faisalabad - pakistan

FA ISALABAD - PAK ISTANFA ISALABAD - PAK ISTAN

01Annual Reportfor the year ended December 31, 2017

ContentsCompany InformationNotice of MeetingVision, Mission StatementCore ValuesDirectors’ ProfileForward-Looking StatementsHorizontal Analysis - P&L and B/SVertical Analysis - P&L and B/SDirectors’ ReportStakeholders’ InformationSummary of Cash Flow StatementsComments on Analysis ResultsDuPont AnalysisQuarterly AnalysisSensitivity Analysis and Statement of Value AddedReview Report to the MembersStatement of ComplianceAuditors’ Report to MembersBalance SheetProfit and Loss AccountStatement of Comprehensive IncomeCash Flow StatementStatement of Changes in EquityNotes to the Financial StatementsPattern of ShareholdingDirectors' Report in UrduRequest Form for Dividend MandateRequest Form for Hard Copy of Financial StatementsProxy FormProxy Form in Urdu

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CompanyInformation

Board of Directors

Chairman

Pierre Perez y Landazuri Non-Executive

Chief Executive & Managing Director

Usman Qayyum Executive

ChairmanMemberMember

Member

Member

Chief Financial OfcerMuhammad Asdaf

SecretaryM. Yasin Anwar

Audit CommitteeZulkar MannooJames D. Gray

Christine M. Castellano

Marcel Hergett

Anis Ahmad Khan

ChairmanMember

Member

Member

Human Resource & Remuneration CommitteeJorgen Kokke

Pierre Perez y Landazuri

Usman QayyumZulkar Mannoo

Members:

James D. GrayJorgen Kokke

Christine M. CastellanoMarcel Hergett

Zulkar MannooMian M. Adil Mannoo

Wisal A. MannooMuhammad AsdafAnis Ahmad Khan

Non-ExecutiveNon-Executive

Non-Executive

Non-ExecutiveNon-ExecutiveNon-Executive

Non-ExecutiveExecutive

Independent &

Non-Executive

Chairman

Member

Member

Shares Transfer CommitteeUsman Qayyum

Muhammad Asdaf

Anis Ahmad Khan

BankersCitibank, N.A.

Habib Bank Ltd.

Meezan Bank Ltd.

MCB Bank Ltd.MCB Islamic Bank Ltd.

National Bank of PakistanStandard Chartered Bank (Pakistan) Ltd.

Auditors

KPMG Taseer Hadi & Co.

Chartered Accountants

Lahore – Karachi

Legal Advisor

M. Ali Seena

C/o Surridge & Beecheno,

Karachi-74000

Shares Registrar

FAMCO Associates (Pvt.) Ltd.8-F, Next to Hotel Faran, Nursery,

Block-6, P.E.C.H.S., Shahrah-e-Faisal,Karachi-75400

Tel:(92-21) 34380101-5Fax: (92-21) 34380106

Email: [email protected]

Registered Ofce & Shares Department

Rakh Canal East Road, Faisalabad,Ph: (92-41) 8540121-22-23

Fax: (92-41) 8711016 - 8502197Website: www.rafhanmaize.com

E-mail: [email protected]

Plants:

Rakh Canal Plant:

Rakh Canal East Road,Faisalabad-38860.

Ph: (92-41) 8540121-22-23

Cornwala Plant:

5-KM Jaranwala-Khurrianwala Road,

Jaranwala - 37250.

Ph: (92-41) 4710121 & 23-27

Mehran Plant:

K.B. Feeder Road, Kotri,

Jamshoro-76090.

Ph: (92-223) 870894 - 98

02 Annual Report for the year ended December 31, 2017


Notice of Meeting

Notice is hereby given that the 127th General Meeting (Annual Ordinary) of the shareholders of Rafhan Maize Products Co. Ltd. will be held on Thursday, March 29, 2018 at 10:00 a.m. at Royalton Hotel, P-12, West Canal Road, Abdullahpur, Faisalabad to transact the following business:

1.

2.

3.

4.

To confirm minutes of the last General Meeting (Annual Ordinary) of the shareholders of the Company held on Wednesday, March 29, 2017 at Karachi.

To receive, consider and adopt the Audited Financial Statements of the Company for the year ended December 31, 2017 together with the Directors' and Auditors' Reports thereon.

To approve final cash dividend @ 1250 % for the year ended December 31, 2017 as recommended by the Board of Directors.

To appoint auditors and fix their remuneration. The present auditors Messrs KPMG Taseer Hadi & Co., Chartered Accountants, retire and being eligible, offer themselves for re-appointment. The Board of Directors, on recommendations of the Audit Committee, has proposed appointment of Messrs KPMG Taseer Hadi & Co., Chartered Accountants for the year 2018.

By order of the Board

M. Yasin AnwarCompany Secretary &

Manager Corporate Affairs

FaisalabadMarch 8, 2018

Notes:

1. The Share Transfer Books of the Company will remain closed from 22nd March to 29th March, 2018 (both days inclusive) and no transfer will be accepted for registration during this period.

2.

3.

4.

A member entitled to attend, speak and vote at the meeting shall be entitled to appoint another person as his/her proxy to attend, speak and vote instead of him/her, and a proxy so appointed shall have such rights with respect to attending, speaking and voting at the meeting as are available to a member. Proxies in order to be effective must be received by the Company not less than 48 hours before the meeting. A proxy need not be a member of the Company. Form of proxy is attached.

Physical Shareholders are requested to notify change of address, if any, to the Company's Shares Registrar immediately.

CDC shareholders desiring to attend the meeting are requested to bring their original Computerized National Identity Cards, Account and Participant's ID numbers, for identification purpose, and in case of proxy, to enclose an attested copy of his/her CNIC.

IMPORTANT NOTES TO SHAREHOLDERS

Please go through the following notes. It will be appreciated if you please respond to your relevant portion at the earliest -

Pursuant to the directives of the SECP, CNIC number is mandatorily required to be mentioned on dividend warrants. The Company is now unable to comply with SRO 831(1)/2012 dated 5 July 2012 of SECP and, therefore, constrained to withhold dispatch of dividend warrants of non-compliant shareholders. A list of such shareholders is available on Company's website www.rafhanmaize.com. Please submit a copy of your valid CNIC (only Physical Shareholders), if not already provided to the Shares Registrar of the Company. Corporate account holders should submit National Tax Number, if not yet submitted.

CNIC No.


In accordance with the provisions of Section 242 of the Companies Act, 2017, a listed company, is required to pay cash dividend to the shareholders ONLY through electronic mode directly into the bank account designated by the entitled shareholders.

In order to receive dividends directly into their bank account, shareholders are requested to fill in Dividend Mandate Request Form available at Company's website www.rafhanmaize.com and send it duly signed along with copy of CNIC to the Shares Registrar of the Company, in case of physical shares. In case the shares are held in CDC then the Form must be submitted directly to shareholder's broker/participant/CDC Account Services.

In case of non-receipt of the above information the Company will be constrained to withhold payment of dividend to such shareholders.

Annual Financial Statements of the Company for the financial year ended December 31, 2017 have been placed on the Company's website –

Securities & Exchange Commission of Pakistan (SECP) vide its SRO No.470(1)/2016 dated May 31, 2016 has allowed companies to circulate the Annual Balance Sheet, Profit and Loss Account, Auditors' Report and Directors' Report etc. (“Annual Audited Financial Statements”) along with notice of general meeting to its members through CD/DVD/USB at their registered addresses.

However, Shareholders who wish to receive the hard copy of Annual Audited Financial Statements along with notice of general meeting shall have to fill the request form which is available at Company's website www.rafhanmaize.com and send it to our Shares Registrar or Company Secretary at their respective mailing addresses given at the end of this notice.

As per the provisions of Section 244 of the Companies Act, 2017, any shares issued or dividend declared by the company which have remained unclaimed/unpaid for a period of three years from the date it was due and payable are required to be deposited with the Commission for credit of the Federal Government after issuance of notices to the shareholders to file their claim. The details of the shares issued and dividend declared by the company which have remained unclaimed/unpaid for a period of three years from the date these have become due and payable are available on Company's website www.rafhanmaize.com. The Company has also issued notices to shareholders to lodge their claim within 90 days of notice to Company/Shares Registrar. Shareholders are requested to ensure that their claims for unclaimed shares/unpaid dividends are lodged timely. In case no claim is received within the given period, the company shall, after giving final notice in the newspaper, proceed to deposit the unclaimed/unpaid amount with the Federal Government pursuant to the provisions of sub-section 2 of section 244 of the Act.

Pursuant to the provisions of the Finance Act, 2017, effective July 1, 2017, the rates of deduction of withholding tax from dividend payments under the Income Tax Ordinance have been revised as under:

To enable the Company to make tax deduction on the amount of cash dividend @15% instead of 20%, all the shareholders whose names are not entered into the Active Taxpayers List (ATL) provided on the website of FBR, despite the fact that they are filers, are advised to make sure that their names are entered into ATL before the date for payment of any future cash dividend otherwise tax on their cash dividend will be deducted @20% instead of 15%.

Further, according to clarification received from Federal Board of Revenue (FBR), with-holding tax will be determined separately on 'Filer/Non-Filer' status of Principal shareholder as well as joint-holder (s) based on their shareholding proportions, in case of joint accounts.

Dividend Mandate/E-Dividend

Circulation of Annual Audited Financial Statements via CD/USB/DVD

Unclaimed Shares/Unpaid Dividend

Deduction of Income Tax from Dividend under Section 150

For filers of income tax returns 15% For non-filers of income tax returns 20%


In this regard, all shareholders who hold shares jointly are requested to provide shareholding proportions of Principal shareholder and Joint-holder(s) in respect of shares held by them, if not provided yet, to our Shares Registrar at the earliest, in writing as follows, otherwise it will be assumed that shares are equally held:

In another clarification by Federal Board of Revenue, valid tax exemption certificate for claim of exemption U/S 150, 151 and 233 of the Income Tax Ordinance, 2001 is required where statutory exemption under Clause 47B of Part-IV of the Second Schedule is available. Such certificate U/S 159(1) of the Income Tax Ordinance, 2001 issued by concerned Commissioner of Inland Revenue is to be produced to avail tax exemption.

For any query/problem/information, the investors may contact the Company and/or the Shares Registrar at the phone numbers/email addresses given at the end of this notice.

The corporate shareholders having CDC accounts are required to have their National Tax Number (NTN) updated with their respective participants, whereas corporate physical shareholders should send a copy of their NTN certificate to the Company or its Shares Registrar M/s FAMCO Associates (Pvt.) Ltd. The shareholders while sending NTN or NTN certificates, as the case may be, must quote Company name and their respective folio numbers.

Members can also avail video conference facility at Lahore and Karachi. In this regard, please fill the following request and submit to registered address of the Company 10 days before holding of general meeting.

If the company receives consent from members holding in aggregate 10% or more shareholding residing at ageographical location, to participate in the meeting through video conference at least 10 days prior to date ofmeeting, the company will arrange video conference facility in that city subject to availability of such facility in that city.

The Company will intimate members regarding venue of video conference facility at least 5 days before the date of general meeting along with complete information necessary to enable them to access such facility.

I/We, _____________________ of ____________________ being a member of Rafhan Maize Products Co. Ltd.,

holder of ____________ Ordinary Shares as per Registered Folio No.____________ hereby opt for video conference

facility at ____________.

Company Name Folio/CDS A/C #

Total Shares

Principal Shareholder Joint Shareholder Name & CNIC # Share-

holding Propor -

tion (No. of Shares)

Name & CNIC #

Share-holding Propor -

tion (No. of Shares)

___________________ Signature of Member

Company Contact: Mr. M. Yasin Anwar Company Secretary & Manager Corporate Affairs Rafhan Maize Products Co. Ltd., Rakh Canal East Road, Faisalabad. Tel.No.041-8540121-23 – Ext.206 & 348 Email: [email protected]

Shares Registrar: Mr. Fakhar Abbasi M/s FAMCO Associates (Pvt.) Ltd, 8-F, Next to Hotel Faran, Nursery, Block-6, PECHS, Shahrah-e-Faisal, Karachi. Tel.No.021-34380101-05 Ext.118 Email: [email protected]

Consent for Video Conference Facility

Vision

To be the Premier Provider of Rened Agriculturally based Products and

Ingredients in the Region.

Mission Statement

To grow business consistently through positive relationshipwith customers to attain full customer satisfaction and to

bring continual improvement by adopting only those business practices which add value to our customers,

employees and shareholders.



Our

Core

Values

Safety

Nothing is more

important

Our goal:

Zero accidentsQuality

Of the products

we make, the services

we provide, the

relationships

we build

Innovation

Continue to nd new

customer solutions and

share those

breakthroughs

around the

Ingredion world

Integrity

Honesty & trust are

the foundation of our

business

We will maintain the

highest standards

of conduct

Excellence

We will relentlessly

pursue excellence in all

that we do and give

employees the

resources they

need to excelRespect

We promote openness,

teamwork,

trust and mutual

cooperation


He joined the Board of Rafhan Maize as Chairman on August 12, 2016. He is also a member of the Board's Human Resource and Remuneration Committee and represents Ingredion Incorporated, the parent company, on the Board. At Ingredion, he is Senior Vice President and President General Manager, EMEA since January 1, 2018. He is also a member of Ingredion Incorporated Executive Leadership Team.

He holds Master's degree in Chemical Engineering from the Chimie Paris Tech, Paris, France.

Office AddressIngredion GmbH, Gruner Deich-110,20097 Hamburg,Germany.

PIERRE PEREZ y LANDAZURIChairmanNon-Executive Director

He joined the Board on February 24, 2016. He represents Ingredion Incorporated, the parent company, on the Board. At Ingredion, he is Executive Vice President Global Specialties, and President, North America since February 5, 2018. Mr. Kokke also served as Vice President and General Manager at Asia-Pacific from January 6, 2014 to September 15, 2014 and as President of Asia-Pacific from September 16, 2014 to January 1, 2016. He is also a member of Ingredion Incorporated Executive Leadership Team.

He served as Chairman and Non-Executive Director on Rafhan Board from March 8, 2011 to April 12, 2014. He holds a Master's degree in Economics from the University of Amsterdam.

Office AddressIngredion Incorporated,5 Westbrook Corporate Center,Westchester, IL 60154, U.S.A.

JORGEN KOKKENon-Executive Director

He joined the Board on July 4, 2017. He is also a member of the Board's Audit Committee. He represents Ingredion Incorporated, the parent company, on the Board. At Ingredion, he is Executive Vice President and Chief Financial Officer since March 1, 2017. Prior to that, he served as Vice President, Corporate Finance and Planning, North America from 2014 to March 1, 2017. He is also a member of Ingredion Incorporated Executive Leadership Team.

Prior to joining Ingredion, he worked for PepsiCo in several positions, including Chief Financial Officer, Gatorade and Propel Business; Vice President, Franchise Business; and Vice President, Merger Transformation.

Mr. Gray holds a Bachelor's degree in Business Administration from the University of California, Berkeley and graduated with distinction with a Master's degree in Business Administration from the Kellogg School of Management, Northwestern University in Evanston, Illinois.


JAMES D. GRAYNon-Executive Director

She joined the Board in 2013. She represents Ingredion Incorporated, the parent company, on the Board. She is also a member of Rafhan Maize Board's Audit Committee. At Ingredion, she is Senior Vice President, General Counsel, Corporate Secretary and Chief Compliance Officer since April 1, 2013. She is also a member of Ingredion Incorporated Executive Leadership Team.

She holds a Bachelor's degree in political science from the University of Colorado and a Juris Doctor degree from the University of Michigan School of Law.


CHRISTINE M. CASTELLANONon-Executive Director

Directors' Prole

He joined the Board of Rafhan Maize on August 12, 2016 and represents Ingredion Incorporated, the parent company. At Ingredion, he is Director Finance EMEA since February 1, 2016. He holds a University Degree of Accountancy and Tax from University of Cologne, Albertus-Magnus-Platz, Koln, Germany.

Office AddressIngredion GmBH, Gruner Deich-110,Hamburg-20097,Germany.

MARCEL HERGETTNon-Executive Director

He joined the Board on March 31, 2016. In Rafhan Maize, he started his career as Director, Business Development and Specialty on January 1, 2015 and promoted as Chief Operating Officer on December 01, 2015.

He is also a member of the Board's Human Resource & Remuneration Committee and Chairman Shares Transfer Committee.

He holds a Master's Degree in Business Administration from the Institute of Business Administration at the University of the Punjab, Lahore. He also holds a Bachelor's Degree in Electrical Engineering from the University of Engineering and Technology, Lahore.

Office AddressRafhan Maize Products Co. Ltd.,Rakh Canal East Road,Faisalabad.

USMAN QAYYUMChief Executive & Managing Director

He joined the Board on September 21, 2017. He is FCA with over 25 years of experience in diversified business disciplines. Presently he is holding the position of Chief Financial Officer of the Company.

He is also a member of the Board's Shares Transfer Committee.

Office AddressRafhan Maize Products Co. Ltd.,Rakh Canal East Road,Faisalabad.

MUHAMMAD ASDAF Executive Director

He joined the Board in 1990. He is alumni of The Wharton School, University of Pennsylvania and Aitchison College, Lahore. He is Chairman of the Board's Audit Committee and also member of Human Resource & Remuneration Committee. He represents minority shareholders on the Board.

He also holds directorship of Unilever Pakistan Foods Ltd and is Chairman of its Audit Committee.

Office AddressPakwest Industries (Pvt.) Ltd.,1st Floor, Ghani Chambers,Patiala Ground, Link McLeod Road,Lahore.

ZULFIKAR MANNOONon-Executive Director

Executive Director


Directors' Prole


Directors' Prole

He joined the Board in 1985. He is graduate and alumni of Aitchison College, Lahore. He is engaged in textile business for the last 25 years. He represents minority shareholders on the Board.

He also holds directorship of Unilever Pakistan Foods Ltd.

Office AddressH.N. Enterprises Rakh Canal East Road,Opp: Rafhan Maize Products Co. Ltd.,Faisalabad.

MIAN M. ADIL MANNOONon-Executive Director

He joined the Board in 2006. He is engaged in textile business for the last 25 years. He represents minority shareholders on the Board.

He is also a Member of Executive Committee of All Pakistan Textile Mills Association (APTMA).

Office AddressWisal Kamal Fabrics11E-2, Main Gulberg, Lahore.

WISAL A. MANNOO Non-Executive Director

Mr. Anis Ahmad Khan, a Business Executive, joined the Board in 2015. He is also a member of Rafhan Maize Board's Audit Committee and Shares Transfer Committee. He served Rafhan Maize from 1995 to 2012. His last title was Chief Financial Officer and Director. He remained on Rafhan Board from 1998 to 2012. He was admitted as Fellow Member in 1986 by the Institute of Cost and Management Accountants of Pakistan.

Besides 18 years' service in Rafhan, he has wide range of experience in the fields of Cost Management and Finance by working in various local as well as international companies.

Office Address:H. No.P-245, Khayaban Colony No.2,Faisalabad.

ANIS AHMAD KHANIndependent Director


Forward Looking Statements

This Annual Report contains or may contain forward-looking statements. The Company intends these forward-looking statements to be covered by the safe harbor provisions for such statements. These statements include among other things any statement regarding the Company's prospects or future financial condition, earnings, revenues, tax rates, capital expenditures, expenses or other financial items, any statements concerning the Company's prospects or future operations, including management's plans or strategies and objectives therefore and any assumptions, expectations or beliefs underlying the foregoing. These statements can sometimes be identified by the use of forward looking words such as “may,” “will,” “should,” “anticipate,” “believe,” “plan,” “project,” “estimate,” “expect,” “intend,” “continue,” “proforma,” “forecast” or other similar expressions or the negative thereof. All statements other than statements of historical facts in this report or referred to in or incorporated by reference into this report are “forward-looking statements.” These statements are based on current expectations, but are subject to certain inherent risks and uncertainties, many of which are difficult to predict and are beyond our control. Although we believe our expectations reflected in these forward-looking statements are based on reasonable assumptions, stakeholders are cautioned that no assurance can be given that our expectations will prove correct. Actual results and developments may differ materially from the expectations expressed in or implied by these statements, based on various factors, including the effects of global economic conditions, and their impact on our sales volumes and pricing of our products, our ability to collect our receivables from customers; fluctuations in markets for corn and other commodities, cheaper import price of starches and sweetener, fluctuations in the markets and prices for our co-products, particularly corn oil and Feed; fluctuations in aggregate industry supply and market demand; the behavior of financial markets, including foreign currency fluctuations and fluctuations in interest and exchange rates; the commercial and consumer credit environment; general political, economic, business, market and weather conditions in the various geographic regions within Pakistan and in countries in which we sell our products; future financial performance of major industries which we serve, including, without limitation, the food and beverage, pharmaceuticals, paper, corrugated, textile and brewing industries; energy costs and availability, freight and shipping costs, and changes in regulatory controls regarding tariffs, duties, taxes and income tax rates; operating difficulties; availability of raw materials, including specific varieties of corn upon which our products are based; energy issues in Pakistan; our ability to effectively integrate and operate businesses; our ability to achieve budgets; our ability to complete planned maintenance and investment projects successfully and on budget; genetic and biotechnology issues; changing consumption preferences including those relating to liquid glucose; increased competitive and/or customer pressure in the starch processing industry; and the outbreak or continuation of serious communicable disease or hostilities including acts of terrorism. Our forward-looking statements speak only as of the date on which they are made and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of the statement as a result of new information or future events or developments. If we do update or correct one or more of these statements, investors and others should not conclude that we will make additional updates or corrections.


Horizontal Analysis of Prot and Loss Account

Sales Cost of sales Gross profitDistribution costAdministrative expensesOperating profitOther operating incomeFinance costOther operating expensesProfit before taxationTaxationProfit after taxation

Property, plant and equipment

Intangible assets

Capital work-in-progress

CURRENT ASSETS Stores and spares Stock in trade Trade debts Loans and advances Trade deposits and prepayments Other receivables Cash and bank balances

TOTAL ASSETS

CURRENT LIABILITIES Trade and other payables Mark up accrued on short term running finances Short term running finances - secured Provision for taxation

NON CURRENT LIABILITIES Deferred taxation

SHARE CAPITAL AND RESERVES Share capital Reserves

TOTAL LIABILITIES & EQUITY

Note: No percentage has been worked out where there were no figures in current or corresponding year.

NON CURRENT ASSETS

EMPLOYEES RETIREMENT BENEFITS

LONG TERM LOANS

Horizontal Analysis of Balance Sheet

2017 2016 2015 2014 2013 2012

2017 2016 2015 2014 2013 2012

3% 3% -2% 6% 21% 7%1% -4% -7% 6% 25% 8%7% 27% 17% 11% 6% 5%9% 101% 12% 16% -39% 152%

14% 4% 15% 11% 5% 19%6% 24% 19% 6% 11% -3%

-4% 13% 55% -48% 119% -5%-12% 17% -87% 102% 3% -3%

2% 31% 11% 20% 6% -3%6% 24% 23% 4% 15% -3%

-9% 38% 7% 52% -25% -8%13% 18% 30% -10% 36% 0%

19% 20% -4% -4% 31% 64%

-100% -63% -84% -48% -32% -11%

-61% -28% 322% 85% -82% -28%

-26% 1543% 100% -100% -67% 16%

-4% 46% 65% 6% -1% 88%

-4% 6% -9% 24% 25% 20%19% 5% 29% -46% 63% 3%14% -2% 11% 17% 4% 38%11% -5% -43% 25% -49% 260%-9% 4% 23% -26% 19% 104%57% -42% 48% -28% 64% 86%

-17% 36% -11% 5336% -89% 704%

2% 12% 13% 8% 16% 25%

52% 9% -5% -14% -2% 92%-100% -61% 157% -100% -56% -2%

0% 0% 0% -100% 0% -100%-9% -26% -45% 131% -49% 10%

-12% 50% -4% -5% 26% 50%

0% 0% 0% 0% 0% 0%-6% 12% 21% 15% 23% 17%

2% 12% 13% 8% 16% 25%

Vertical Analysis of Prot and Loss Account

Sales Cost of sales Gross profitDistribution costAdministrative expensesOperating profitOther operating incomeFinance costOther operating expensesProfit before taxationTaxationProfit after taxation

Property, plant and equipment

Intangible assets


CURRENT ASSETS Stores and spares Stock in trade Trade debts Loans and advances Trade deposits and prepayments Other receivables Cash and bank balances

TOTAL ASSETS

CURRENT LIABILITIES Trade and other payables Mark up accrued on short term running finances Short term running finances - secured Provision for taxation

NON CURRENT LIABILITIES Deferred taxation

SHARE CAPITAL AND RESERVES Share capital Reserves

2017

71.5%100%

28.5%2.5%1.9%

23.3%0.7%0.1%1.6%

23.3%6.4%

16.9%

2016

100%72.5%27.5%2.3%1.7%

22.6%0.8%0.1%1.6%

22.8%7.3%

15.5%

2015

100%77.8%22.2%

1.2%1.7%

18.7%0.7%0.1%1.3%

18.7%5.4%

13.3%

2014

100%81.5%18.5%

1.0%1.4%

15.4%0.5%0.5%1.1%

14.9%4.9%

10.0%

2013

100%82.2%17.8%0.9%1.3%

15.4%0.9%0.2%1.0%

15.2%3.4%

11.7%

2012

100%79.7%20.3%1.9%1.5%

16.9%0.5%0.3%1.2%

16.0%5.5%

10.4%

2017

39.0%

2016

33.5%

2015

31.3%

2014

36.7%

2013

41.2%

2012

36.3%

0.0% 0.0% 0.0% 0.1% 0.1% 0.2%

3.0% 7.9% 12.5% 3.4% 2.0% 12.7%

1.1% 1.5% 0.1% 0.0% 0.1% 0.5%

0.1% 0.1% 0.0% 0.0% 0.0% 0.0%

3.7% 4.0% 4.2% 5.2% 4.6% 4.2%26.1% 22.5% 24.1% 21.1% 42.4% 30.0%6.7% 6.0% 6.9% 7.0% 6.5% 7.2%0.6% 0.5% 0.6% 1.3% 1.1% 2.5%0.8% 0.9% 1.0% 0.9% 1.3% 1.3%0.2% 0.1% 0.2% 0.1% 0.2% 0.2%

18.8% 23.1% 19.1% 24.2% 0.5% 4.9%

100% 100% 100% 100% 100% 100%

100% 100% 100% 100% 100% 100%

20.7% 13.9% 14.4% 17.1% 21.5% 25.2%0.0% 0.0% 0.0% 0.0% 0.0% 0.1%0.0% 0.0% 0.0% 0.0% 0.7% 0.0%0.7% 0.8% 1.3% 2.6% 1.2% 2.8%

5.1% 5.9% 4.4% 5.2% 5.9% 5.4%

0.6% 0.6% 0.6% 0.7% 0.8% 0.9%72.9% 78.8% 79.3% 74.3% 69.9% 65.6%

TOTAL LIABILITIES & EQUITY

Note: No percentage has been worked out where there were no figures in current or corresponding year.

NON CURRENT ASSETS

EMPLOYEES RETIREMENT BENEFITS

LONG TERM LOANS

Vertical Analysis of Balance Sheet



The Directors of your Company feel pleasure in presenting the annual audited Financial Statements along with auditors' report thereon for the year ended December 31, 2017.

Directors' Report

Year ended December 31

2017 2016

Rupees in Thousand

Profit after taxation 4,392,257 3,879,431

Actuarial gains/(losses) of employees retirement benefits (43,543) 158,847

Un-appropriated profit brought forward 12,903,042 11,543,328

17,251,756 15,581,606

Appropriations

Final Dividend 2016 @3000% (2015: @1200%) 2,770,928 1,108,371

1st Interim Dividend 2017 @1000% (2016: @500%) 923,643 461,821

2nd Interim Dividend 2017 @750% (2016: @600%)

(2016: @600%)

692,732 554,186

3rd Interim Dividend 2017 @750% 692,732 554,186

5,080,035 2,678,564

Un-appropriated profit 12,171,721 12,903,042

Earnings per share (rupees) 475.54 420.01

Business Review

Being a pioneer corn refiner in the country, Rafhan has positioned itself as the supplier of choice for the customers we serve. Our strategic and long lasting relationship with our customers is our asset. At Rafhan Maize, our customer focused mindset is the main spirit behind meeting new challenges and achieving excellence in customer experience. We also believe that adherence to our core values is vital for sustainable business success and continuous improvement. Our values always remain an essential part of our culture.

In line with Rafhan Maize philosophy, we are proud of our commitment to excellence in product safety, quality and providing value added products and services to our customers to improve sales and sustain customer confidence.

Our product portfolio consists of a wide range of products that include industrial, food and animal nutrition & health ingredients serving diverse consuming industries including textiles, confectionery, processed food, dairy, ice cream, beverages, pharmaceuticals, paper, corrugation, baking, chemicals, edible oils, poultry, livestock, aquaculture and other industries.

Since its inception, Rafhan Maize has set high standards in all spheres of its business, which have allowed it to drive consistent growth through a deep understanding of customers' needs, execute the most relevant GTM strategies, respond to market needs and build on our competitive capabilities. We have always strived to meet and

Financial ResultsProfit and Appropriations

Operations

The Rafhan management continued to work proactively to meet changing and increasing demands by investing in enhancing capabilities and capacities and by making significant capital investments over the years adopting new technologies and continuously improving product quality and standards. The operational team has constantly focused on optimization and reengineering of manufacturing processes to save energy, protect the environment and to continue to maintain safe working conditions. Rafhan Maize continues to coordinate and integrate the activities of employees, material suppliers and contractors to fulfill the requirements of our customers. The ultimate aim has always been to exceed the expectations of our internal and external customers and create better value for our shareholders.

exceed customers' expectations by delivering new solutions and extended services to our valued customers. We aim to be a real business partner and a solution provider to our customers through improved customer engagement, technical services and a continuing quest to find new ways of doing business. Rafhan Maize has also positioned itself to provide new and extended solutions to its customers not only using its local capabilities and product portfolio but also leveraging knowledge and expertise of its other Ingredion affiliate companies globally.

Safety, Health And Environment

Our safety, health and environment programs continued with strong participation from all our employees and contractors. We continue to have a strong track record of safety and are committed to provide a safe work environment to our employees. A safe working environment is essential to employee motivation and has resulted in enhanced productivity.

Rafhan Maize is committed to various programs designed to protect the environment, such as water conservation and reducing carbon footprints. We are engaged with various internal and community initiatives in this regard.

Business Risks, Challenges And Future Prospects

Although GDP growth in Pakistan has improved in 2017 mainly due to recovery in the agriculture and manufacturing sectors, the government needs to address fiscal and other economic challenges such as growing current account deficit, falling foreign exchange reserves, rising debt obligations, and consequently greater external financing needs.

The economic growth is projected to increase from 5.2 percent in 2017 to 5.5 percent in 2018. However, the current uncertain political environment may dampen confidence and investment in the country.

We continue to have a cautiously optimistic outlook for the business and our focus remains on driving sustainable profitable growth. With our current progress, we are well positioned to continue building our growth platform into 2018 despite challenges in the form of increasing corn cost, rising energy prices and inflationary cost pressures in other areas. Our Company has a track record of overcoming tough business conditions and is prepared to meet these challenges and continue its growth while delivering value to its shareholders.

Corporate Governance

Your Company is fully abreast of all standards and requirements of corporate governance. The Directors are pleased to state that your Company is fully compliant with the provisions of the Code of Corporate Governance 2012 as updated thereafter and formed as part of stock exchange rules and regulations. The statement of compliance with Code of Corporate Governance is reproduced on Page No 27.

Disclosures under Code of Corporate Governance

Corporate and Financial Reporting Framework:

(a) The financial statements, prepared by the management of the listed company, present its state of affairs fairly, gives a true and fair view of the result of its operations, cash flows and changes in equity;

(b) Proper books of accounts of the listed company have been maintained; appropriate accounting policies have been consistently applied in preparation of financial statements and accounting estimates are based on reasonable and prudent judgment;



(c) International Financial Reporting Standards, as applicable in Pakistan, have been followed in preparation of financial statements and any departure therefrom has been adequately disclosed and explained;

(d) The system of internal control is sound in design and has been effectively implemented and monitored; and

(e) There are no significant doubts upon the listed Company's ability to continue as a going concern.

Profit after Tax(Rupees in Million)

2,040

2,781 2,517

3,275

3,879

4,392

2012 2013 2014 2015 2016 2017

500

-

1000

1500

2000

2500

3000

3500

4000

4500

5000

Sales(Rupees in Million)

19,531

23,673

25,197 24,618 25,29826,018

2012 2013 2014 2015 2016 2017

5000

-

10,000

15,000

2,0000

25,000

30,000

2015 2014 2013 20122017

Key operating and financial data of last six years are as follows:

26,018

18,593

7,425

29

6,067

23

6,051

4,392

475.54

5,080

5,500

742

23,673 19,531

19,460 15,557

4,213 3,975

18 20

3,652 3,304

15 17

3,593 3,123

2,781 2,040

25,197

20,540

272.48 301.14 220.86

1,201 1,062

453 1,185

Operating Profit

Profit Before Tax

Earnings Per Share

Dividend Amount

Capital Expenditure

Net Sales

Cost of Sales

Gross Profit

% of Sales

% of Sales

Profit After Tax

Dividend Percentage

Rs. Million

Rs. Million

Rs. Million

Rs. Million

Rs. Million

Rs. Million

Rs. Million

Rs. Million

Rupees

1,300 1,150

2016

25,298

18,345

6,952

28

5,725

23

5,707

3,879

420.01

2,679

2,900

870

24,618

19,164

5,454 4,657

22 18

4,615 3,871

19 15

4,599 3,754

3,275 2,517

354.59

1,293 1,247

1,665 469

1,400 1,350

Resources Management

Most of our ingredients are produced mainly from corn, hence ensuring a reliable and sustainable sourcing of corn is essential. This involves developing long-term, mutually beneficial relationships with growers, farmers and other commercial partners to secure sustainable supply. We maintain exemplary relationships with our suppliers and work with them to meet our customers' requirements for traceability, quality and ethical standards throughout the supply chain. We see ourselves on a critical place in the food security value chain. We are endeavoring to establish best farming practices and assist the farmers in implementing the latest technology for increase in corn yields.

We are serving the farmers community at grass root level and motivating/guiding them on adopting modern agricultural process/techniques. Our team is specifically trained on seed technologies as well as good farm

management practices. We aim to pay fair price to the farmers for their produce and help them to improve their working practices/cultivation techniques.

Investment

Your Company successfully commissioned a 50 TPD Dextrose plant at Cornwala plant, in Punjab, to increase the quality and quantity of one of our mainstream products. The new plant has enabled us to increase our present capacities and shall help us to meet our customers' demand in future. Your Company will continue to pursue our expansion and diversification plans in line with our strategic blueprint. Your Company has number of other capital projects in hand to serve our strategic ambitions. We ensure our strong commitment to serve our customers by investing in capacity building, innovations and new technologies.

Investment Value of Employees Retirement Funds:

Rafhan Maize values its employees. The Company maintains three retirement plans; one defined contribution (Provident Fund) and two defined benefit plans (Gratuity and Superannuation). The Company has established a trust for each fund and the board of trustees is responsible to manage the affairs of the funds. All the three plans are fully funded and total investment in the funds is:

Year ended December 31

2017 2016

Rupees in Thousand

Provident Fund 1,004,701 1,045,266

Gratuity Fund 819,302 810,430

Superannuation Fund 584,441 569,297

As at June 30, 2017

As at December 31, 2017

As at December 31, 2017

Board of DirectorsThe Board is composed of eleven members, two executive and nine non-executive directors, including one independent director. Three non-executive directors represent the minority shareholders on the Board. The Chairman of the Board is also a non-executive director. All the current Board members are listed in the Company Information. All local directors have obtained certification as required under the provisions of Code of Corporate Governance 2017 except Mr. Muhammad Asdaf, who joined the Board on September 21, 2017.

Attendance at Board Meetings

During the year, four meetings of the Board of Directors were held. Two meetings were held in UK and two meetings were held in Pakistan. Attendance of Directors at meetings was as under:

Meetings attended in

person/through

video/audio linkName of Director Joined Resigned


Usman Qayyum

James D. Gray

Jack C. Fortnum

Jorgen Kokke


Marcel Hergett

Zulfikar Mannoo

Mian M. Adil Mannoo

Wisal A. Mannoo

Muhammad Asdaf

Dr. Abid Ali

Anis Ahmad Khan

04-07-2017

21-09-2017

20-06-2017

07-07-2017

4

4

2

2

4

4

4

4

4

4

1

2

4



Transactions in Company's Shares

Directors, Executives, their spouses and minor children have made no transactions in the Company's shares during the year except as stated below -

No. of shares sold/transferred

No. of shares purchased/transferred

Wisal A. Mannoo


Jack C. Fortnum

Ingredion Incorporated

Director

Director

Director

Parent Co.

1

1

680

4*

* 4 shares were transferred from 2 directors and 2 ex-directors (Nominees) to Ingredion.

Parent Company

Ingredion Incorporated, USA is holding majority shares of the Company.

Auditors

The retiring auditors, Messrs KPMG Taseer Hadi & Co., Chartered Accountants, being eligible, offer themselves for re-appointment. The Board of Directors, on recommendations of the Audit Committee, has proposed appointment of Messrs KPMG Taseer Hadi & Co., Chartered Accountants for the year 2018.

Audit Committee

The Board of Directors has established an Audit Committee in compliance with the Code of Corporate Governance comprising five Board members. Four meetings of the Audit Committee were held during the year and attended as under–

Meetings attended in

person/through

video/audio link

Zulfikar Mannoo

James D. Gray*

Jack C. Fortnum*


Anis Ahmad Khan

Marcel Hergett

4

2

2

4

4

4

Chairman

Member

Member

Member

Member

Member

Non-Executive Director




Independent Director


* Jack C. Fortnum was replaced by James D. Gray in July, 2017.

Human Resource & Remuneration Committee

The Board of Directors has established a Human Resource & Remuneration Committee comprising of following four Board members. During the year, two meetings of the Committee were held and attended as under –

No. of Meetings Attended

Jorgen Kokke


Usman Qayyum

Zulfikar Mannoo

2

2

2

2

Chairman

Member

Member

Member



Executive Director


Shares Transfer Committee

The Board of Directors has established a Shares Transfer Committee comprising of three Board members. Eleven meetings of the Shares Transfer Committee were held during the year and attended as under -

No. of Meetings Attended

Usman Qayyum

Muhammad Asdaf *

Dr. Abid Ali*

Anis Ahmad Khan

11

3

6

9

Chairman

Member

Member

Member

*Dr. Abid Ali was replaced by Muhammad Asdaf in September, 2017.

The Committee met from time to time to consider and approve valid transfers and transmissions of shares or any business related thereto.

Pattern of Shareholding

Pattern of Shareholding as on December 31, 2017, according to requirements of Code of Corporate Governance and a statement reflecting distribution of shareholding appears at the end of this report.

Dividend

The Company has already paid three interim dividends @1000%, 750% and 750%. The Directors now propose a final dividend of 1250% making the total 3750% for the year.

May Allah give us the courage to face the challenges ahead. A'meen!

On behalf of the Board

February 14, 2018

Usman Qayyum

Chief Executive and

Managing Director

Muhammad Asdaf

Director


Earnings Per Share(Rupees)

220.86

301.14

272.48

354.59

420.01

475.54

2012 2013 2014 2015 2016 2017

100

-

200

300

400

500


Stakeholders' InformationPerformance Indicators for Six Years

Profit and Loss Account

Net turnover Rs. Million

Gross profit Rs. Million

Operating profit Rs. Million

Profit before tax Rs. Million

Profit after tax Rs. Million

Earnings before interest, taxes, depreciation

and amortization (EBITDA) Rs. Million

Balance Sheet

Share capital Rs. Million

Reserves Rs. Million

Shareholders funds Rs. Million

Property, plant and equipment Rs. Million

Net current assets / (liabilities) Rs. Million

Long term / deferred liabilities Rs. Million

Total assets Rs. Million

Profitability Ratios

Gross profit ratio Percentage

Net profit to sales Percentage

EBITDA margin to sales Percentage

Operating leverage Percentage

Return on equity Percentage

Return on capital employed Percentage

Liquidity Ratios

Current ratio Times

Quick/ Acid test ratio Times

Cash to current liabilities Times

Cash flow from operations to sales Times

Activity / Turnover Ratios

Inventory turnover ratio Times

No. of days in inventory Days

Debtors turnover ratio Times

No. of days in receivables Days

Creditors turnover ratio Times

No. of days in payables Days

Total assets turnover ratio Times

Fixed assets turnover ratio Times

Operating cycle Days

Investment / Market Ratios

Earnings per share Rupees

Price earning ratio Times

Dividend yield ratio Percentage

Dividend payout ratio Percentage

Dividend cover ratio Times

Cash dividend per share Rupees

Stock Dividend (Bonus) per share Percentage

Market value per share at the end of the year Rupees

Market value per share during the year (High) Rupees

Market value per share during the year (Low) Rupees

Break-up value per share - Refer note below

- Without surplus on revaluation of fixed assets Rupees

- Including the effect of surplus on revaluation of fixed assets Rupees

Capital Structure Ratios

Financial leverage ratio Times

Weighted average cost of debt Percentage

Debt : Equity ratio Times

Interest cover Times

201220132014201520162017

26,018.10 25,297.59 24,618.08 25,196.60 23,672.63 19,531.40

7,425.47 6,952.44 5,454.14 4,656.97 4,212.81 3,974.51

6,066.63 5,725.21 4,614.70 3,870.89 3,651.55 3,304.12

6,051.02 5,707.38 4,599.40 3,753.87 3,593.50 3,122.80

4,392.26 3,879.43 3,275.17 2,516.77 2,781.48 2,039.93

6,586.27 6,177.46 5,061.95 4,323.83 4,029.96 3,398.56

92.36

92.36

92.36

92.36

92.36

92.36

12,209.82

12,941.14

11,581.42

9,589.08

8,330.60

6,771.49

12,302.18 13,033.50 11,673.79 9,681.45 8,422.96 6,863.86

6,521.95 5,500.06 4,567.11 4,733.19 4,909.26 3,749.06

5,940.79 6,944.24 5,906.42 5,179.50 3,953.42 2,289.13

854.51 968.41 644.89 675.06 708.05 562.06

16,743.82 16,424.70 14,606.23 12,898.08 11,920.48 10,320.45

28.54

27.48

22.16

18.48

17.80

20.35

16.88 15.34 13.30 9.99 11.75 10.44 25.31 24.42 20.56 17.16 17.02 17.40 2.09 8.72 (8.37) 0.93 0.50 (0.41)

35.70 29.77 28.06 26.00 33.02 32.01

33.38 27.71 26.59 24.30 30.46 27.47

2.66

3.87

3.58

3.04

2.42

1.79

1.26

2.07

1.77

1.70

0.41

0.57

0.88

1.56

1.22

1.23

0.02

0.17

0.16

0.18

0.11

0.20

0.05

0.16

3.72

4.22

4.63

6.03

3.47

4.41

98.12 86.49 78.83 60.53 105.19 82.77

23.21 25.78 24.52 27.91 30.71 26.31

15.73 14.16 14.89 13.08 11.89 13.87

5.37 8.03 9.13 9.33 7.61 5.99

67.97 45.45 39.98 39.12 47.96 60.93

1.55

1.54

1.69

1.95

1.99

1.89

3.99

4.60

5.39

5.32

4.82

5.21

50.03

55.21

44.99

49.84

48.98

46.57

475.54

420.01

354.59

272.48

301.14

220.86

14.30

20.87

25.52

41.12

26.79

18.10

8.00

3.00

2.00

1.00

2.00

3.00

115.66

69.05

39.48

49.54

43.17

52.07

0.86

1.45

2.53

2.02

2.32

1.92

550.00

290.00

140.00

135.00

130.00

115.00

-

-

-

-

-

-

6,800.00

8,764.36

9,050.00

11,203.80

8,067.38

3,998.38

8,764.36

9,100.00

12,000.00

12,600.00

8,450.00

4,625.00

6,500.00

6,800.00

8,400.00

6,365.00

3,485.00

2,405.00

1,331.92

1,411.10

1,263.89

1,048.18

911.93

743.13

1,331.92

1,411.10

1,263.89

1,048.18

911.93

743.13

-

-

-

-

0.01

-

6.66

6.66

7.41

10.65

9.78

11.87

-

-

-

-

-

-

388.51

321.01

301.71

33.08

62.90

56.67

Summary of Cash Flow Statement

201220132014201520162017

Cash flows from operating activities 4,262,705 4,560,404 2,644,295 4,950,060 1,214,757 3,217,376

Cash used in investing activities (734,643) (868,588) (1,666,864) (440,975) (448,813) (1,180,865)

Cash used in financing activities (4,167,556) (2,689,496) (1,306,852) (1,450,576) (1,215,142) (1,593,017)

(639,494) 1,002,320 (329,421) 3,058,509 (449,198) 443,494

Opening cash and cash equivalents 3,788,730 2,786,410 3,115,831 57,322 506,520 63,026

Closing cash and cash equivalents 3,149,236 3,788,730 2,786,410 3,115,831 57,322 506,520

(Rupees in Thousand)

Cash flows from operating activities

Cash received from customers 25,320,461 24,516,614 25,064,880 23,644,067 19,326,826

Cash paid to suppliers and employees (19,262,533) (20,443,465) (19,072,748) (21,638,434) (15,240,314)

Interest income received 123,665 82,006 30,047 3,074 1,252

Taxes paid (1,621,189) (1,510,860) (1,072,119) (793,950) (870,388)

Net cash flows from operating activities 4,560,404

25,878,351

(19,960,200)

111,404

(1,766,850)

4,262,705 2,644,295 4,950,060 1,214,757 3,217,376

Cash flows from investing activities

Property, plant and equipment (741,858) (870,327) (1,665,395) (468,727) (452,894) (1,184,502)

Sale proceeds of property, plant and equipment 7,977 7,138 2,325 28,244 4,421 6,186

Disbursement of long term loans (8,400) (12,700) (8,000) (3,440) (3,600) (4,746)

Repayment from long term loans 7,638 7,301 4,206 2,948 3,260 2,197

Net cash used in investing activities (734,643) (868,588) (1,666,864) (440,975) (448,813) (1,180,865)

Cash flows from financing activities

Dividend paid (4,151,927) (2,671,639) (1,291,579) (1,246,203) (1,199,955) (1,061,351)

Finance cost paid (15,629) (17,857) (15,273) (123,985) (95,575) (133,764)

Increase / (Decrease) in short term running finances - - - (80,388) 80,388 (397,902)

Net cash used in financing activities (4,167,556) (2,689,496) (1,306,852) (1,450,576) (1,215,142) (1,593,017)

Net increase / (Decrease) in cash and cash equivalents (639,494) 1,002,320 (329,421) 3,058,509 (449,198) 443,494

Cash and cash equivalents at the beginning of the year 3,788,730 2,786,410 3,115,831 57,322 506,520 63,026

Effect of exchange rate fluctuations ----- -

Cash and cash equivalents at the end of the year 3,149,236 3,788,730 2,786,410 3,115,831 57,322 506,520

Cash ow Statement - Direct Method

201220132014201520162017(Rupees in Thousand)

Performance Indicators for Six Years

Note: The Company has not carried out any revaluation, hence there is no surplus on revaluation of fixed assets.

Stakeholders' Information

201220132014201520162017

Opening balance

Reconciliation of Weighted average number of shares for calculating EPS and diluted EPS

Nos. 9,236,428 9,236,428 9,236,428 9,236,428 9,236,428 9,236,428

Add: Bonus shares issued durning the year Nos. - - - - - -

Opening balance Nos. 9,236,428 9,236,428 9,236,428 9,236,428 9,236,428 9,236,428



We have sustained our success by anticipating the future and continuously adapting ourselves to harness the opportunities. In 2017, we continued to invest on new concepts, building capacities and enhancing capabilities by investing Rs. 742 million on capital expenditure.

The company embarked on a cost saving exercise to mitigate the pressure on cost, and continues its efforts to optimize production, improving plant yields, realize energy savings and focus on customer relationships as a source of new business opportunities.

Profitability Ratios

The company has succeeded to increase sales by 3% mainly on account of higher sales of Liquid Glucose, Maize (corn) Starch and Maize Oil Cake products. The gross profit also grew by 7%, and after tax net Income by 13%. The EBITDA margin to sales at 25.3% and return on equity at 35.70% also reflected an increase over 2016.

Liquidity Ratios

The Company has excellent current ratio at 2.66 that decreased slightly compared with last year mainly due to high dividend payout this year.

Activity / Turnover Ratios

Our company has been able to strategically reduce its operating cycle by 5 days compared with last year. This is mainly due to increase in payable days as we have been able to enjoy better credit terms with our vendors.

Investment / Market Ratios

EPS of the company grew by 13% on account of reasons explained above. Dividend yield improved by 167% over 2016, whereas cash dividend per share improved by 90% over the last year.

Capital Structure Ratios

The Company is fully operated on equity capital, no long term debt hence Debt to Equity ratio is zero.

Comments on Analysis Results

DuPont Analysis

2017 2016

Operating Income Margin ( Operating Profit / Sales)

2017 2016

Leverage Ratio (Asset/Equity)

23.32%

1.55

1.361 1.26022.63%

1.53

72.59% 67.97%

99.74% 99.69%

2017 2016

Asset Turnover ( Sales/ Assets)

2017 2016

Interest Burden / Efficiency(PBT/EBIT)

2017 2016

Tax Burden / Efficiency (Net Income/PBT)

2017 2016

Return on Equity (ROE)

35.70% 29.77%

Leverage Ratio (Assets/ Equity)

Improved mainly due to considerable high dividend payout ratio.

Asset Turnover ( Sales/ Assets)

Growth in sale of head products has improved the ratio.

Operating Income has grown on account of revenue, margin and decrease in tax expense for the year.

Operating Income Margin

Return on Equity ( ROE)

Return on Equity has improved due to increase in net income by 13% over last year.

Tax Burden / Efficiency (Net Income/PBT)

Increased mainly due to impact of deferred tax on capitalization of COGEN last year.

Interest Burden / Efficiency ( PBT/EBIT)

Minor variance.


First

Quarter

Second

Quarter

Third

Quarter

Fourth

QuarterTotal

Revenue

Profit after Taxation

Share Capital and Reserves

Earning Per Share (Rupees)

6,698 6,424 6,126 6,770 26,018

1,103 1,026 1,115 1,148 4,392

11,366 11,468 11,890 12,302 12,302

119.45 111.05 120.72 124.32 475.54

……….Rs Million………….


Quarterly Analysis

Comments on variation in interim results and the manner in which each quarter contributed to the overall annual results are mentioned below.

Sales-net

Sales revenue increased by 3% as compared to last year. This increase in revenue over the period is attributable to volumetric increase of head products. Moreover, variation in sales revenue quarter to quarter is due to seasonal impact and overall industrial growth.


Profit after Taxation increased by 13% over last year mainly due to increase in sales volume,margin and deferred tax impact.

-

5,000

10,000

15,000

20,000

25,000

30,000

Q1 Q2 Q3 Q4 FY2017

Revenue



Earning per Share


Share capital and reserves decreased by 6% over last year due to high dividend payout during the year ended December 31, 2017.

Earnings per Share

Earnings per Share directly relate with respective changes in Profit after Tax during the year.

The company is mainly dealing in US Dollars; hence sensitivity analysis has been made against USD only.

At reporting date, if the PKR had strengthened by 10% against the foreign currencies with all other variables held constant, before tax profit for the year would have been lower by the amount shown below, mainly as a result of net foreign exchange gain on translation of foreign debtors, foreign currency bank account and trade and other payables.

The weakening of the PKR against foreign currencies would have had an equal but opposite impact on the post tax loss.

The sensitivity analysis prepared is not necessarily indicative of the effects on profit for the year and assets / liabilities of the Company.

Sensitivity Analysis

2017 2016(Rupees in thousands)

Effect on profit and loss

US Dollar 3,889 2,677

Statement of Value Added and its Distribution20162017

(Rupees in thousands)

VALUE ADDED

Net sales 26,018,104 25,297,585

Material and services (17,517,632) (17,375,579)

Other income - net 193,181 163,757

Foreign Exchange Gain / (Loss) (5,974) 2,721

8,687,679 8,088,484

DISTRIBUTION % %

EMPLOYEES REMUNERATION Salaries, wages and amenities 1,673,837 19.3 1,524,846 18.9

FINANCIAL CHARGES TO PROVIDERS OF FINANCE Finance Cost 15,615 0.2 17,835 0.2

GOVERNMENT AS TAXES

Tax 1,658,758 19.1 1,827,944 22.6

Workers profit participation fund 302,519 3.5 285,369 3.5

Workers welfare fund 117,114 1.3 97,659 1.2

2,078,391 23.9 2,210,972 27.3

SHAREHOLDERS AS DIVIDEND

Dividend 5,080,035 58.5 2,678,564 33.1

SOCIETY WELFARE Donations 7,941 0.1 3,147 -

RETAINED WITHIN THE BUSINESS Depreciation/amortization 519,638 6.0 452,253 5.6

Retained profit (687,778) (7.9) 1,200,867 14.8

(168,140) (1.9) 1,653,120 20.4

8,687,679 100 8,088,484 100



We have reviewed the enclosed Statement of Compliance with the best practices contained in the Code of Corporate Governance (the Code) prepared by the Board of Directors of Rafhan Maize Products Company Limited (“the Company”) for the year ended 31 December 2017 to comply with the requirements of Listing Regulation No. 5.19 of the Rule Book of Pakistan Stock Exchange Limited where the Company is listed.

The responsibility for compliance with the Code is that of the Board of Directors of the Company. Our responsibility is to review, to the extent where such compliance can be objectively verified, whether the Statement of Compliance reflects the status of the Company's compliance with the provisions of the Code and report if it does not and to highlight any non-compliance with the requirements of the Code. A review is limited primarily to inquiries of the Company personnel and review of various documents prepared by the Company to comply with the Code.

As a part of our audit of 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 Code requires the Company to place before t h e A u d i t C o m m i t t e e , a n d u p o n recommendation of the Audit Committee, place before the Board of Directors for their review and approval of its related party transactions distinguishing between transactions carried out on terms equivalent to those that prevail in arm's length transactions and transactions which are not executed at arm's length price and recording proper justification for using such alternate pricing mechanism. We are only required and have ensured compliance of this requirement to the extent of the approval of the related party transactions by the Board of Directors upon recommendation of the Audit Committee. We have not carried out any procedures to determine whether the related party transactions were undertaken at arm's length price or not.

The Company has continued to present the details of all related party transactions before the Audit Committee and upon their recommendation to the Board for review and approval. The definition of related party used is in accordance with repealed Companies Ordinance, 1984 and applicable financial reporting frame work, as the regulations under Section 208 of the Companies Act, 2017 have not yet been announced.

Based on our review, nothing has come to our attention which causes us to believe that the S ta tement o f Compl iance does no t appropriately reflect the Company's compliance, in all material respects, with the best practices contained in the Code as applicable to the Company for the year ended 31 December 2017.

LahoreFebruary 14, 2018

KPMG Taseer Hadi & Co.Chartered Accountants(Kamran Iqbal Yousafi)

Review Report to the Memberson Statement of Compliance with the Code of Corporate Governance


This statement is being presented to comply with the Code of Corporate Governance contained inRegulation No. 5. 19 of Rule Book of Pakistan Stock Exchange Limited for the purpose of establishing a framework of good governance, whereby a listed company is managed in compliance with the best Practices of corporate governance.

The Company has applied the Principles contained in the CCG in the following manner:

The company encourages representation of independent non-executive directors anddirectors representing minority interests on its Board of Directors. At Present, the Board includes :

The independent director meets the criteria of independence under clause 5.19.1(b) of the CCG. The directors have confirmed that none of them is serving as a director on more than seven listed companies, including this Company (excluding the listed subsidiaries of listed holding companies where applicable).

All the resident Directors of the Company are registered as taxpayers and none of them hasdefaulted in payment of any loan to a banking company, a DFI or an NBFI or, being a Broker of a stock exchange, has been declared as a defaulter by that stock exchange.

Two casual vacancies occurring on the Board on 20-06-2017 and 07-07-2017 during the year under review were filled up by the directors on 04-07-2017 and 21-09-2017 respectively (within 90 days).

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.

1)

2)

3)

4)

5)

Statement of Compliance with theCode of Corporate Governance - Year Ended December 31, 2017

Category Names

Independent Director

Executive Directors

Non-Executive Directors

Mr. Anis Ahmad Khan

Mr. Usman Qayyum

Mr. Muhammad Asdaf

Mr. Pierre Perez y Landazuri

Mr. Jorgen Kokke

Mr. James D. Gray

Ms. Christine M. Castellano

Mr. Marcel Hergett

Mr. Zulfikar Mannoo

Mian M. Adil Mannoo

Mr. Wisal A. Mannoo

The Board has developed a vision/mission

statement, overall corporate strategy and

significant Policies of the Company. A complete

record of particulars of significant policies

along with the dates on which they were

approved or amended has been maintained.

All the powers of the Board have been duly

e x e r c i s e d a n d d e c i s i o n s o n m a t e r i a l

transactions, including appointment and

determination of remuneration and terms and

conditions of employment of the CEO, other

executive and non-executive directors, have

been taken by the Board/shareholders.

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

and the Board met at least once in every quarter.

Written notices of the Board meetings, along

with agenda and working papers, were

circulated at least seven days before the

meeting. The minutes of the meetings were

appropriately recorded and circulated.

The Directors of the Board were apprised of

their duties and responsibilities from time to

time during Board meetings. In accordance with

mandatory requirement of SECP and Stock

Exchange, all local Directors have obtained

certification from approved institutions except

a newly appointed director who joined the

Board on September 21, 2017.

The Board has approved/ratified appointment

of CFO, Company Secretary and Head of

Internal Audit, including their remuneration

and terms and conditions of employment.

The directors' report for this year has been

prepared in compliance with the requirements

of the CCG and fully describes the salient

matters required to be disclosed.

The financial statements of the Company were

6)

7)

8)

9)

10)

11)

12)

Statement of Compliance with theCode of Corporate Governance - Year Ended December 31, 2017

Accountants (IFAC) guidelines on code of

ethics as adopted by the ICAP.

The statutory auditors or the persons associated

with them have not been appointed to provide

other services except in accordance with the

listing regulations and the auditors have

confirmed that they have observed IFAC

guidelines in this regard.

The 'closed period', prior to the announcement

of interim/final results, and business decisions,

which may materially affect the market price of

Company's securities, was determined and

intimated to directors, employees and stock

exchange.

Material/price sensitive information has been

disseminated among all market participants at

once through stock exchange.

The Company has compl i ed w i th t he

requirements relating to maintenance of

register of persons having access to inside

information by designated senior management

officer in a timely manner and maintained

proper record including basis for inclusion or

exclusion of names of persons from the said list.

We confirm that all other material principles

enshrined in the CCG have been complied with.

20)

21)

22)

23)

24)

duly endorsed by CEO and CFO before

approval of the Board.

The directors, CEO and executives do not hold

any interest in the shares of the Company other

t h a n t h a t d i s c l o s e d i n t h e p a t t e r n o f

shareholding.

The Company has complied with all the

corporate and financial reporting requirements

of the CCG.

The Board has formed an Audit Committee. It

comprises five members. All are non-executive

directors including one Independent Director

and the chairmen of the Committee is a non-

executive director.

The meetings of the audit committee were held

at least once every quarter prior to approval of

interim and final results of the Company and as

required by the CCG. The terms of reference of

the committee have been formed and advised to

the committee for compliance.

The Board has formed an HR and Remuneration

Committee. It comprises four members, of

whom three are non-executive directors. The

chairman of the committee is a non-executive

director.

The Board has set up an effective internal audit

function. The Internal Auditor is considered

suitably qualified and experienced for the

purpose and is conversant with the policies and

procedures of the Company.

The statutory auditors of the Company have

confirmed that they have been given a

satisfactory rating under the quality control

review program of the ICAP, that they or any of

the partners of the firm, their spouses and minor

children do not hold shares of the Company and

that the firm and all its partners are in

compliance with International Federation of

13)

14)

15)

16)

17)

18)

19)

February 14, 2018


Usman Qayyum

Chief Executive and

Managing Director

Muhammad Asdaf

Director

Auditors' Report to the Members

We have audited the annexed balance sheet of Rafhan Maize Product Company Limited (“the Company”) as at 31 December 2017 and the related profit and loss account, statement of comprehensive income, cash flow statement and statement of changes in equity together with the notes forming part thereof, for the year then ended and we state that we have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purposes of our audit.

It is the responsibility of the Company’s management to establish and maintain asystem of internal control, and prepare and present the above said statements in conformity with the approved accounting standards and the requirements of the Companies Ordinance, 1984. Our responsibility is to express an opinion on these statements based on our audit.

We conducted our audit in accordance with the auditing standards as applicable in Pakistan. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the above said statements are free of any material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the above said statements. An audit also includes assessingthe accounting policies and significant estimates made by management, as well as,

evaluating the overall presentation of the above said statements. We believe that ouraudit provides a reasonable basis for our opinion and, after due verification, we reportthat:

a)

b)

c)

d)

LahoreFebruary 14, 2018

in our opinion, proper books of account have been kept by the Company as required by the Companies Ordinance, 1984;

in our opinion:

i)

ii)

iii)

in our opinion and to the best of our information and according to the explanations given to us, the balance sheet, profit and loss account, statement of comprehensive income, cash flow statement and statement of changes in equity together with the notes forming part thereof conform with approved accounting standards as applicable in Pakistan, and, give the information required by the Companies Ordinance, 1984, in the manner so required and respectively give a true and fair view of the state of the Company's affairs as at 31 December 2017 and of the profit, its comprehensive income, its cash flows and changes in equity for the year then ended; and

in our opinion, Zakat deductible at source under t h e Z a k a t a n d U s h r O r d i n a n c e ,1980 (XVIII of 1980), was deducted by the C o m p a n y a n d d e p o s i t e d i n t h eCentral Zakat Fund established under section 7 of that Ordinance.

the balance sheet and profit and loss account together with the notes thereonhave been drawn up in conformity with the Companies Ordinance, 1984,and are in agreement with the books of account and are further in accordance with accounting policies consistently applied;

the expenditure incurred during the year was for the purpose of theCompany's business; and

the business conducted, investments made and the expenditure incurredduring the year were in accordance with the objects of the Company;

KPMG Taseer Hadi & Co.Chartered Accountants(Kamran Iqbal Yousafi)


Balance Sheet


As at 31 December 2017

Non-current assets

Property, plant and equipment 5 7,027,104 6,805,788 Intangibles 6 - 427 Employees retirement benefits 7 178,980 241,184 Long term loans 8 9,817 10,263

7,215,901 7,057,662

Current assets

Stores and spares 9 620,944 649,729 Stock in trade 10 4,377,194 3,692,891 Trade debts 11 1,121,006 981,253 Loans and advances 12 98,162 88,524 Trade deposits and short term prepayments 13 136,000 149,800 Other receivables 14 25,372 16,113 Cash and bank balances 15 3,149,236 3,788,730

9,527,914 9,367,040 Current liabilities

Trade and other payables 16 3,461,555 2,284,354 Mark-up accrued on short term running finances - 14 Provision for taxation - net 125,568 138,428

3,587,123 2,422,796 Working capital 5,940,791 6,944,244

Total capital employed 13,156,692 14,001,906

Non-current liabilities

Deferred taxation 17 854,513 968,406

Net capital employed 12,302,179 13,033,500

Represented by:

Share capital and reserves

Share capital 18 92,364 92,364

Reserves 19 12,209,815 12,941,136

Contingencies and commitments 20

12,302,179 13,033,500

The annexed notes 1 to 42 form an integral part of these financial statements.

2017 2016

Note (Rupees in thousands)

Zulfikar Mannoo

Director

Usman Qayyum

Chief Executive and

Managing Director

Muhammad Asdaf

Director


Prot and Loss AccountFor the year ended 31 December 2017

2017 2016


22 26,018,104 25,297,585

23 (18,592,634) (18,345,146)

7,425,470 6,952,439

24 (638,768) (583,454)

25 (487,646) (427,225)

26 193,181 200,541

27 (425,607) (417,091)

(1,358,840) (1,227,229)

6,066,630 5,725,210

28 (15,615) (17,835)

6,051,015 5,707,375

29 (1,658,758) (1,827,944)

4,392,257 3,879,431

30 475.54 420.01

Sales - net

Cost of sales

Gross profit

Distribution expenses

Administrative expenses

Other income

Other expenses

Operating profit

Finance cost

Profit before taxation

Taxation

Profit after taxation

Earnings per share - basic and diluted (Rupees)


Zulfikar Mannoo

Director

Usman Qayyum

Chief Executive and

Managing Director

Muhammad Asdaf

Director

Statement of Comprehensive Income


For the year ended 31 December 2017

2017 2016


Profit for the year 3,879,431

Other comprehensive income for the year

Items that will not be reclassified to profit and loss:

Actuarial (loss) / gain on retirement benefits recognized directly in equity 7.3 226,504

Deferred tax on actuarial loss / (gain) recognized directly in equity 17.1 (67,657)

158,847

Total comprehensive income for the year 4,038,278


4,392,257

(62,204)

18,661

(43,543)

4,348,714

Zulfikar Mannoo

Director

Usman Qayyum

Chief Executive and

Managing Director

Muhammad Asdaf

Director


Cash Flow Statement For the year ended 31 December 2017

2017 2016


31

38

15

Cash flows from operating activities

Cash generated from operations

Taxes paid

Employees retirement benefits paid

Interest received

Net cash generated from operating activities

Cash flows from investing activities

Capital expenditure incurred

Proceeds from sale of property, plant and equipment

Long term loans disbursed

Receipt from long term loans disbursed

Net cash used in investing activities

Cash flows from financing activities

Dividend paid

Finance cost paid

Net cash used in financing activities

Net (decrease) / increase in cash and cash equivalents

Cash and cash equivalents at the beginning of the year

Cash and cash equivalents at the end of the year


5,954,159

(1,766,850)

(36,008)

111,404

(1,691,454)

4,262,705

(741,858)

7,977

(8,400)

7,638

(734,643)

(4,151,927)

(15,629)

(4,167,556)

(639,494)

3,788,730

3,149,236

6,117,824

(1,621,189)

(59,896)

123,665

(1,557,420)

4,560,404

(870,327)

7,138

(12,700)

7,301

(868,588)

(2,671,639)

(17,857)

(2,689,496)

1,002,320

2,786,410

3,788,730

Zulfikar Mannoo

Director

Usman Qayyum

Chief Executive and

Managing Director

Muhammad Asdaf

Director

Statement of Changes in Equity



Share Share Other General Un-appropriated

capital premium profit

Balance as at 31 December 2015 92,364 36,946 941 207 11,543,328 11,673,786

Total comprehensive income

Profit for the year - - - - 3,879,431 3,879,431

Other comprehensive income - - - - 158,847 158,847

- - - - 4,038,278 4,038,278

Transactions with owners of the Company

recognized directly in equity

Final dividend 2015 Rs. 120.00 per share - - - - (1,108,371) (1,108,371)

Ist interim dividend 2016 Rs. 50.00 per share - - - - (461,821) (461,821)

2nd interim dividend 2016 Rs. 60.00 per share - - - - (554,186) (554,186)

3rd interim dividend 2016 Rs. 60.00 per share - - - - (554,186) (554,186)

- - - - (2,678,564) (2,678,564)


Total comprehensive income

Profit for the year - - - - 4,392,257 4,392,257

Other comprehensive loss - - - - (43,543) (43,543)

- - - - 4,348,714 4,348,714

Transactions with owners of the Company

recognized directly in equity

Final dividend 2016 (Rs. 300.00 per share) - - - - (2,770,928) (2,770,928)

Ist interim dividend 2017 (Rs. 100.00 per share) - - - - (923,643) (923,643)

2nd interim dividend 2017 (Rs. 75.00 per share) - - - - (692,732) (692,732)

3nd interim dividend 2017 (Rs. 75.00 per share) - - - - (692,732) (692,732)

- - - - (5,080,035) (5,080,035)



----------------------------------------- (Rupees in thousands) ------------------------------------------

Total

Revenue ReservesCapital Reserves

Zulfikar Mannoo

Director

Usman Qayyum

Chief Executive and

Managing Director

Muhammad Asdaf

Director


Notes to the Financial StatementsFor the year ended 31 December 2017

1 Reporting entity

2 Basis of preparation

2.1 Statement of compliance

2.2 Functional and presentation currency

2.3

2.4

The Companies Act, 2017 applicable for period beginning on 01 January 2018 requires certain additional

disclosures and section 235 of the repealed Companies Ordinance, 1984 relating to treatment of surplus

arising out of revaluation of assets has not been carried forward in the Companies Act, 2017. The change

is not likely to have an impact on the financial statements of the Company.

Rafhan Maize Products Company Limited ("the Company") was incorporated in Pakistan as a Public unlisted

company under repealed Companies Ordinance, 1984 and was subsequently listed on the Pakistan Stock

Exchange (Previously Karachi and Lahore Stock Exchange). Ingredion Incorporated, Chicago, U.S.A., holds majority

shares of the Company. The registered office of the Company is situated at Rakh Canal, East Road, Faisalabad

(previously at Finlay House, I.I. Chundrigar Road, Karachi). The Company uses maize as the basic raw material

to manufacture and sell a number of industrial products, principal ones being industrial starches, liquid glucose,

dextrose, dextrin and gluten meals.

These financial statements have been prepared in accordance with approved accounting standards as

applicable in Pakistan. Approved accounting standards comprise of such International Financial

Reporting Standards (IFRS) issued by the International Accounting Standards Board and Islamic

Financial Accounting Standards (IFAS) issued by the Institute of Chartered Accountants of Pakistan as

are notified under the repealed Companies Ordinance, 1984, provisions of and directives issued under the

Companies Ordinance, 1984. In case requirements differ, the provisions of, or directives issued under the

repealed Companies Ordinance, 1984 shall prevail.

New Standards, amendments to approved accounting standards and interpretations which became

effective during the year ended 31 December 2017

During the year certain amendments to standards or new interpretations became effective, however, the

amendments or interpretation did not have any material effect on the financial statements of the

Company.

These financial statements are presented in Pakistani Rupees which is also the Company's functional

currency.

During the year on 30 May 2017, the Companies Act, 2017 (the Act) was enacted which replaced and

repealed the Companies Ordinance, 1984. However, the Securities and Exchange Commission of

Pakistan (SECP) through its Circular No. 23 of 2017 dated 04 October 2017 has advised the Companies

whose financial year closes on or before 31 December 2017 shall prepare their financial statements in

accordance with the provisions of the repealed Companies Ordinance, 1984.

New Companies Act, 2017 and new / revised accounting standards, amendments to published

accounting standards, and interpretations that are not yet effective.

Notes to the Financial Statements



2.5 New accounting standards and IFRIC interpretations that are not yet effective

—

—

—

—

—

Transfers of Investment Property (Amendments to IAS 40 ‘Investment Property’effective for

annual periods beginning on or after 1 January 2018) clarifies that an entity shall transfer a

property to, or from, investment property when, and only when, there is a change in use. A change

in use occurs when the property meets, or ceases to meet, the definition of investment property and

there is evidence of the change in use. In isolation, a change in management's intentions for the use

of a property does not provide evidence of a change in use. The amendments are not likely to have

an impact on Company’s financial statements.

Annual Improvements to IFRSs 2014-2016 Cycle [Amendments to IAS 28 ‘Investments in

Associates and Joint Ventures’] (effective for annual periods beginning on or after 1 January

2018) clarifies that a venture capital organization and other similar entities may elect to measure

investments in associates and joint ventures at fair value through profit or loss, for each associate

or joint venture separately at the time of initial recognition of investment. Furthermore, similar

election is available to non-investment entity that has an interest in an associate or joint venture

that is an investment entity, when applying the equity method, to retain the fair value measurement

applied by that investment entity associate or joint venture to the investment entity associate's or

joint venture's interests in subsidiaries. This election is made separately for each investment entity

associate or joint venture. The amendments are not likely to have an impact on Company’s

financial statements.

IFRIC 22 ‘Foreign Currency Transactions and Advance Consideration’ (effective for annual

periods beginning on or after 1 January 2018) clarifies which date should be used for translation

when a foreign currency transaction involves payment or receipt in advance of the item it relates to.

The related item is translated using the exchange rate on the date the advance foreign currency is

received or paid and the prepayment or deferred income is recognized. The date of the transaction

for the purpose of determining the exchange rate to use on initial recognition of the related asset,

expense or income (or part of it) would remain the date on which receipt of payment from advance

consideration was recognized. If there are multiple payments or receipts in advance, the entity shall

determine a date of the transaction for each payment or receipt of advance consideration. The

application of interpretation is not likely to have an impact on Company’s financial statements.

IFRIC 23 ‘Uncertainty over Income Tax Treatments’ (effective for annual periods beginning on or

after 1 January 2019) clarifies the accounting for income tax when there is uncertainty over income

tax treatments under IAS 12. The interpretation requires the uncertainty over tax treatment be

reflected in the measurement of current and deferred tax.

The following standards, amendments and interpretations of approved accounting standards will be

effective for accounting periods beginning on or after 01 January 2018:

Amendments to IFRS 2 clarify the accounting for certain types of arrangements and are effective

for annual periods beginning on or after 1 January 2018. The amendments cover three accounting

areas (a) measurement of cash-settled share-based payments; (b) classification of share-based

payments settled net of tax withholdings; and (c) accounting for a modification of a share-based

payment from cash-settled to equity-settled. The new requirements could affect the classification

and/or measurement of these arrangements and potentially the timing and amount of expense

recognized for new and outstanding awards. The amendments are not likely to have an impact on

Company’s financial statements.

a



—

—

—

—

—

—

—

IFRS 15 ‘Revenue from contracts with customers’ (effective from annual period beginning on or

after 1 July 2018). IFRS 15 establishes a comprehensive framework for determining whether, how

much and when revenue is recognized. It replaces existing revenue recognition guidance, including

IAS 18 ‘Revenue’, IAS 11 ‘Construction Contracts’ and IFRIC 13 ‘Customer Loyalty

Programmes’. The Company is assessing the potential impact on its financial statements resulting

from the adoption of IFRS 15.

IFRS 9 ‘Financial Instrument’ (effective from annual period beginning on or after 1 July 2018).

IFRS 9 replaces the existing guidance in IAS 39 Financial Instruments: Recognition and

Measurement. IFRS 9 includes revised guidance on the classification and measurement of financial

instruments, a new expected credit loss model for calculating impairment on financial assets, and

new general hedge accounting requirements. It also carries forward the guidance on recognition

and derecognition of financial instruments from IAS 39. The Company is assessing the potential

impact on its financial statements resulting from the adoption of IFRS 9.

Amendment to IFRS 9 ‘Financial Instrument’- prepayment Features with Negative Compensation

and modifications of financial liabilities (effective for annual period beginning on or after 1

January 2019). The amendment allow debt instruments with negative compensation prepayment

features to be measured at amortised cost or fair value through other comprehensive income. The

amendment also clarified that gains and losses arising on modifications of financial liabilities that

do not result in derecognition should be recognized in profit or loss.

Amendment to IFRS 4 ‘Insurance Contract’- Applying IFRS 9 ‘Financial Instruments’ with IFRS

4 (effective for annual period beginning on or after 1 July 2018). The amendment address issue

arising from the different effective dates of IFRS 9 and the forthcoming new insurance contract

standard IFRS 17 ‘Insurance Contracts’. The amendments introduce two alternative options for

entities issuing contracts within the scope of IFRS 4, notably a temporary exemption and an

overlay approach. The temporary exemption enables eligible entities to defer the implementation

date of IFRS 9. The overlay approach allows an entity applying IFRS 9 from 1 July 2018 onwards

to remove from profit or loss the effects of some of the accounting mismatches that may occur

from applying IFRS 9 before IFRS 17 is applied. The amendment is not likely to have an impact

on the Company's financial statements.

Amendment to IAS 28 ‘Investments in Associates and Joint Ventures’ - Long term investment in

Associates and Joint Ventures (effective for annual period beginning on or after 1 January 2019).

An amendment to IAS 28 Investments in Associates and Joint Ventures will affect companies that

finance such entities with preference shares or with loans for which repayment is not expected in

the foreseeable future (referred to as long-term interests or ‘LTI’). The amendment and

accompanying example state that LTI are in the scope of both IFRS 9 and IAS 28 and explain the

annual sequence in which both standards are to be applied. The amendment is not likely to have an

impact on the Company's financial statements.

Annual Improvements to IFRS Standards 2015–2017 Cycle. The new cycle of improvements addresses

improvements to following approved accounting standards:

IFRS 3 Business Combinations and IFRS 11 Joint Arrangements. The amendment aims to clarify

the accounting treatment when a company increases its interest in a joint operation that meets the

definition of a business. A company remeasures its previously held interest in a joint operation

when it obtains control of the business. A company does not remeasure its previously held interest

in a joint operation when it obtains joint control of the business.

IAS 12 Income Taxes. The amendment clarify that all income tax consequences of dividends

(including payments on financial instruments classified as equity) are recognized consistently with

the transaction that generates the distributable profits.




—

3 Basis of measurement

- certain foreign currency translation adjustments;

- recognition of employee retirement benefits at present value; and

- derivative financial instruments.

4 Summary of significant accounting policies

4.1 Property, plant and equipment


The above amendments are not likely to have a significant impact on Company’s financial statements.

Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses, if

any. Cost of certain property, plant and equipment comprises of historical cost, exchange differences

recognized, for the acquisition of property, plant and equipment up to the commencement of commercial

production and the cost of borrowings during construction period in respect of loans taken, if any, for

specific projects.

IAS 23 Borrowing Costs. The amendment clarify that a company treats as part of general

borrowings any borrowing originally made to develop an asset when the asset is ready for its

intended use or sale.

The significant accounting policies adopted in the preparation of these financial statements are set out below.

The accounting policies have been consistently applied to all years presented.

The residual value, depreciation method and the useful lives of each part of property, plant and

equipment that is significant in relation to the total cost of the asset are reviewed, and adjusted if

appropriate, at each balance sheet date.

Maintenance and normal repairs are charged to profit and loss account as and when incurred.

Improvements are capitalized when it is probable that respective future economic benefits will flow to

the Company and the cost of the item can be measured reliably. Assets replaced, if any, are derecognized.

The gain or loss on disposal or retirement of an asset is represented by the difference between the sale

proceeds and the carrying amount of the asset and is recognized as an income or expense.

These financial statements have been prepared under the historical cost convention, except for:

Capital work in progress and stores held for capital expenditure are stated at cost less any identified

impairment loss and represents expenditure incurred on property, plant and equipment during the

construction and installation. Cost also includes applicable borrowing costs. Transfers are made to

relevant property, plant and equipment category as and when assets are available for use.

Depreciation charge is based on the straight-line method whereby the cost of an asset is written off to

profit and loss account over its estimated useful life after taking into account the residual value, if

material. Depreciation on additions is charged from the month in which the asset is available for use and

on disposals is charged up to the month preceding the disposal. The rate of depreciation is specified in

Note 5.1 to these financial statements.



4.2 Intangibles

4.3 Employees retirement benefits

Defined benefit plans

The Company’s retirement benefit plans comprise of provident fund, pension and gratuity schemes for

eligible retired employees.

The Company operates a funded pension scheme and a funded gratuity scheme for all its employees and

an approved pension fund for officers and above-grade employees, having a service period of minimum

10 years. The pension and gratuity schemes are salary schemes providing pension and lump sums,

respectively. The pension and gratuity plans are final salary plans. The Company recognizes expense in

accordance with IAS 19 'Employee Benefits'.

Past-service costs are recognized immediately in profit and loss account, unless the changes to the plan

are conditional on the employees remaining in service for a specified period of time (the vesting period).

In this case, the past-service costs are amortized on a straight-line basis over the vesting period.

The Company's net obligation in respect of defined benefit plans is calculated separately for each plan by

estimating the amount of future benefit that employees have earned in the current and prior periods,

discounting that amount and deducting the fair value of any plan assets. The calculation of defined

benefit obligations is performed annually by a qualified actuary using the projected unit credit method.

When the calculation results in a potential asset for the Company, the recognized asset is limited to the

present value of economic benefits available in the form of any future refunds from the plan or

reductions in future contributions to the plan. To calculate the present value of economic benefits,

consideration is given to any applicable minimum funding requirements.

Intangibles are recognized when it is probable that the expected future economic benefits will flow to the

entity and the cost of the asset can be measured reliably. Intangibles having finite useful life are stated at

cost less accumulated amortization and accumulated impairment losses, if any. Cost of the intangible

asset (i.e. computer software) includes purchase cost and directly attributable expenses incidental to

bring the asset for its intended use.

Amortization is based on the cost of an asset less its residual value, if any. Amortization is recognized in

profit and loss on a straight-line basis over the estimated useful lives of intangible assets. Amortization

methods, useful lives and residual values are reviewed at each reporting date and adjusted, if appropriate.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return

on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are

recognised immediately in other comprehensive income. The Company determines the net interest

expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate

used to measure the defined benefit obligation at the beginning of the annual period to the then-net

defined benefit liability (asset), taking into account any changes in the net defined benefit liability (asset)

during the period as a result of contributions and benefit payments. Net interest expense and other

expenses related to defined benefit plans are recognised in profit and loss account.

The contributions have been made to pension and gratuity funds in accordance with the actuary’s

recommendations based on the actuarial valuation of these funds as at 31 December 2017.

Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in

the specific asset to which it relates. All other expenditures are recognized in profit and loss as incurred.




Defined contribution plans

4.4 Stores and spares

4.5 Stocks in trade

Raw materials Weighted average cost

Work-in-process and finished goods

4.6

4.6.1 Non-derivative financial assets

The Company initially recognises loans and receivables on the date that they are originated. All other

financial assets (including assets designated as at fair value through profit and loss) are recognised

initially on the trade date, which is the date that the Company becomes a party to the contractual

provisions of the instrument.

The Company derecognises a financial asset when the contractual rights to the cash flows from the assets

expire, or it transfers the rights to receive the contractual cash flows in a transaction in which

substantially all the risks and rewards of ownership of the financial assets are transferred. Any interest in

such transferred financial assets that is created or retained by the Company is recognised as a separate

asset or liability.

Financial instruments

The Company operates a defined contribution approved provident fund for all its eligible employees, in

which the Company and the employees make equal monthly contributions at the rate of 14% of basic

salary including dearness allowance of employees.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that

relates to past service or the gain or loss on curtailment is recognised immediately in profit and loss

account. The Company recognises gains and losses on the settlement of a defined benefit plan when the

settlement occurs.

Cost of direct materials, labour and appropriate

manufacturing overheads.

Stock in transit is valued at a cost, comprising invoice value plus other charges invoiced there on.

Cost comprises all costs of purchase, cost of conversion and other costs incurred in bringing the

inventories to their present location and condition, and valuation has been determined as follows:

Net realizable value signifies the estimated selling price in the ordinary course of business less estimated

costs of completion and estimated costs necessary to make the sale (selling expenses).

Obligations for contributions to defined contribution plans are expensed as the related service is

provided. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction

in future payments is available.

Financial assets and liabilities are offset and the net amount presented in the statement of financial

position when, and only when, the Company has a legal right to offset the amounts and intends either to

settle them on a net basis or to realise the asset and settle the liability simultaneously.

These are valued at lower of cost, which is calculated according to moving average method, and net

realizable value. Stores in transit are valued at invoice value including other charges, if any, incurred

thereon.

These are stated at the lower of cost and estimated net realizable value.



- Financial assets at fair value through profit and loss

- Held-to-maturity financial assets

- Loans and receivables; and

- Available-for-sale financial assets.

- Financial assets at fair value through profit and loss;

- Held-to-maturity financial assets; and

- Available-for-sale financial assets.

4.6.2

Loans and receivables includes loans, deposits, trade debts, other receivables including accrued interest

and cash and bank balances of the Company.

Cash and cash equivalents comprise cash balances and call deposits with maturities of three months or

less from the acquisition date that are subject to an insignificant risk of changes in their fair value, and

are used by the Company in the management of its short-term commitments.

As at 31 December 2017 no financial assets of the Company are classified under following categories:

The Company initially recognises debt securities issued and subordinated liabilities, if any, on the date

that they are originated. All other financial liabilities are recognised initially on the trade date, which is

the date that the Company becomes a party to the contractual provisions of the instrument.

The Company derecognises a financial liability when its contractual obligations are discharged, cancelled

or expired.

Cash and cash equivalents

Non-derivative financial liabilities

The Company classifies non-derivative financial assets into the following categories:

Financial liabilities are recognised initially at fair value less any directly attributable transaction costs.

Subsequent to initial recognition, these liabilities are measured at amortized cost, using the effective

interest rate method.

Other financial liabilities comprise trade payables and mark-up accrued.

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary

shares are recognised as a deduction from equity, net of any tax effects.

Share capital (Ordinary shares)

Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an

active market. Such assets are recognised initially at fair value plus any directly attributable transaction

costs. Subsequent to initial recognition, loans and receivables are measured at amortised cost using the

effective interest rate method, less any impairment losses. A provision for impairment of loans and

receivables is established when there is objective evidence that the Company will not be able to collect

all amounts due according to the original terms of receivables.

Loans and receivables




4.6.3 Derivative financial instruments

4.7 Impairment

Financial assets (including receivables)

Non-financial assets

Financial assets are assessed at each reporting date to determine whether there is objective evidence that

they are impaired. A financial asset is impaired if objective evidence indicates that a loss event has

occurred after the initial recognition of the asset, and that the loss event had a negative effect on the

estimated future cash flows of that asset that can be estimated reliably. Objective evidence that financial

assets are impaired may include default or delinquency by a debtor, indications that a debtor or issuer

will enter bankruptcy.

All individually significant receivables are assessed for specific impairment. All individually significant

receivables found not to be specifically impaired are then collectively assessed for any impairment that

has been incurred but not yet identified. Receivables that are not individually significant are collectively

assessed for impairment by grouping together receivables with similar risk characteristics.

The carrying amounts of non-financial assets other than inventories and deferred tax asset, are reviewed

at each reporting date to determine whether there is any indication of impairment. If any such indication

exists, then the asset’s recoverable amount is estimated. The recoverable amount of an asset or cash-

generating unit is the higher of its value in use and its fair value less costs to sell. In assessing value in

use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate

that reflects current market assessment of the time value of money and the risks specific to the asset. For

the purpose of impairment testing, assets that cannot be tested individually are grouped together into the

smallest group of assets that generates cash inflows from continuing use that are largely independent of

the cash inflows of other assets or groups of assets (the “cash-generating unit, or CGU”).

An impairment loss in respect of a financial asset measured at amortized cost is calculated as the

difference between its carrying amount and the present value of the estimated future cash flows

discounted at the asset’s original effective interest rate. Losses are recognized in profit and loss and

reflected in an allowance account against receivables. Interest on the impaired asset continues to be

recognized through the unwinding of the discount. When a subsequent event causes the amount of

impairment loss to decrease, the decrease in impairment loss is reversed through profit and loss account.

The Company’s corporate assets do not generate separate cash inflows. If there is an indication that a

corporate asset may be impaired, then the recoverable amount is determined for the CGU to which the

corporate asset belongs. An impairment loss is recognized if the carrying amount of an asset or its CGU

exceeds its estimated recoverable amount. Impairment losses are recognized in profit and loss account.

These are initially recorded at fair value on the date a derivative contract is entered into and are re-

measured to fair value at subsequent reporting dates. The method of recognizing the resulting gain or loss

depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item

being hedged. The Company does not apply hedge accounting for any derivatives.

Any gain or loss from change in fair value of derivatives that do not qualify for hedge accounting are

taken directly to profit and loss account.



4.8 Provisions

4.9 Contingent liabilities

Contingent liability is disclosed when:

-

-

4.10 Revenue recognition

Sale of goods

Interest

4.11 Compensated absences

4.12 Borrowings and their cost

there is a possible obligation that arises from past events and whose existence will be confirmed

only by the occurrence or non occurrence of one or more uncertain future events not wholly within

the control of the Company; or

there is present obligation that arises from past events but it is not probable that an outflow of

resources embodying economic benefits will be required to settle the obligation or the amount of

the obligation cannot be measured with sufficient reliability.

The Company accounts for compensated absence on the basis of unavailed earned leave balance of each

employee at the end of the year.

Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowing costs are

recognized as an expense in the period in which these are incurred except to the extent of borrowing cost

that are directly attributable to the acquisition, construction or production of a qualifying asset. Such

borrowing costs, if any, are capitalized as part of the cost of that asset.

A provision is recognized in the balance sheet when the Company has a legal or constructive obligation

as a result of a past event, and it is probable that an outflow of economic benefits will be required to

settle the obligation and a reliable estimate can be made of the amount of obligation. The amount

recognized as a provision reflects the best estimate of the expenditure required to settle the present

obligation at the end of the reporting period.

Impairment loss recognized in prior periods is assessed at each reporting date for any indications that the

loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the

estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent

that the asset’s carrying amount does not exceed the carrying amount that would have been determined,

net of depreciation or amortization, if no impairment loss had been recognized.

Revenue is recognised when the significant risks and rewards of ownership have been transferred to the

customer, recovery of the consideration is probable, the associated costs and possible return of goods can

be estimated reliably, there is no continuing management involvement with the goods, and the amount of

revenue can be measured reliably. Revenue is measured net of returns, trade discounts and sales tax.

Income from bank deposits and loans is recognized using the effective interest rate method.




4.13 Foreign currency translation

4.14 Taxation

Current

Deferred

4.15 Earnings per share

4.16 Dividend and other appropriations

5 Property, plant and equipment

Operating property, plant and equipment 5.1 6,521,945 5,500,059

Capital work in progress 5.2 505,159 1,305,729

7,027,104 6,805,788

The Company presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS

is calculated by dividing the profit after tax attributable to ordinary shareholders of the Company by the

weighted average number of ordinary shares outstanding during the year.

Dividend is recognised as a liability in the period in which it is declared and approved. Appropriations of

profit are reflected in the statement of changes in equity in the period in which such appropriations are

approved.

Provision for current taxation is based on taxable income at the enacted or substantively enacted rates of

taxation after taking into account available tax credits and rebates, if any. The charge for current tax

includes adjustments to charge for prior years, if any.

Deferred tax is recognized using balance sheet method, providing for temporary differences between the

carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for

taxation purposes. The amount of deferred tax provided is based on the expected manner of realization or

settlement of the carrying amount of assets and liabilities, using the enacted or substantively enacted rates

of taxation.

The Company recognizes a deferred tax asset to the extent that it is probable that taxable profits for the

foreseeable future will be available against which the asset can be utilized. Deferred tax assets are

reduced to the extent that it is no longer probable that the related tax benefit will be realized.

Transactions denominated in foreign currencies are translated into Pak Rupees, at the foreign exchange

rates prevailing at the date of transaction. Monetary assets and liabilities in foreign currencies are

translated into Pak Rupees at the foreign exchange rates at the balance sheet date. Exchange differences

are taken to the profit and loss account.

Income tax expense comprises current and deferred tax. Income tax expense is recognized in the profit

and loss account, except to the extent that it relates to items recognized directly in other comprehensive

income or below equity, in which case it is recognized in other comprehensive income or below equity

respectively.

2017 2016




5.1 Operating property, plant and equipment

Owned assets

Freehold

land

Factory building

on freehold land

Plant and

machinery

Furniture and

fittingsVehicles

Office

equipmentTotal

Cost

Balance at 1 January 2016 386,717 2,090,215 5,184,818 56,865 134,212 51,415

7,904,242

Additions -

9,499

1,354,121

4,271

17,371

1,628

1,386,890

Disposals -

-

(874)

(515)

(11,775)

(2,102)

(15,266)

Balance at 31 December 2016 386,717

2,099,714

6,538,065

60,621

139,808

50,941

9,275,866

Balance at 1 January 2017 386,717

2,099,714

6,538,065

60,621

139,808

50,941

9,275,866

Additions -

468,006

1,040,178

6,376

19,896

7,972

1,542,428

Disposals -

-

(3,799)

(331)

(11,038)

(107)

(15,275)


2,567,720

7,574,444

66,666

148,666

58,806

10,803,019

Rate of depreciation - %age - 4% 5% 20% 20% 25%

Accumulated depreciation

Balance at 1 January 2016 -

1,135,442

2,026,305

46,659

98,077

30,650

3,337,133

Depreciation -

188,634

235,602

4,722

13,938

9,357

452,253

Disposals -

-

(872)

(466)

(10,157)

(2,084)

(13,579)

Balance at 31 December 2016 -

1,324,076

2,261,035

50,915

101,858

37,923

3,775,807

Balance at 1 January 2017 -

1,324,076

2,261,035

50,915

101,858

37,923

3,775,807

Depreciation -

181,662

311,387

4,379

14,250

7,960

519,638

Disposals -

-

(3,672)

(331)

(10,261)

(107)

(14,371)

Balance at 31 December 2017 -

1,505,738

2,568,750

54,963

105,847

45,776

4,281,074

Carrying amounts

At 31 December 2016 386,717 775,638 4,277,030 9,706 37,950 13,018 5,500,059

At 31 December 2017 386,717 1,061,982 5,005,694 11,703 42,819 13,030 6,521,945

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - (Rupees in thousands) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

5.1.1

2017 2016

5.1.2 Depreciation is allocated as under: Note (Rupees in thousands)

Cost of sales 23 501,714 434,781

Distribution cost 24 5,925

5,225

Administrative expenses 25 11,999

12,247

519,638

452,253

5.1.3 Following assets were disposed-off during the year:

Book Sale

Description Sold to Cost value Proceeds

Vehicle Mr. Syed Waqar Alam 1,540

128

1,406

1,278

Tender

House no. 148/D-2,Area -D, Malir

Colony Karachi

Vehicle Mr. Irfan Bhatti 1,726

345

345

-

Company policy

House no. 33, Defence Block, Saeed

Colony no.2, Faisalabad

Vehicle Jubilee General Insurance 701

269

575

306

Insurance policy

Company Limited

Jubilee Insurance

House, Karachi

Assets with book value less

than Rs. 50 thousands

Miscellaneous 11,308

162

5,651

5,488

Tender and negotiations

2017 15,275 904 7,977 7,072

2016 15,266 1,685 7,138 5,453

The cost of fully depreciated assets which are still in use is Rs. 1,168,793 thousands (2016: Rs. 1,048,072 thousands).

----------------------- (Rupees in thousands) -----------------------

Gain Mode of disposal




5.2 Capital work in progress

Plant

expansion

projects

Land - note 5.2.1 - - 6,814 6,814 6,814

Civil works and buildings - 10,232 - 10,232 276,434

Plant and machinery - 391,939 - 391,939 788,428

Advances 62,774 26,590 - 89,364 200,201

Machinery in transit - 6,810 - 6,810 33,852

62,774 435,571 6,814 505,159 1,305,729

594,906 704,009 6,814

5.2.1

5.2.2


6 Intangibles

SAP and other computer softwares

Cost


Addition -



Addition -


Amortization


Amortization for the year 734



Amortization for the year 25 427


Amortization rate per annum (%) 20%

Carrying amounts

At 31 December 2016 427

At 31 December 2017 -

Amortization on intangibles is charged to administrative expenses.

Others 2017 2016

This represents full payment of Rs. 1,814 thousands (2016: Rs. 1,814 thousands) and legal cost incurred Rs.

5,000 thousands (2016: Rs. 5,000 thousands) for the Company's factory land in Faisalabad which was acquired

from the Government in 1953 but registration of title is still pending in the name of the Company.

Plant and machinery does not include any markup capitalised during the year (2016: Rs. 1,520 thousands

capitalised, calculated at the rates ranging from 6.47% to 6.76% per annum).

Co-Gen

plant

--------------------------- (Rupees in thousands) --------------------------------

2017

2016



2017 2016

7 Employees retirement benefits Note (Rupees in thousands)

Gratuity 7.1 134,004 187,290

Pension 7.1 44,976 53,894

178,980 241,184

7.1 Movements in the net assets / (liabilities) recognized in the balance sheet are as follows:

Gratuity Pension

2017 2016 2017 2016

------------------(Rupees in thousands)----------------------

Net assets / (liabilities) at the

beginning of the year 187,290 52,220 53,894 (37,540)

Expenses recognized (22,825) (40,341) (13,183) (19,555)

Contribution paid during the year 22,825 40,341 13,183 19,555

Actuarial gain / (loss) recognized (53,286) 135,070 (8,918) 91,434

Net assets / (liabilities) at the

end of the year 134,004 187,290 44,976 53,894

7.2 The amounts recognized in the profit and loss account are as follows:

Gratuity Pension

2017 2016 2017 2016


Current service cost (39,830) (46,856) (18,075) (17,056)

Interest cost (57,525) (68,006) (49,171) (49,002)

Interest income on plan assets 74,530 74,521 54,063 46,503

(22,825) (40,341) (13,183) (19,555)

7.3 The amounts recognised in other comprehensive income are as follows:

Gratuity Pension

2017 2016 2017 2016


Remeasurements of plan obligation from:

- Change in financial assumptions 32,620 32,672 5,264 (53,912)

- Experience adjustment on obligation (37,074) 84,934 14,822 138,775

(4,454) 117,606 20,086 84,863

Remeasurements of plan assets:

- Actual net return on plan assets 7,749 88,871 16,152 51,213

- Interest income on plan assets (74,530) (74,521) (54,063) (46,503)

- Experience adjustment 17,949 3,114 8,907 1,861

(48,832) 17,464 (29,004) 6,571

(53,286) 135,070 (8,918) 91,434

7.4 The amounts recognized in the balance sheet are as follows:

Gratuity Pension

2017 2016 2017 2016


Present value of the obligation (685,297) (623,140) (539,465) (515,403)

Fair value of plan assets 819,301 810,430 584,441 569,297

Net assets 134,004 187,290 44,976 53,894

Gratuity Pension

2017 2016 2017 2016

7.5 Movement in present value of defined

benefit obligation

Present value of defined benefit obligation

as at the beginning of the year (623,140) (776,115) (515,403) (561,535)

Current service cost (39,830) (46,856) (18,075) (17,056)

Interest cost (57,525) (68,006) (49,171) (49,002)

Actual benefits paid during the year 39,652 150,231 23,098 27,327

Actuarial gain / (loss) on obligation (4,454) 117,606 20,086 84,863

Present value of defined benefit obligation

as at the end of the year (685,297) (623,140) (539,465) (515,403)

7.6 Movement in fair value of plan assets

Fair value of plan asset as at the

beginning of the year 810,430 828,335 569,297 523,995

Interest income on plan assets 74,530 74,521 54,063 46,503

Actual benefits paid during the year (39,652) (150,231) (23,098) (27,327)

Actual contribution by the employer- normal 22,825 40,341 13,183 19,555

Net return on plan assets over interest income (48,832) 17,464 (29,004) 6,571

Fair value of plan asset as at the

end of the year 819,301 810,430 584,441 569,297

7.7 Actual return on plan assets

Expected return on plan assets 74,530 74,521 54,063 46,503

Net deficit on plan assets over interest income (48,832) 17,464 (29,004) 6,571

25,698 91,985 25,059 53,074

7.8 Plan assets comprise

Pakistan Investment Bonds (PIBs) - 192,192 7,283 138,347

Mutual funds 230,985 245,873 100,579 107,477

Treasury Bills (T-Bills) 324,656 91,516 302,178 139,263

Term Finance Certificates - - 158,147 -

Term Deposits 251,826 - - -

Cash at Bank 11,834 280,849 16,254 184,210

819,301 810,430 584,441 569,297

7.9 Analysis of Present value of defined

benefit obligation

Type of Members:

Management 443,918 410,512 - -

Non-management 241,379 212,628 - -

Active - - 305,827 283,307

Pensioners - - 233,638 232,096

685,297 623,140 539,465 515,403





Gratuity Pension

2017 2016 2017 2016

Vested / non-vested:

Vested benefits 604,042 470,693 434,170 415,518

Non-vested benefits 81,255 152,447 105,295 99,885

685,297 623,140 539,465 515,403

Type of Benefits:

Accumulated benefit obligation 354,651 308,105 425,911 403,974

Amounts attributed to future salary increases 330,646 315,035 113,554 111,429

685,297 623,140 539,465 515,403

7.10 Disaggregation of fair value of plan assets

Cash and cash equivalents (after

adjusting current liabilities):

Quoted 11,834 280,849 16,254 184,210

Investment in mutual funds:

Quoted 230,985 245,873 100,579 107,477

Debt instruments:

Quoted 324,656 283,708 309,461 277,610

Not quoted 251,826 - 158,147 -

576,482 283,708 467,608 277,610

Total fair value of plan assets 819,301 810,430 584,441 569,297

7.11

7.12

7.13

7.14

Gratuity Fund Pension Fund

2017 2016 2017 2016


Annual discount rate 9.50% 9.50% 9.50% 9.50%

Expected return on plan assets 9.50% 9.50% 9.50% 9.50%

Contribution rates (% of basic

salaries) 7.11% 14.86% 5.96% 10.47%

The expected return on plan assets is based on the market expectations and depends upon the asset portfolio of

the fund, at the beginning of the year.

The future contribution rates of these funds include allowances for deficit and surplus. Projected unit credit

method is used for valuation of these funds based on the following significant assumptions:

Plan assets does not include any investment in the Company's ordinary shares as at 31 December 2017 (2016:

Nil).

Expected contributions to gratuity fund and pension fund for the year ending 31 December 2018 are

Rs. 32,235 thousands and Rs. 16,212 thousands respectively.




Gratuity Fund Pension Fund

2017 2016 2017 2016


Expected rate of growth per annum

in future salaries:

- First year following valuation 12.00% 12.00% 10.50% 12.00%

- Second year following valuation 10.00% 10.00% 8.75% 10.00%

- Third year following valuation 10.00% 10.00% 8.75% 10.00%

- Long term (fourth year following

valuation and onwards) 8.75% 9.00% 8.75% 9.00%

Mortality rates

7.15

7.16

7.17 The main features of the employee retirement benefit schemes are as follows:

-

-

7.18

7.19 Sensitivity analysis

Change in

assumptions

Increase in

assumption

Decrease in

assumption

Increase in

assumption

Decrease in

assumption

Discount rate 0.5% 28,667 (30,937) 32,762 (36,421)

Salary growth rate 0.5% (29,369) 27,471 (10,697) 10,049

Gratuity Pension

--------------------------(Rupees in thousands)-------------------------

The above sensitivity analysis are based on a change in an assumption while holding all other assumptions

constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When

calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method

(present value of the defined benefit obligation calculated with the projected unit credit method at the end of the

reporting period) has been applied as when calculating the defined benefit obligation recognized within the

statement of financial position.

The weighted average duration of the defined benefit obligation is 8.68 years and 12.15 years (2016: 8.84 years

and 12.22 years) for gratuity and pension funds respectively.

These defined benefit plans exposes the Company to actuarial risks, such as longevity risk, currency risk,

interest rate risk and market (investment) risk.

No pension increase rate was assumed in respect of the existing as well as the prospective pensioners. The same

assumption was used during the last valuation.

Both the scheme are subject to the regulations laid down under the Income Tax Rules, 2002.

The implicit objective is that the contribution to the gratuity and pension schemes should remain reasonably

stable as a percentage of salaries, under the actuarial cost method employed.

Impact on defined benefit obligation

The sensitivity of the defined benefit obligation to changes in the weighted principal assumptions is as follows:

Under the gratuity scheme, the normal retirement age in case of managers and officers is 63 years and 60

years in case of staff and workers. A member shall be entitled to gratuity on resignation, termination,

retirement, early retirement, retrenchment, death and dismissal based on the Company's Service rules.

Under pension scheme the member shall be entitled to pension, subject to conditions laid down in the

rules, on reaching the normal retirement age, disability, early retirement or death in which case the

surviving spouse shall be entitled.

SLIC

(2001-05)-1

SLIC

(2001-05)-1SLIC

(2001-05)-1

SLIC

(2001-05)-1






2017 2016


8 Long term loans - secured

Staff loans outstanding:

Executives 8.1 15,357 13,587

Other employees 1,712 2,720

17,069 16,307

12 (7,252) (6,044)

9,817 10,263

8.1 Loans to executives

Opening balance 13,587 9,238

Disbursement during the year 8,400 10,900

Recoveries during the year (6,630) (6,551)

Closing balance 15,357 13,587

8.2

8.3 No loans were granted to the directors and chief executive officer of the Company.

8.4

2017 2016


9 Stores and spares

Mechanical Spares 545,716 515,925

Consumable Stores

Fuels 28,292 85,584

Supplies 58,714 65,724

632,722 667,233

Provision for slow moving and obsolete items 9.1 (33,121) (34,471)

599,601 632,762

Stores in transit 21,343 16,967

620,944 649,729

Loans to other employees represent house building loans provided to employees in accordance with the

Company's policy and are repayable over a period of five years. These loans are secured against the

employees provident fund. Loans to employees carry interest at the rate of 8% (2016: 8 %) per annum at

the end of the loan term.

Loans to executives represents car loan provided to executives in accordance with the Company's policy and

are repayable in 48 equal installments. These loans are either secured against the employees' provident

fund or the vehicle purchased against the loan which is under joint ownership of the employee and the

Company. Maximum aggregate balance outstanding during the year, at the end of any month, of loans to

executives was Rs. 16,994 thousands (2016 : Rs. 14,573 thousands).

Less: Current maturity

2017 2016


9.1 Provision for slow moving and

obsolete items


(Reversal) / provision for the year (1,350) 3,277


2017 2016


10 Stock in trade

Raw materials

- Corn and cobs 3,006,954 2,290,892

- Chemicals 85,803 83,792

- Packing materials 53,744 36,261

Work in process 78,396 90,012

Finished goods 10.1 1,159,072 1,194,950

4,383,969 3,695,907

Less: Provision for slow moving and obsolete stocks:

- Raw materials (1,975) (1,802)

- Finished goods (4,800) (1,214)

(6,775) (3,016)

4,377,194 3,692,891

10.1

2017 2016

11 Trade debts Note (Rupees in thousands)

Considered good

Unsecured:

Related parties 11.1 167,775 211,048

Others 182,451 136,374

350,226 347,422

Secured 11.2 770,780 633,831

1,121,006 981,253

Considered doubtful 1,446 460

1,122,452 981,713

Provision for doubtful debts 11.3 (1,446) (460)

1,121,006 981,253

This includes imported finished goods amounting to Rs. 33,773 thousands (2016: Rs. 43,287 thousands)

out of which goods in transit amounts to Rs. 1,336 thousands (2016: 16,195 thousands).

Provision for slow moving and obsolete stock, and any reversal of provision, is included in cost of sales.





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2017 201611.3 Provision for doubtful debts Note (Rupees in thousands)

Opening balance 460 542 Provision / (reversal) for the year 24 3,740 (82) Bad debts written off during the year (2,754) - Closing balance 1,446 460

2017 201612 Loans and advances (Rupees in thousands)

Loans and advances - considered good:

Suppliers of goods and services 84,132 74,562 Employees 12.1 6,778 7,918 Current maturity of long term loans 7,252

6,044 98,162

88,524

12.1

2017 2016

13 Trade deposits and short term prepayments (Rupees in thousands)

Security deposits 34,444

34,384

Prepayments 101,556

115,416

136,000

149,800

14 Other receivables

Other receivables - farmers balances:

Considered good 3,086

1,066 Considered doubtful 1,675

1,675

4,761

2,741

Less: Provision for doubtful balances 14.1 (1,675)

(1,675) 3,086

1,066

Due from Affiliates -

229

Others 22,286

14,818 25,372

16,113

14.1 Provision for doubtful balances

There was no movement during the current and previous year.

15 Cash and bank balances

Cash at banks

- current accounts 160,001

97,323

- saving accounts 15.1 2,884,563

3,554,468

3,044,564

3,651,791

Cheques in hand 98,157

127,541

3,142,721

3,779,332

Cash in hand

- local currency 6,369

8,891

- foreign currency 146

507

6,515

9,398

3,149,236

3,788,730

15.1

No provision has been made against receivables from related parties, as none of the amounts receivable are

considered impaired. Reversal of provision for doubtful debts is credited in other income.

No advances were given to executives, directors and chief executive officer of the Company during the year.

These carry profit at rates ranging from 2.09 % to 6 % (2016: 3.73 % to 6.9 %) per annum.



2017 2016

16 Trade and other payables Note (Rupees in thousands)

Creditors 353,293 391,329

Advances from customers 275,485 217,496

Security deposits from dealers and contractors 16.1 692,688 645,528

Other deposits 16.2 2,733 1,310

Accrued liabilities 473,864 346,678

Worker welfare fund 16.3 109,664 98,235

Workers' profit participation fund 16.4 303,056 285,902

Employees provident fund 16.5 11,767 10,429

Withholding tax payable 22,602 10,229

Sales tax payable 272,448 261,371

Dividend payable 898,743 5,117

Unclaimed dividend 45,212 10,730

3,461,555 2,284,354

16.1

16.2

2017 2016

16.3 Workers' welfare fund (Rupees in thousands)


Provision for the year 117,114 97,659

Payment to the fund (105,685) (92,014)


16.4 Workers' profit participation fund


Provision for the year 302,519 285,369

Payment to the fund (285,365) (229,909)


16.5 Provident fund related disclosures:

(Unaudited)

2017 2016


Size of the fund - total assets 1,012,740 978,928

Cost of investments made 804,341 765,205

Percentage of investments - (% of total assets) 79.42% 78.17%

Fair value of investments 824,866 807,103

As per the terms of agreement between dealers and contractors, the Company can utilize these deposits

in the normal course of business.

The Company operates funded contributory provident fund scheme for all its permanent and eligible

employees. The following information is based on the un - audited financial statements of the provident

fund as at 31 December 2017:

These represent deposits held against tenders for the sale of scrap.

16.5.1 The break-up of investments is as follows:

(Rupees in

thousands)%

(Rupees in

thousands)%

Pakistan Investment Bonds - - 298,500 36.98%

Treasury Bills 619,775 75.14% 281,525 34.88%

Meezan Mutual Funds 194,206 23.54% 205,623 25.48%

Bank Placements 10,885 1.32% 21,455 2.66%

824,866 100% 807,103 100%

2017 2016


17 Deferred taxation

Taxable temporary difference

Accelerated tax depreciation 813,725 909,226

Employees retirement benefits 53,693 72,354

Deductible temporary difference

Others (12,905) (13,174)

854,513 968,406

17.1 Deferred taxation

Movement in deferred taxation is as follows:

Opening

Charged to

profit and

loss

Charged to

other

comprehensive

income

Closing


Accelerated tax depreciation 909,226 (95,501) - 813,725

Employees retirement benefits 72,354 - (18,661) 53,693


Others (13,174) 269 - (12,905)

968,406 (95,232) (18,661) 854,513

The investments out of the provident fund have been made in accordance with the provisions of Section

227 of the repealed Companies Ordinance, 1984 and the rules formulated for this purpose.

2017 2016

The Company will comply with the limits for investments in listed securities as required under section 3

of Employees' Provident Fund (Investment in Listed Securities) Rules, 2016 (Rules) dated 17 August

2016, with in two years from the date of commencement of these Rules.

2017

-------------------------(Rupees in thousands)-------------------------




OpeningCharged to

profit and loss

Charged to other

comprehensive

income

Closing


Accelerated tax depreciation 657,861 251,365 - 909,226

Employees retirement benefits 4,697 - 67,657 72,354


Others (17,668) 4,494 - (13,174)

644,890 255,859 67,657 968,406

2017 2016 2017 2016

----(Number of shares)---- ----(Rupees in thousands)----

18 Authorized, issued, subscribed and

paid up capital

Authorized share capital - ordinary

shares of Rs.10 each 20,000,000 20,000,000 200,000 200,000

18.1 Issued, subscribed and

paid up capital

Ordinary shares of Rs. 10 each:

- Fully paid up for cash 1,858,991 1,858,991 18,590 18,590

- Issued for other than cash 36,294 36,294 363 363

- Issued as bonus shares 7,341,143 7,341,143 73,411 73,411

9,236,428 9,236,428 92,364 92,364

18.2

18.3 All ordinary shares rank equally with regard to the Company's residual assets. Holders of these shares

are entitled to dividends as declared from time to time and are entitled to one vote per share at general

meetings of the Company.

2016

-------------------------(Rupees in thousands)-------------------------

Ingredion Incorporated, Chicago, U.S.A. (the holding company), holds 6,494,243 (2016:6,494,243) ordinary

shares of Rs. 10 each as at 31 December 2017.



2017 2016


19 Reserves

Capital

Share premium 19.1 36,946 36,946

Other 19.2 941 941

37,887 37,887

Revenue

General reserve 207 207

Unappropriated profit 12,171,721 12,903,042

12,171,928 12,903,249

12,209,815 12,941,136

19.1

19.2

20 Contingencies and commitments

20.1 Contingencies

20.1.1

20.1.2

20.2

20.3

2017 2016


20.4 Commitments

Commitments in respect of capital expenditure 79,530 283,774

Commitment in respect of purchase of corn 3,610,238 5,593,724

Commitment in respect of forward exchange contracts 67,598 116,483

21 Short term running finances - secured

21.1

21.2

The aggregate financing facility available from commercial banks is Rs. 2,500,000 thousands (2016:

Rs. 2,500,000 thousands) which remains unutilized at the balance sheet reporting date.

This reserve can be utilized in accordance with the provision of section 81 of the Companies Act, 2017.

This reserve was created under section 15BB of the Income Tax Act, 1922 to avail the tax exemption in

prior years.

Counter guarantees given by the Company to its bankers as at balance sheet reporting date amounting to

Rs. 278,630 thousands (2016: Rs. 164,300 thousands).

Certain labor cases are pending before the labor courts and their financial effect cannot be reasonably

determined due to their nature. The possibility of any outflow for settlement of these claims is

considered remote.

Land registration fee as per note 5.2.2.

The rate of markup ranges from 6.50 % to 6.79 % per annum (2016: 6.47 % to 6.76 % per annum).

These facilities are secured by joint pari pasu hypothecation charge on current assets of the Company,

amounting to Rs.2,777,778 thousands and are subject to repricing on monthly/quarterly basis.

Tax contingencies as disclosed in note 29.




21.3

2017 2016


22 Sales - net

Domestic 28,319,110 27,505,947

Export 1,385,531 1,294,471

29,704,641 28,800,418

Less: Sales tax 3,676,824 3,491,490

Trade discount and commission 9,713 11,343

(3,686,537) (3,502,833)

26,018,104 25,297,585

23 Cost of sales

Raw material consumed:

Corn 11,964,933 11,442,941

Chemicals 319,276 267,342

Packing material 383,040 349,090

12,667,249 12,059,373

Factory expenses:

Salaries, wages and amenities 23.1 1,290,149 1,167,305

Spares consumed 235,329 235,668

Logistics and handling 579,057 538,363

Fuel and power 2,957,894 2,643,880

Rent, rates and taxes 10,082 9,825

Consumables 17,003 18,583

Repairs and maintenance 52,556 37,364

Depreciation 5.1.2 501,714 434,781

Insurance 12,359 14,211

Factory general expenses 137,496 123,021

5,793,639 5,223,001

18,460,888 17,282,374

Add: Opening work in process 90,012 86,447

18,550,900 17,368,821

Less: Closing work in process 10 (78,396) (90,012)

Cost of production 18,472,504 17,278,809

Add: Opening finished goods stock - own manufactured 1,151,663 2,124,708

19,624,167 19,403,517

Less: Closing finished goods stock - own manufactured (1,125,298) (1,151,663)

Cost of goods sold -own manufactured products 18,498,869 18,251,854

Cost of goods sold -purchased products 93,765 93,292

Cost of goods sold 18,592,634 18,345,146

23.1 Salaries, wages and amenities include Rs. 26,764 thousands (2016: Rs. 32,010 thousands) in respect of

contribution to pension and gratuity funds and Rs. 28,991 thousands (2016 : Rs. 22,978 thousands) in

respect of contribution to provident fund.

The unutilized facility for letters of credit as on 31 December 2017 amounts to Rs. 507,918 thousands

(2016: Rs. 426,305 thousands).






2017 2016

24 Distribution expenses Note (Rupees in thousands)

Salaries and amenities 24.1 105,853 89,661 Traveling and automobile expenses 15,688 16,620 Provision of technical support fee 9,979 19,481 Freight and distribution 220,198 192,951 Comission expense 252,664 236,755 Insurance 2,883 2,845 Rent, rate and taxes 3,419 2,689 Repair and maintenance 81 57 Electricity charges 733 1,072 Printing and stationery 485

297

Telephone and postage 2,667

3,744

Advertising and sales promotion 1,013

1,778

Depreciation 5.1.2 5,925

5,225

Market research and development 167

609

Provision against doubtful debts 11.3 3,740

-

Miscellaneous expenses 13,273

9,670

638,768

583,454

24.1

2017 2016

25 Administrative expenses Note (Rupees in thousands)

Salaries and amenities 25.1 277,835

267,880 Traveling and automobile expenses 25,436

26,865

Insurance 1,549

1,110

Rent, rates and taxes 2,450

2,458

IT, networking and data communication 136,896

87,139

Repair and maintenance 125

64

Electricity charges 1,579

1,582

Printing and stationery 1,359

1,801

Telephone and postage 3,615

4,476

Legal and professional charges 5,673

5,211

Depreciation 5.1.2 11,999

12,247

Amortization of intangible assets 6 427

734

Auditors' remuneration 25.2 3,276

3,120

Miscellaneous expenses 7,486

9,391

Donation and charity 25.3 7,941

3,147

487,646

427,225

25.1

2017 2016

25.2 Auditors' remuneration (Rupees in thousands)

Statutory audit fee 1,344

1,280

Review of half yearly accounts 441

420

Services in connection with review and reporting of

accounts to Ingredion Inc. (formerly CPI Inc.) 1,186

1,130

Audit of gratuity and pension funds 121

115

Miscellaneous certifications 42

40

Out of pocket expenses reimbursed 142

135

3,276

3,120

25.3

Salaries, wages and amenities include Rs. 2,618 thousands (2016: Rs. 6,317 thousands) in respect of

contribution to pension and gratuity funds and Rs. 4,282 thousands (2016: Rs. 3,953) thousands in respect of

contribution to provident fund.

Salaries, wages and amenities include Rs. 6,627 thousands (2016: Rs. 21,569 thousands) in respect of

contribution to pension and gratuity funds and Rs. 9,482 thousands (2016 : Rs. 9,809 thousands) in respect of

contribution to provident fund.

This represents donation to different associations and trusts. None of Directors has any interest in the donation.



2017 2016

26 Other income Note (Rupees in thousands)

Income from financial assets

Mark up on staff loans and profit on bank deposits 110,948 122,718

Foreign exchange gain 2,721

Reversal of provision against doubtful debts - 82

Income from non-financial assets

Profit on sale of scrap 70,936 62,742

Profit on sale of property, plant and equipment 7,072 5,453

Miscellaneous income 4,225 6,825

193,181 200,541

27 Other expenses

Workers' welfare fund 16.3 117,114 97,659

Workers' profit participation fund 16.4 302,519 285,369

Foreign exchange loss 5,974 -

Loss on sale of damaged corn - 34,063

425,607 417,091

28 Finance cost

Mark up on short term running finances - 9

Bank charges and commission 15,615 17,826

15,615 17,835

29 Taxation

Current Taxation

- for the year 1,618,249 1,470,770

- prior year 135,741 101,315

1,753,990 1,572,085

Deferred Taxation (95,232) 255,859

1,658,758 1,827,944

2017 2016

29.1 Reconciliation of effective tax rate:

Applicable tax rate 30.00 31.00

Effect of permanent differences 0.04 (0.06)

Effect of prior period adjustments 0.56 0.96

Effect of presumptive tax regime (0.73) (1.12)

Effect of tax credits (1.76) -

Effect of others (0.71) 1.25

Average effective tax rate (tax expense

divided by profit before tax) 27.41 32.03

29.2

----------Percentage----------

The Income Tax Department has charged tax of Rs. 81,078 thousands for the assessment year 2001-

2002 (financial year ended 30 September 2000) under section 12(9A) of the Income Tax Ordinance,

1979 (Repealed) on the allegation that the dividend distribution by the Company was less than 40% of

its after tax profits. Against this levy, the Company filed an appeal with the Commissioner of Income

Tax (Appeals), which was rejected. The Company preferred an appeal with the Income Tax Appellate

Tribunal (ITAT) against the order of CIT (Appeals). The ITAT vide order dated 21 April 2006 decided

the case in favor of the Company and confirmed that levy of tax under section 12(9A) was against the

-

29.3

29.4

29.5

29.6

29.7 While finalising income tax assessment for the tax year 2015, the ACIR made certain add backs with

the aggregated tax impact of Rs. 20 million of which Rs. 5 million has been paid. Against the amended

order, the Company has filed appeal before CIR (Appeals) whereby the case is heard however appellant

order is awaited till date. The Company has created a provision of the complete amount in the financial

statements.

While finalising income tax assessment for the tax year 2014, the ACIR made certain add backs with

the aggregated tax impact of Rs. 52.272 million of which Rs. 26.5 million has been paid in current year.

Against the amended order, the Company has filed appeal before CIR (Appeals), whereby the case is

heard however appellant order is awaited till date. The Company has created a provision of the

complete amount in the financial statements.

The Income Tax Return of the Company for Tax year 2011 was selected for audit under section 177 of

the Income Tax Ordinance, as a result of audit proceedings; Deputy Commissioner Inland Revenue

passed the amended order under section 122(1) of the Ordinance and raised demand amounting to Rs.

31,855 thousands.

The taxation officer under section 161/205 of the Income tax Ordinance, 2011 (the Ordinance) created

tax demand of Rs. 51,935 thousands on the grounds that tax was deducted at lower rates, on payment of

dividends to non-residents for the tax years 2004 to 2006. The Company filed appeal to Commissioner

Income Tax (Appeals) and upon rejection filed an appeal before Appellate Tribunal Inland Revenue

(ATIR) who decided the case in favour of the Company. The Tax Department has filed the reference

application before Lahore High Court (LHC) which was rejected by LHC. Against the order of LHC,

the Tax Department filed appeal before the Supreme Court of Pakistan, which is pending for hearing.

The management is confident that the case will be decided in the favor of the Company.

The Deputy Commissioner Inland Revenue (DCIR) under section 161(1A) of the Ordinance objected

that the tax was deducted at lower rates on payment of dividends to non-residents for the tax year 2009

to 2015. The Company filed writ petition against the said notice before the Court which directed the

DCIR to consider the provisions of the Ordinance, the relevant double taxation treaty and the judgments

of ATIR in respect of tax years 2004 to 2006 and ordered to charge tax on dividend income at the lower

rates. The DCIR after considering the Company's reply in light of the court order issued another notice

to the Company showing intention to charge tax at higher rate, against which the Company filed a

second petition before the Court. The Court directed DCIR to determine the application and relevance

of its order passed in this regard. The proceedings are still pending and no notice from DCIR has been

received so far.

The management believes that this case will be decided in the favor of the Company. The legal advisors

of the Company have concurred with the management's view. The Company has paid Rs. 58,613

thousands in prior years and has also made provision of the full amount in the financial statements.

provisions of the law and directed the assessing officer for decision in accordance with the provisions

of amended clause 59 of Part IV, Second Schedule to the repealed Income Tax Ordinance, 1979. The

Income Tax Department has moved to Lahore High Court on 17 October 2006, against the orders of

ITAT. However, on 9 September 2015, Lahore High Court has transferred back the case to ITAT for

reconsideration.

The Company has filed the appeal against order passed before the Commissioner Inland Revenue

(Appeals) who partially allowed the appeal to the Company. The tax department and the Company filed

appeals before ATIR, which is pending adjudication. The Company has paid Rs. 27,282 thousands and

has also made provision of the full amount in the financial statements.






2017 2016

30 Earnings per share - basic and diluted

30.1 Earnings per share - basic

Profit attributable to ordinary

shareholders (Rupees in thousands) 4,392,257 3,879,431

Weighted average number of ordinary shares (Numbers) 9,236,428 9,236,428

Earnings per share - basic (Rupees) 475.54 420.01

30.2 Earnings per share - diluted

2017 2016


31 Cash generated from operations

Profit before tax 6,051,015 5,707,375

Adjustment for:

Depreciation of property, plant and equipment 519,638 452,253

Amortization of intangible assets 427 734

Provision for employees retirement benefits 36,008 59,896

Provision / (reversal of provision) for doubtful debts 3,740 (82)

Provision for slow moving and obsolete items 2,409 5,159

Gain on disposal of property, plant and equipment (7,072) (5,453)

Loss on sale of damaged corn - 34,063

Interest income (110,948) (122,718)

Finance cost 15,615 17,835

459,817 441,687

Cash generated from operations before

working capital changes 6,510,832 6,149,061

Effect on cash flow due to working capital changes

Increase / (decrease) in current assets:

Stores and spares 30,135 (38,469)

Stock in trade (688,062) (205,289)

Trade debts (143,493) 22,958

Loans and advances (8,430) 6,862

Trade deposits and short term prepayments 13,800 (5,449)

Other receivables (9,716) 10,710

(805,766) (208,677)

Increase in current liabilities:

Trade and other payables 249,093 177,440

Net decrease in working capital (556,673) (31,237)

Cash generated from operations 5,954,159 6,117,824

There is no dilution effect on basic earnings per share, as the Company has no such commitments.


No

tes t

o t

he

Fin

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cia

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tem

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tsF

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the y

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201

7

32F

inan

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inst

rum

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- F

air

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es a

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ris

k m

anag

emen

t

32.1

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mea

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men

t of

fin

anci

al in

stru

men

ts

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is th

e pr

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that

wou

ld b

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to tr

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pres

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on a

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- - -

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er

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and

fi

nan

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Der

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31 D

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201

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and

fina

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(Lev

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)

Fai

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Car

ryin

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oun

t

- -

- -

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pee

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201

6

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mea

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fai

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the y

ear

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1 D

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201

7




32.2 Risk management of financial instruments

- Credit risk

- Liquidity risk

- Market risk

32.2.1 Risk management framework

32.2.2 Credit risk

- Monitoring of debts on continuous basis.

- Application of credit limits to its customers.

- Obtaining adequate deposits / collaterals where needed.

32.2.2.1 Exposure to credit risk

2017 2016

Note

Long term loans 8 17,069 16,307

Trade debts 11 1,121,006 981,253

Loans and advances 12 6,778 7,918

Trade deposits 34,444 34,384

Other receivables 14 25,372 16,113

Bank balances 15 3,142,721 3,779,332

4,347,390 4,835,307

Secured 787,849 650,138

Unsecured 3,559,541 4,185,169

4,347,390 4,835,307

The Company finances its operations through equity, borrowings and management of working capital with a view to obtain

a reasonable mix between the various sources of finance to minimize the finance related risks to the entity.


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

The Company's overall risk management policy focuses on the unpredictability of financial markets and seeks to minimize

potential adverse effects on the Company's financial performance.

The Board of Directors has overall responsibility for establishment and over sight of the Company's risk management

framework. The executive management team is responsible for developing and monitoring the Company’s risk management

policies. The team regularly meets and any changes and compliance issues are reported to the Board of Directors through

the audit committee.

The audit committee oversees compliance by management with the Company’s risk management policies and procedures,

and reviews the adequacy of the risk management framework in relation to the risks faced by the Company.

Credit risk represents the financial loss that would be recognised at the balance sheet date if the counterparties fail

completely to perform as contracted / fail to discharge an obligation / commitment that it has entered into with the

Company. Concentration of credit risk arises when a number of counterparties are engaged in similar business activities, or

have similar economic features that would cause their ability to meet contractual obligations to be similarly affected by

changes in economic, political or other conditions. Concentration of credit risk indicates the relative sensitivity of a

company’s performance to developments affecting a particular industry. The Company manages its credit risk by the

following methods:

The carrying values of financial assets represent the maximum credit exposure before any credit enhancement. The

maximum exposure to credit risk at the reporting date is as follows:



32.2.2.2 Credit quality of financial assets

32.2.2.2.1 Bank balances

2017 2016

Short term Long term

Meezan Bank Limited A-1+ AA JCR-VIS 514,992 575,057

Standard Chartered Bank (Pakistan) Limited A 1+ AAA PACRA 214,145 94,189

Citi Bank Limited P 1 A2 Moody's 248 161

MCB Bank Limited A 1+ AAA PACRA 504,463 1,104,861

Habib Bank Limited A-1+ AAA JCR-VIS 415,667 898,447

National Bank of Pakistan A 1+ AA+ PACRA 1,493,196 1,106,617 3,142,711 3,779,332

32.2.2.2.2 Trade debts

The maximum exposure to credit risk for trade debts by geographic regions was:

2017 2016

Note

Domestic 993,202 833,870

Foreign 127,804 147,382

1,121,006 981,252

The aging of trade receivables that are not impaired at the reporting date is:

Neither past due nor impaired 1,059,244 936,809

Past due:

1-30 days 29,404 38,913

31-60 days 29,876 352

61-90 days 1,013 406

91-365 days 2,915 5,232

63,208 44,903

Provision for doubtful debts 11.3 (1,446) (460)

1,121,006 981,252

32.2.2.2.3 Other financial assets

32.2.2.2.4 Derivatives

All transactions are settled / paid for upon delivery. The Company's policy is to enter into financial instrument contract by

following internal guidelines such as approving counterparties and approving credits.

Long term loans, short term loans, trade deposits and other receivables are mostly due from related parties, employees and

Government institutions. Based on past experience the management believes that no impairment allowance is necessary in

respect of these financial assets. There are reasonable grounds to believe that these amounts will be recovered in due course

of time.

The derivatives are entered with banks and financial institution counterparties, which are rated AA based on JCR-VIS

ratings.



To manage exposure to credit risk in respect of trade receivables, management performs credit reviews taking into account

the customer's financial position, past experience and other factors. Where considered necessary, advance payments are

obtained from certain parties. Sales made to major customers are secured through security deposits, bank guarantees and

letters of credit.

The credit quality of financial assets can be assessed by reference to external credit ratings or to historical information about

counterparty:

Rating agencyRating

Banks




32.2.2.2.5 Concentration risk

2017 2016

Paper and Board 120,369 57,215

Confectionary 194,361 130,577

Textile 68,329 34,647

Poultry 16,232 4,530

Pharmaceuticals 598 32

Chemical & Allied Industries 6,325 239

Dealers 716,239 754,473

Bank 3,142,721 3,779,332

Employees 23,847 30,269

Others 61,491 52,171

Provision for doubtful balances (3,122) (2,135)

4,347,390 4,841,350

32.2.3 Liquidity risk

Carrying

amount

Contractual

cash flows

Up to one

year or less

More than

one year

Non- derivative financial liabilities

2,475,368 2,475,368 2,475,368 -

Carrying

amount

Contractual

cash flows

Up to one year

or less

More than

one year

Non- derivative financial liabilities

1,411,121 1,411,121 1,411,121 -

Mark up accrued on short

term running finances 14 14 14 -

1,411,135 1,411,135 1,411,135 -

The gross outflows disclosed in the above table represents the contractual undiscounted cashflows relating to derivative

financial liabilities held for risk management purposes and which are not usually closed out before contractual maturity. The

disclosure shows net cash flow amounts for derivatives that are net - cash - settled.

----------------------- (Rupees in thousand) ----------------------------

Trade and other payables

2017

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company's

approach to managing liquidity is to ensure as far as possible to always have sufficient liquidity to meet its liabilities when

due. The Company is not materially exposed to liquidity risk as substantially all obligations / commitments of the Company

are short term in nature and are restricted to the extent of available liquidity. In addition, the Company has obtained

overdraft facilities from various commercial banks to meet any deficit, if required to meet the short term liquidity

commitments.

The following are the remaining contractual maturities of financial liabilities:

----------------------- (Rupees in thousand) ----------------------------

2016

Trade and other payables


Concentration of credit risk exists when the changes in economic or industry factors similarly affect groups of

counterparties whose aggregate credit exposure is significant in relation to the Company's total credit exposure. The

Company's portfolio of financial assets is broadly diversified and all other transactions are entered into with credit-worthy

counterparties there-by mitigating any significant concentrations of credit risk.



32.2.4 Market risk

32.2.4.1 Currency risk

USD USD

2017 2016

Foreign debtors 1,110,372 1,412,039

Foreign currency bank balance 1,320 4,964

Trade and other payables (761,013) (1,161,666)

Net balance sheet exposure 350,679 255,337

Forward exchange contracts 611 1,116

Net exposure 351,290 256,453

The following significant exchange rates have been applied:

2017 2016 2017 2016

USD to PKR 105.32 104.72 110.70 104.38

Sensitivity analysis:

2017 2016

Effect on profit and loss

US Dollar 3,889 2,677

32.2.4.2 Interest rate risk

2017 2016 2017 2016

Financial assets

Fixed rate instruments:

Long term loans 8.0% 8.0% 17,069 16,307

Variable rate instruments:

Bank balances - saving 2.09% to 6% 3.7% to 6.9% 2,884,563 3,554,468

2,901,632 3,570,775

Carrying amount Effective rate

Interest rate risk is the risk that the fair values of future cash flows of a financial instrument will fluctuate because of

changes in market interest rates. At the reporting date the interest rate profile of the Company's significant interest bearing

financial instruments was as follows:

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 is exposed to currency risk on import of project related capital and stores and spares

items and export of goods mainly denominated in US dollars and on foreign currency cash and bank balances. The

Company's exposure to foreign currency risk for US Dollars is as follows:

Market risk is the risk that changes in market price such as foreign exchange rates, interest rates and equity prices will effect

the Company's income or the value of its holdings of financial instruments. The Company is not exposed to major market

risks as at 31 December 2017.

Average rate for the year

At reporting date, if the PKR had strengthened by 10% against the foreign currencies with all other variables held constant,

before tax profit for the year would have been lower by the amount shown below, mainly as a result of net foreign exchange

gain on translation of foreign debtors, foreign currency bank account and trade and other payables.

Reporting date rate


The weakening of the PKR against foreign currencies would have had an equal but opposite impact on the post tax loss.

The sensitivity analysis prepared is not necessarily indicative of the effects on profit for the year and assets / liabilities of

the Company.

- - - - - - - (Percentage) - - - - - - - (Rupees in thousands)




Fair value sensitivity analysis for fixed rate instruments

Cash flow sensitivity analysis for variable rate instruments

Increase Decrease

As at 31 December 2017 1,109 (1,109)

As at 31 December 2016 1,227 (1,227)

32.2.4.3 Other price risk

32.2.4.4 Capital management

The Company's objectives when managing capital are:

(i)

(ii)

33 Remuneration of Chief Executive, Directors and Executives

2017 2016 2017 2016 2017 2016

Managerial remuneration 7,193 9,941 4,853 4,519 146,996 146,257

Rent, medical and

other allowances 6,713 5,458 6,335 4,225 151,066 137,073

Bonus and leave encashment 5,909 18,367 4,995 3,141 62,465 54,298

Retirement benefits 1,333 2,277 606 1,035 17,711 30,259

Club subscription - 20 - - - 24

21,148 36,063 16,789 12,920 378,238 367,911

Number 1 1 1 1 136 127

33.1

33.2

Chief Executive and

Managing DirectorExecutive Director Executives

The remuneration of Executive Director (ED) includes remuneration of outgoing ED, Mr. Abid Ali, from January to June

2017 and remuneration of incoming ED, Mr. Muhammad Asdaf , from July to December 2017.

The Company does not account for any fixed rate financial assets and liabilities at fair value through profit and loss.

Therefore a change in interest rates at the reporting date would not affect profit and loss account.

Meeting fees aggregating to Rs. 280 thousands (2016: Rs 280 thousands) were paid to 4 (2016: 4) non-executive directors

for attending board meetings. In addition, Chief Executive & Managing Director (CE&MD), full time working director and

some executives are provided with company maintained car. Number of non-executive directors of the Company as at 31

December 2017 are 9 (2016: 9).

- - - - - - - - - - - - - - - - - - - - - - - - - - - - (Rupees in thousands) - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Profit and loss 100 bps


A change of 100 basis points in interest rates at the reporting date would have (decreased) / increased profit for the year by

the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain

constant.

The Company manages the capital structure in the context of economic conditions and risk characteristics of the underlying

assets. In order to maintain or adjust the capital structure, the Company may, for example, adjust the amount of dividends

paid to shareholders and issue new shares.

For working capital requirement and capital expenditure, the Company relies substantially on short term borrowings.

The sensitivity analysis prepared is not necessarily indicative of the effects on profit for the year and assets / liabilities of the

Company.

Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes

in market prices (other than those arising from interest rate risk or currency risk). The company is not exposed to any price

risk as there are no financial instruments at the reporting date that are sensitive to price fluctuations.

The Board's policy is to maintain an efficient capital base so as to maintain investor, creditor and market confidence and to

sustain the future development of its business. The Board of Directors monitors the return on capital employed, which the

Company defines as operating income divided by capital employed. The Board of Directors also monitors the level of

dividends to ordinary shareholders.

to safeguard the entity's ability to continue as a going concern, so that it can continue to provide returns for

shareholders and benefits for other stakeholders, and

to provide an adequate return to shareholders.


No

tes t

o t

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Fin

an

cia

l Sta

tem

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tsF

or

the y

ear

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ece

mber

2017

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her

e in

th

ese

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anci

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tate

men

ts a

re a

s fo

llo

ws:

20

17

20

16

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sin

g

bal

ance

[as

set/

(lia

bil

ity

)]

Clo

sing

bal

ance

[as

set/

(lia

bil

ity)

]

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al v

alu

e of

tran

sact

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al v

alue

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ion

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ure

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d d

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d

par

ty t

ran

sact

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Nat

ure

of

rela

tion

ship




2017 2016

------(Metric tons)------

35 Plant capacity and production

Average grind capacity per day 1,850 1,850

Grind capacity for 350 working days 647,500 647,500

Actual days worked 324 301

Actual grind 531,905 497,385

36 Number of employees

The Company has employed following number of persons including permanent and contractual staff:

2017 2016

(Number of persons)

Total number of employees as at 31 December 2,182 2,131

Average number of employees during the year 2,157 2,114

37 Use of estimates and judgments

a) Taxation - (note 4.14 & 29)

b) Useful life of depreciable assets- (note 4.1 & 5.1)

c) Useful life of intangibles- (note 4.2 & 6)

d) Employees retirement benefits- (note 4.3 & 7)

e) Provision against stores and spares and stock in trade (note 4.4 & 4.5)

f) Provision for doubtful debt- (note 4.8 & 11)

g) Provision and contingencies- (note 4.8 & 20)

The preparation of financial statements in conformity with approved accounting standards requires

management to make judgments, estimates and assumptions that effect the application of policies and reported

amounts of assets and liabilities, income and expenses. The estimates and associated assumptions and

judgments are based on historical experience and various other factors that are believed to be reasonable under

the circumstances, the result of which form the basis of making the judgment about carrying values of assets

and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revision to accounting estimates

are recognized in the period in which the estimate is revised if the revision effects only that period, or in the

period of revision and future periods if revision affects both current and future periods. The areas where

various assumptions and estimates are significant to Company's financial statements or where judgments were

exercised in application of accounting policies are as follows:


No

tes t

o t

he

Fin

an

cia

l Sta

tem

en

tsF

or

the y

ear

ended 3

1 D

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mber

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17

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f th

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ent

of li

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s to

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h fl

ows

aris

ing

from

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acti

viti

es.

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on s

hor

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rm

run

nin

g fi

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ces

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ncl

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are

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pro

pri

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pro

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er r

eser

ves

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al

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ance

as

at 0

1 Ja

nuar

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5,

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10,7

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s fr

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(4

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)

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al c

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ges

from

fin

anci

ng

cash

flow

s(1

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9)

92

8,10

8

-

-

(5

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(4

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ense

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end

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(3

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al li

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ted

oth

er c

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15,6

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(34,

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-

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15

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al e

qu

ity

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ted

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er c

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ges

-

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4,34

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g as

at

31 D

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94

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39D

ivid

end

s

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itie

s

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

Ru

pee

s in

th

ousa

nd

s -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

- -

-

Eq

uit

yD

ivid

end

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Boa

rd o

f D

irec

tors

hav

e pr

opos

ed a

fina

l di

vide

nd f

or t

he y

ear

ende

d 31

Dec

embe

r 20

17 o

f R

s. 1

25 p

er s

hare

, am

ount

ing

to R

s. 1

,154

,554

tho

usan

ds a

t th

eir

mee

ting

hel

d on

14

Feb

ruar

y 20

18, f

or a

ppro

val o

f m

embe

rs a

t the

Ann

ual G

ener

al M

eeti

ng to

be

held

on

29 M

arch

201

8 (2

016:

Rs.

300

per

sha

re a

mou

ntin

g to

Rs.

2,7

70,9

28th

ousa

nds)

.




40 Operating segments

41 Date of authorization of issue

42 General

42.1 Figures in these financial statements have been rounded off to the nearest thousands of rupees.

42.2

From To 2016

Rupees'000

Reclassification of commission expense Domestic sales - net Distribution

expenses236,755

These financial statements were authorized for issue on February 14, 2018 by the Board of Directors of the

Company.

The financial statements have been prepared on the basis of a single reportable segment. 95.30% (2016:

95.47%) out of total sales of the Company relates to customers in Pakistan. All non current assets of the

Company as at 31 December 2017 are located in Pakistan.

Corresponding figures have been re-arranged or reclassified, wherever necessary, for the purpose of

comparison. However, no significant re-arrangements have been made during the year ended 31

December 2016, except for the following:

Zulfikar Mannoo

Director

Usman Qayyum

Chief Executive and

Managing Director

Muhammad Asdaf

Director


Pattern of ShareholdingAs at 31 December 2017

Number of Shareholders

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

976 9,236,428

Sr. Number of Shares No. Shareholders Category Shareholders Held Percentage

1 Directors, Chief Executive Officer, and their spouse(s) and minor children

2 Associated Companies, Undertakings and Related Parties

3 NIT and ICP

4 Banks, Development Financial Institutions, Non Banking Financial Institutions

5 Insurance Companies

6 Modarabas and Mutual Funds

7 General Public : a. Local b. Foreign

8 Others

Total: 976 9,236,428 100.00

Shareholders holding 10% or more 1 6,494,243 70.31

The above two Statements include 513 shareholders holding 512,995 shares through Central Depository Company of Pakistan Limited.

Shareholding TotalShares Held

1

101

501

1001

5001

10001

15001

30001

40001

50001

55001

60001

65001

90001

100001

110001

140001

150001

165001

200001

235001

300001

6490001

711

153

47

34

6

1

1

2

1

1

2

2

2

1

1

2

2

1

2

1

1

1

1

100

500

1000

5000

10000

15000

20000

35000

45000

55000

60000

65000

70000

95000

105000

115000

145000

155000

170000

205000

240000

305000

6495000

31098

36996

35192

90871

49052

13919

20000

66874

43140

53347

113909

128767

133508

93689

100131

226265

293066

152139

332964

200085

236578

300595

6494243

5

1

-

2

4

5

935

24

582,871

6,494,243

0

58,657

133,397

24,879

1,937,179

5,202

6.31

70.31

0.00

0.64

1.44

0.27

20.97

0.06

Pattern of Shareholding


As at 31 December 2017

Shareholders Shares Held

Number of

Associated Companies, Undertaking and Related Parties (name wise details)

Ingredion Incorporated 1 6,494,243

Total >> 1 6,494,243

Mutual Funds (name wise details)

CDC - Trustee Atlas Stock Market Fund 1 6200

2620

500

13,919

1,640

CDC - Trustee JS Islamic Fund 1

CDC - Trustee APF-Equity Sub Fund 1

MC FSL - Trustee JF Growth Fund 1

CDC - Trustee NAFA Asset Allocation Fund 1

TOTAL >> 5 24,879

Directors and their spouse(s) and minor children (name wise details)

Mr. Zulfikar Mannoo 1 238,263

Mr. Mohammad Adil Mannoo 1 155,994

Mr. Wisal A. Mannoo 1 177,898

Mr. Anis Ahmad Khan 1 1,346

Mrs. Sarwat Zulfikar W/o Mr. Zulfikar Mannoo 1 9,370

TOTAL > 5 582,871

Executives

TOTAL >> 1 164

Public Sector Companies and Corporations

TOTAL > 1 58,252

Banks, Development Finance Institutions, Non-Banking Finance Institutions,

Insurance Companies, Takaful, Modaraba and Pension Funds

TOTAL >> 7 134,022

Shareholder Holding five percent or more voting Rights in the Listed

Company (name wise details)

INGREDION INCORPORATED 1 6,494,243

TOTAL >> 1 6,494,243

Information as required under code of Corporate Governance

Shareholders' Category


Investors' Education


20162015201420132012

2016


2017

4,392,257

(43,543)

12,903,042

17,251,756

2,770,928

923,643

692,732

692,732

5,080,035

12,171,721

475.54


REQUEST FORM FOR DIVIDEND MANDATE (MANDATORY)

I wish the cash dividend declared by the Company, if any, be directly credited in my bank account, instead of issue of dividend warrant(s). My Bank Account details are as under:

Shareholder’s Details Name of Shareholder

Folio/CDC Part. Id. No.

Title of Bank Account (Name)

Bank Account Number (IBAN*)

P

K

Bank’s Name

Branch Name and Address

Cell / Landline number

CNIC/NICOP/NTN/Passport No.

Signature of Shareholder (Please affix company stamp in case of corporate entity) * Please provide complete IBAN (24 digits), after checking with your concerned bank branch. In case of Physical shareholders, the form may be sent to Shares Registrar at the following address:

M/s FAMCO Associates (Pvt.) Ltd, Shares Registrar: Rafhan Maize Products Co. Ltd. 8-F, Next to Hotel Faran, Nursery, Block-6, PECHS, Shahrah-e-Faisal, Karachi. Tel.No.021-34380101-05 Ext.118 Email: [email protected]

The CDC Shareholders will send the above particulars to their respective stock brokers.


Request Form for Hard Copy of Annual Audited Financial Statements

Date:_______________

I/We __________________________________ request that a hard copy of the Annual Financial Statements along with notice of general meetings be sent to me through post. My/our particulars in this respect are as follows:

Folio/CDC A/c No.

Postal Address:

Email Address:

Contact No.:

CNIC No.

Signature

The form may be sent directly to Shares Registrar or Company Secretary at the following addresses:

Company Contact: Mr. M. Yasin Anwar Company Secretary & Compliance Officer, Rafhan Maize Products Co. Ltd., Rakh Canal East Road, Faisalabad.

Email: [email protected]

Shares Registrar: Mr. Fakhar Abbasi M/s FAMCO Associates (Pvt.) Ltd, 8-F, Next to Hotel Faran, Nursery, Block-6, PECHS, Shahrah-e-Faisal, Karachi. Tel.No.021-34380101-05 Ext.118 Email: [email protected]

Tel.No.041-8540121-23 – Ext.206 & 348

Proxy Form127th General Meeting (Annual Ordinary)

The Company Secretary,

Rafhan Maize Products Co. Ltd.,

Rakh Canal East Road,

Faisalabad.

I/We……………………………………........................................................…………………………………………………………

of…………………………………………………………………………......................................................………………………

being shareholder(s) of Rafhan Maize Products Company Limited hereby appoint

…………………………………...................................................................………….......................................…………………

……………………………………………......................................... of …..................................………………………………..

or failing him ………………………......................................…………….......................................................................…………

as my/our proxy to vote for me/us and on my/our behalf at the 127th General Meeting (Annual Ordinary) of the Company

to be held at Faisalabad on Thursday March 29, 2018 at 10:00 a.m. and/or at any adjournment thereof.

Dated this …………………………………………. day of ……………. 2018.

_________________

(Signature of Proxy) Affix Revenue

Stamp of

Rs.5/-

Witness ………………………………. Signature of Shareholder …………………………

Place ……………………………….. Folio No./CDC No. …………………………………

No. of Shares held ………………….

NOTES:

a) This Form of Proxy, duly completed and signed across a revenue stamp, must be deposited at the

Company’s Registered Office not less than 48 hours before the time of holding the meeting.

b) A proxy need not be a member of the Company.


AFFIX CORRECT POSTAGE

The Company Secretary,

Rafhan Maize Products Co. Ltd;Rakh Canal East Road,

Faisalabad.


faisalabad - pakistan

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