it notice Ref. PSX/N-372 dated March 19, 2020 had advised companies to modify their usual planning for general meetings for
the safety and well-being of shareholders and the public at large.

Considering the SECP’s directives, the Company intends to convene this AGM with minimal physical interaction of shareholders while en-
suring compliance with the quorum requirements and requests the members to consolidate their attendance and voting at AGM through
proxies.

Shareholders interested to participate in the AGM are requested to share below information at corporate@nimir.com.pk for their ap-
pointment and proxy’s verification by or before Wednesday, October 19, 2022 by 05:00 p.m.

Folio No. / CDC

Name of Shareholder CNIC No. Cell No. Email Address
Account No.

Shareholders who will be registered, after necessary verification as per the above requirement, will be provided a password protected
video link by the Company via email. The said link will be open from 11:00 am at the date of AGM till the end of the meeting. Sharehold-
ers can also provide their comments and questions for the agenda items of AGM at corporate@nimir.com.pk by or before Wednesday,
October 19, 2022 by 05:00 p.m.

II. The share transfer books of the Company shall remain closed from October 22, 2022 to October 28, 2022 (both days inclusive). Transfers
received in order at the office of the Company’s shares registrar at the close of business on Friday, October 21, 2022 will be treated in time
for the purpose of entitlements of final cash dividend and to attend and vote at the AGM.

III. A member eligible to attend and vote at this meeting is entitled to appoint another member as his/her proxy to attend and vote instead
of him/her. A proxy must be a member of the Company and shall produce his/her original Computerized National Identity Card (CNIC) or
passport at the time of meeting. Proxies in order to be effective must be received at the registered office of the Company not later than
forty-eight (48) hours before the time of holding the meeting.

IV. The corporate shareholders shall nominate someone to represent them at the AGM. The nominations, in order to be effective must be
received by the Company not later than forty-eight (48) hours before time of holding the meeting.

114 Nimir Industrial Chemicals Ltd.

V. Any individual beneficial owner of Central Depository Company of Pakistan Limited (CDC), entitled to attend and vote at this meeting,
must bring his/her original CNIC or passport, Account and participants’ I.D numbers to prove his/her identity, and in case of proxy must
enclose an attested copy of his / her CNIC or passport. Representatives of corporate members should bring the, Board resolution/power
of attorney with specimen signature (unless it had been provided earlier) along with the proxy form to the Company.

VI. All shareholders who have not yet submitted the valid copies of CNIC and NTN Certificate(s) are requested to send the copies of the
same to the Shares Registrar. Shareholders of the Company who holds shares in scrip-less form on CDC are requested to submit/send
valid copies of CNIC and NTN Certificate(s) directly to their CDC participant (brokers)/CDC Investor Account Services.

VII. Shareholders desiring to claim exemption from Zakat deduction may file their Declaration before the closing date of the books i.e., October
16, 2020, duly attested by Oath Commissioner on Stamp paper to Company’s Share Registrar, otherwise Company shall have to deduct
Zakat according to the Zakat and Ushr Ordinance, 1980; and Shareholders are also requested to immediately notify change in address, if
any, to the Company’s Share Registrar, at the following address:

M/s Corplink (Pvt.) Limited

Wings Arcade, 1-K (Commercial), Model Town, Lahore.
Tel : 042 35916714, 35916719, 35839182. Fax : 042 35869037.
www.corplink.com.pk

Submission of CNIC - (Mandatory)

With reference to the notification of Securities and Exchange Commission of Pakistan (SECP), SRO 779(I)/2011, dated August 18, 2011, the
Members/Shareholders who have not yet submitted photocopy of their valid Computerized National Identity Card (CNIC) to the Company are
required to send the same at the earliest directly of the Company’s Share Registrar, M/s Corplink (Pvt.) Limited.

Kindly comply with the request, in case of non-receipt of the copy of valid CNIC and non-compliance of the above-mentioned SRO of SECP,
the Company may be constrained to withhold dividends in the future.

Shareholders are requested to promptly notify any change of address to the Company’s Share Register (for Physical shares) or to their respec-
tive participant / broker (for CDS shares) as the case may be.

Deduction of withholding Income Tax / Zakat on the amount of Dividend

Pursuant of the provisions of Finance Act, 2022 effective from July 1, 2022, the deduction of income tax from the dividend payments shall be
made on the bases of filer and non-filers as follows:

S. No. Nature of shareholders Rate of deduction

1 Filers of Income Tax Return 15%
2 Non-Filers of Income Tax Return 30%

Shareholders seeking exemption from deduction of income tax or are eligible at a reduced rate are requested to submit a valid tax certificate
or necessary documentary evidence as the case may be. Shareholders desiring non-deduction of Zakat are also requested to submit a valid
declaration for non-deduction of Zakat.

The shareholders who have joint shareholdings held by filers or Non-filers shall be dealt separately. If the shares are not ascertainable then each
account holder will be assumed to hold equal proportion of shares and deduction will be made accordingly.

Payment of Cash Dividend through Electronic Mode (IBAN format)

In accordance with the Section 242 of the Companies Act, 2017 cash dividend can only be paid through electronic mode directly into the re-
spective bank account designated by the entitled Shareholders. Shareholders are requested to provide their bank account details (IBAN format)
to our share registrar (for Physical shares) or to their respective participant / broker (for CDS shares) as the case may be. The subject Form is
available at Company’s website i.e. www.nimir.com.pk. In case of unavailability of IBAN, the Company would be constrained to withhold dividend
in accordance with the Companies (Distribution of Dividends) Regulations, 2017.

Annual Report 2022 115

Notice of 29th Annual General Meeting
FOR THE YEAR ENDED JUNE 30, 2022

Availability of Audited Financial Statements on Company’s Website

In accordance to Section 223 and 237 of the Company Act, 2017, the audited financial statements of the Company for the year ended June 30,
2022 have been made available on the Company’s website www.nimir.com.pk/nicl/financial _ reports.html, in addition to annual and quarterly
financial statements for the prior years.

Video Conference Facility

Pursuant to the provisions of the Companies Act, 2017 the shareholders residing in other cities and holding at least 10% of the total paid up capital
may demand the Company to provide the facility of video link for participation in the meeting. The demand for video-link facility shall be received
at Shares Registrar address given hereinabove at least 7 days prior to the date of AGM.

Deposit of Physical Shares in to CDC Account:

As per Section 72 of the Companies Act, 2017 every existing listed company shall be required to replace its physical shares with book-entry form
in a manner as may be specified and from the date notified by the Commission, within a period not exceeding four years from the commencement
of this Act, i.e., May 30, 2017. The Shareholders having physical shareholding are encouraged to open CDC sub - account with any of the brokers
or Investor Account directly with CDC to place their physical shares into scrip less form, this will facilitate them in many ways, including safe
custody and sale of shares, any time they want, as the trading of physical shares is not permitted as per existing regulations of the Pakistan Stock
Exchange Limited.

116 Nimir Industrial Chemicals Ltd.

Form of Proxy 29th Annual General Meeting
The Company Secretary Ledger Folio/CDC A/C No.
Nimir Industrial Chemicals Limited
14.8 K.M. Sheikhupura - Faisalabad Road, Shares Held
Bhikhi – Dist. Sheikhupura,
Pakistan.

I / We ………………………………………………………………………………………………………………… of

………………..……………..…………………………..……………………………………………….………………... being member(s) of

Nimir Industrial Chemicals Limited hereby appoint .…………...........................………………………………….…….. of

…………...............………...……… as my/our proxy to vote for me / us ………………………………………….... on my / our behalf at the

Annual General Meeting (AGM) of the Company held on Friday, October 28, 2022 at 11:00 a.m. and / or at any adjournment thereof or any ballot to

be taken in consequence thereof.

Signed this ……….………………….. day of ……………………………..… 2022.

Signature of Shareholder
(The signature should agree with the specimen
registered with the Company)
WITNESSES:

1. ________________________ 2. _______________________

Name : ______________________ _______________________

Fifty Rupees
CNIC : _______________________ _______________________
Revenue Stamp
Address: _____________________ _______________________

Date: ______________________ _______________________

Notes:
i. The share transfer books of the Company shall remain closed from October 22, 2022 to October 28, 2022 (both days inclusive).
Transfers received in order at the office of the Company’s shares registrar at the close of business on Saturday, October 21, 2022 will
be treated in time for purpose of determine the entitlements to attend and vote at the AGM.
ii. A member eligible to attend and vote at this meeting is entitled to appoint another member as his/her proxy to attend and vote instead
of him/her. A proxy must be a member of the Company and shall produce his/her original Computerized National Identity Card (CNIC)
or passport at the time of meeting. Proxies in order to be effective must be received at the registered office of the Company not later
than forty eight (48) hours before the time of holding the meeting.
iii. If a member appoints more than one proxy and more than one instruments of proxy are deposited by a member with the Company,
all such instruments of proxy shall be rendered invalid.
iv. The corporate shareholders shall nominate someone to represent them at the AGM. The nominations, in order to be effective must be
received by the Company not later than forty eight (48) hours before time of holding the meeting. Representatives of corporate members
should bring the, Board resolution/power of attorney with specimen signature (unless it had been provided earlier) along with the proxy
form to the Company.
v. Any individual beneficial owner of Central Depository Company of Pakistan Limited (CDC), entitled to attend and vote at this meeting,
must bring his/her original CNIC or passport, Account and participants’ I.D numbers to prove his/her identity, and in case of proxy
must enclose an attested copy of his / her CNIC or passport.

Annual Report 2022 117

 vi. All Shareholders of the Company who holds shares in scrip-less form on CDC are requested to submit/send valid copies of CNIC and
NTN Certificate(s) directly to their CDC participant (brokers)/CDC Investor Account Services. Physical Shareholders who had not yet
submitted the valid copies of CNIC and NTN Certificate(s) are requested to send the copies of the same to the Company’s Shares
Registrar.
vii. All CDC Shareholders are requested to immediately notify change in address, if any directly to their CDC participant (brokers)/CDC
Investor Account Services. Physical Shareholders are requested to immediately notify change in address, if any, to the Company’s
Share Registrar, at the following address:

M/s Corplink (Pvt.) Limited

Wings Arcade, 1-K (Commercial), Model Town, Lahore.
Tel : 042 35916714, 35916719, 35839182. Fax : 042 35869037.
www.corplink.com.pk

NIMIR INDUSTRIAL CHEMICALS LTD.

14.8 Km., Sheikhupura-Faisalabad Road, Posted Stamp
Bhikhi, District Sheikhupura, Pakistan.
Ph: +92 56 3883001-7 • Fax: +92 56 3883010
Cell: +92 301 8221151, 301 8483950
www.nimir.com.pk
 

 
 
  


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