MAKE THE GIVEN BALANCE SHEET INTO THE FORMAT GIVEN IN THE NEXT PICTURE ORIGNAL BALANCE SHEET.

notes to financial statement:

ORIGNAL BALANCE SHEET

ORIGNAL INCOME STATEMENT

NEED TO BE CONVERTED IN THIS FORMAT

2020 2019 (Rupees in thousand) 5. PROPERTY, PLANT AND EQUIPMENT Operating fixed assets Capital work-in-progress 5.1 5.4 4,893,322 359,551 5,252,873 4,538,908 498,543 5,037,451 5.1 Operating fixed assets Vehicles Total ments 2020 Leasehold Leasehold Buildings of plant and Office and improve- Furniture leasehold other Land Computers Laboratory machinery and fittings equipments land equipments (Rupees in thousand) 232,549 73,186 2,381,611 2,594,700 395,607 296,613 235,966 40,418 (36,859) (26,041) (338,666) (1,057,873) (181,170) (136,171) (149,356) (17,074 26,371 76.792 24,302 12,209 195,690 73,516 2,042,945 1,536,827 291,229 183,744 98,819 23,344 143,724 6,393,374 (73,007) (2,016,217) 22.077 161.751 92,794 4,538,908 1,001 299,295 503,073 33,876 23,272 108,189 10,162 22,428 1,001,296 (36,118) 36,118 (3,284) 3,284 (19,836) 6.806 (13,030) (1,507) 1,489 (18) (3,492 3.408 (84) (28,010) 11.382 (16,628) (92.247) 62,487 (29,760) At 1 July 2019 Cost Accumulated depreciation Net exchange difference Net book value Additions / transfer - note - 5.4.1 Disposals Cost Accumulated depreciation Reclassification to ROUA Cost Accumulated depreciation Net book value Effect of movement in exchange rate Depreciation charge for the year Closing net book value At 30 June 2020 Cost Accumulated depreciation Net exchange difference Net book value Useful life (years) (8,364) 3,087 (5,277) (50,812) 11,725 (39,087) (59,176) 14,812 (44,364) 376 5,692 (1,937) 1,042 (2,436) 2,737 (4,198) (26,333) (80,327) (289,027) (65,690) (44,200) (42,918) 15,135) (17,667) (575,495) 191,492 48,560 2,261,913 1,750,873 252,077 155,584 165,048 28,371 39,404 4,893,322 232,549 38,069 2,680,906 3,094,489 409,647 309,014 340,663 (41,057) (16,256) (418,993) (1,343,616) (240,054) (175,795) (188,866) 26,747 82,484 22,365 13,251 191,492 48,560 2,261,913 1,750,873 252,077 156,584 166,048 50,580 (22,209) 87,330 7,243,247 (67,567) (2,514,413) 19,641 164,488 39,404 4,893,322 28,371 38 - 99 Lease term 5-60 5 - 10 5 5-10 3 5 - 10 5 Leasehold Land 2019 Leasehold Buildings on Plant and Office and Furniture improve- leasehold other ments land machinery and fittings equipments (Rupees in thousand) Computers Laboratory Vehicles Total equipments At 1 July 2018 Cost Accumulated depreciation Net exchange difference Net book value 232,549 66,564 1,957,832 2,050,344 (32,664) (13,583) (285,244) (884,124) 9,047 199,885 62,028 1,672,588 1,166,220 378,016 303,453 219,026 (137,876) (115,309) (166,253) 24,223 10,419 2,453 264,363 198,563 55,226 40,968 (19,187) 166,219 5,414,971 (78,238) (1,732,478) 8,137 54,279 96,118 3,736,772 21,781 Additions / transfer - note -5.4.1 6,622 432,233 619,090 39,289 18,753 62,901 5,435 31,960 1,216,283 Disposals Cost Accumulated depreciation (8,454) 6,189 (2,265) (74,734) 72,623 (2,111) (21,698) 21,511 (187) (26,593) 23,677 (2,916) (45,961) 45,420 (541) (5,985) 5,682 (303) (54,455) 32,394 (22,061) (237,880) 207,496 (30,384) Effect of movement in exchange rate 17,324 52,569 13,883 9,756 13,940 107,472 Depreciation charge for the year (4,195) (12,458) (59,611) (246,372) (64,805) (44,539) (28,523) (3,569) (27,163) (491,235) Assets written off Closing net book value 195,690 73,516 2,042,945 1,536,827 291,229 183,744 98,819 23,344 92,794 4,538,908 At 30 June 2019 Cost Accumulated depreciation Net exchange difference Net book value 232,549 73,186 2,381,611 2,594,700 395,607 295,613 235,966 (36,859) (26,041) (338,666) (1,057,873) (181,170) (136,171) (149,356) 26,371 76,792 24,302 12,209 195,690 73,516 2,042,945 1,536,827 291,229 183,744 98,819 40,418 (17,074) 143,724 6,393,374 (73,007) (2,016,217) 22,077 161,751 92,794 4,538,908 23,344 Useful life (years) 38 - 99 Lease term 5-60 5 - 10 5 5 - 10 3 5 - 10 5 5.2 The depreciation charge for the year has been allocated as follows: 2020 2019 (Rupees in thousand) Cost of sales Distribution costs Administrative expenses 26 27 28 374,441 109,596 91,457 575,494 305,912 99,511 85,812 491,235 5.3 The details of property, plant and equipment having net book value of Rs. 500,000 and above sold / disposed of during the year by the Parent Company are as follows: Description Cost Gain / (loss) on disposal Mode of disposal Particulars of purchaser and relationship Accumulated depreciation Net book value Sale proceeds (Rupees in thousand) 487 656 603 Vehicles 1,143 (53) Vehicles 1,967 201 1,766 2,184 418 Vehicles 1,215 228 987 1,159 172 Vehicles 1,012 101 911 1,013 102 Vehicles 1,275 133 1,142 1,300 158 Vehicles 1,784 112 1,672 1,684 12 Company Policy Asadullah Khan Company's Executive Company Policy Wajahat Ijaz Company's Executive Company Policy Saeed Ahmed Company's Executive Company Policy Muhammad Fawad Khan Company's Executive Company Policy Sameeullah Company's Executive Company Policy Farhan Parekh Company's Executive Company Policy Nouman Nadeem Company's Executive Company Policy M. Azam Company's Executive Company Policy Syed Zia ul Husain Company's Executive Company Policy Abdul Kaleem Company's Executive Company Policy Aneeque Khan Khakwani Company's Executive Company Policy Syed Anas Ali Tirmizi Company's Executive Vehicles 873 29 844 867 23 Vehicles 1,697 283 1,414 1,608 194 Vehicles 975 75 900 1,150 250 Vehicles 980 57 923 1,242 319 Vehicles 532 30 502 688 186 Vehicles 1,013 92 921 1,053 132 Total 14,466 1,828 12,638 14,551 1,913 2020 2019 (Rupees in thousand) Capital work-in-progress (CWIP) Civil works Plant and machinery Office equipment Advance against acquisition of land Advance against computer 53,395 80,066 152 224,936 1,002 359,551 173,484 107,473 7,092 210,494 498,543 5.4.1 During the year the additions to CWIP and transfer of respective assets amounted to Rs. 428.07 million (2019: Rs. 548.296 million) and Rs. 574.76 million (2019: Rs. 850.59 million) respectively. 5.5 Particulars of immovable property (i.e. land and building) in the name of the Parent Company are as follows: Location Usage of immovable property Total Area (In Sq. Ft.) Covered Area (In Sq. Ft.) Corporate office Office Building 45,099 40,589 S.I.T.E. Manufacturing plant 76,491 62,029 Port Qasim Manufacturing plant 435,600 265,556 Nooriabad Manufacturing plant 602,951 120,112 Gujranwala Manufacturing plant 130,000 36,000 Multan Warehouse 43,560 43,560 6. RIGHT-OF-USE ASSETS The Group has applied IFRS 16 using modified retrospective approach. The impact of the change is disclosed in note 4.1.1. The Group leases many assets including buildings and vehicles with lease terms of four to five years. 2020 Properties Equipment Vehicles Total (Rupees in thousand) 866,054 Balance at 1 July 2019 Cost Accumulated depreciation Net Book Value 8,432 (3,112) 5,320 51,228 (11,821) 39,407 925,714 (14,933) 910,781 866,054 Additions 26,231 26,231 Charge for the year Balance at 30 June 2020 (169,133) 696,921 (1,764) 3,556 (10,531) 55,107 (181,428) 755,584 Effect of movements in exchange rate 3,966 700,887 13 3,569 542 55,649 4,521 760,105 Net book value As at 1 July 2019 As at 30 June 2020 866,054 700,887 5,320 3,569 39,407 55,649 910,781 760,105 6.1 The depreciation of right-of-use assets for the year has been allocated as follows: 2020 2019 (Rupees in thousand) Distribution costs 27 181,428 7. INTANGIBLES AND GOODWILL Goodwill and intangibles System under development 7.1 7.3 759,398 7,861 767,259 806,999 3,135 810,134 7.1 Goodwill and intangibles 2020 Customer relationships Goodwill Computer softwares and ERP System Total Trademark and other (Rupees in thousand) 348,891 132,599 280,471 Cost Balance as at 1 July 2019 Addition Effect of movement in exchange rates Balance as at 30 June 2020 313,807 3,514 1,075,768 3,514 5,793 1,085,075 2,130 317,321 2,649 351,540 1,014 133,613 282,601 Accumulated amortisation Balance as at 1 July 2019 Amortisation for the year Effect of movement in exchange rates Balance as at 30 June 2020 236,724 43,296 32,045 13,157 455 45,657 268,769 56,453 455 325,677 280,020 Carrying amounts As at 30 June 2020 37,301 351,540 87,956 282,601 759,398 Useful life (years) 3 10 Indefinite 7.3 This represent amount given to vendor for the development of software which is expected to be capitalised next year. 7.4 Impairment testing of goodwill, trademark and other indefinite useful life For the purpose of the impairment testing, goodwill acquired through business combination and trademarks with indefinite useful life are allocated to the A-1 Bags and Supplies. The recoverable amount of business operations of Al Bags & Suppliers Inc. (acquired entity) have been determined based on its value in use, determined by discounting the future cash flows to be generated from its continuing use. The cash flow projections are prepared covering period from 2021 to 2024 till terminal period. The calculations used for cash flow projections are based on financial budgets prepared by management. The value in use determined for underlying cash generating unit is higher than its carrying amount. The key assumptions used in the estimation of value in use were as follow: Percentage (%) 7.0 5.5 Sales (% annual growth rate) Budgeted gross margin (%) Other operating cost Long term growth rate Pre-tax discount rate (%) 5.4 5.0 11.9 Note 2020 2019 (Rupees in thousand) COOL 5,252,873 760,105 767,259 30,000 47.650 6,857,887 9 10 11 12 13 139,284 5,142,062 1,383,679 141,861 224,582 35,862 1,250,547 8,317,877 15,175,764 5,037,451 810,134 40,846 5,888,431 86,725 4,934,693 1,091,974 117,463 133,962 20,166 133,789 876.244 7,395,016 13,283,447 14 ASSETS Non - current assets Property, plant and equipment Right-of-use assets Intangibles and goodwill Long-term investment Long-term deposits Current assets Stores, spare parts and loose tools Stock-in-trade Trade debts Advances Trade deposits and prepayments Other receivables Sales tax refundable Cash and bank balances TOTAL ASSETS EQUITY AND LIABILITIES Shareholders' equity Share capital and reserves Authorised share capital 1,000,000,000 (30 June 2019: 1000,000,000) ordinary shares of Rs. 5 each Share Capital Issued subscribed and paid-up capital Revenue Reserves Unappropriated profit Foreign exchange translation reserve Equity attributable to owners of the Company Non-controlling interest Total equity Non - current liabilities Long-term finance Lease liabilities Long-term deposits Deferred taxation - net Deferred liabilities Deferred rent Current liabilities Trade and other payables Contract liabilities Short-term borrowings Current maturity of long term finance Current portion of lease liabilities Mark-up accrued Unclaimed Dividend Sales tax payable Taxation - net 15 5,000,000 745,969 4,843,618 (51,502) 5,538,085 525.431 6,063,516 5,000,000 621,641 3,993,506 143,217 4,758,364 271,598 5,029,962 16 17 18 19 20 1,206,165 628,958 4,221 294,088 86,814 2,220,246 928,142 38,619 4,190 215,508 75,760 35.266 1,297,485 21 22 23 17 18 4,438,574 432,827 554,404 489,085 149,059 15,928 21,791 11,586 778 748 6,892,002 9,112,248 4,092,714 146,650 1,901,632 315,881 9,598 32,832 19,921 436.772 6,9156,000 8,253,485 24 Commitments TOTAL EQUITY AND LIABILITIES 15,175,764 13,283,447 Management has determined the values assigned to each of the above key assumptions as follows: Approached used to determine values Assumptions Sales Growth Sales Price Budgeted gross margin Other operating cost Average annual growth rate over the forecast period based on recent performance and management's expectations of market development. Management does not anticipate material impact owing to change in the assumptions used for growth in sales volume. Average annual growth rate over the forecast period based on current industry trend and including long term inflation forecast. Management does not anticipate material impact owing to change in the assumptions used for growth in sales price. Based on recent performance and management's expectation for the future. Fixed cost of the CGU, which do not vary significantly with sales volume or price. Management forecast these costs based on the current structure of the business, adjusting for inflationary increases but not reflecting any future restructuring or cost saving measures. The amounts disclosed above are the average operating costs for the forecast period. Management does not anticipate material impact owing to change in the assumptions used for growth in other operating cost. This is the weighted average growth rate used to extrapolate cash flows beyond the budget period. Management does not anticipate material impact owing to change in the assumptions used for growth in the long term rate. Reflect specific risks relating to the business segment, and the country in which it operates. Management have considered and assessed reasonably possible changes for other key assumptions and have not identified any instances that could cause the carrying amount to exceed its recoverable amount. Long term growth rate Pre-tax discount rates Sensitivity to changes in other assumptions Balance sheet: Liabilities and Equity Accts payable Notes payable Accruals Total CL Long-term debt Common stock Retained earnings Total Equity Total L &E 20 524 636 489 1,650 723 460 32 492 2,866 (Rupees in thousand) 8. LONG-TERM INVESTMENT Investment at fair value through profit or loss (FVTPL) 30,000 On 25 February 2020, the Parent Company subscribed 2,999,500 ordinary shares of Rs.10 each in Naimat Collateral Management Company Limited (NCMCL) for Rs. 30,000,000. The Parent Company's shareholding gives it ownership interest and voting power of 10% in NCMCL. NCMCL is an unlisted public company that was incorporated under Companies Act, 2017 on 21 January 2020 and has its registered office at C-25/B, Block 4, Clifton, Karachi Saddar Town, Sindh, Pakistan. It is engaged in the business of providing storage and preservation services for a range of agricultural commodities as well as issuing credible warehouse receipts for agricultural commodity financing. The equity investment has been classified at fair value through profit of loss. FOR THE YEAR ENDED JUNE 30, 2020 2020 2019 (Rupees in thousand) 9. STOCK IN TRADE Raw materials Provision for obsolescence 1,236,970 (15,140) 1,221,830 924,038 (19,652) 904,386 Packing materials Provision for obsolescence 499,818 (42,774) 457,044 463,356 (42,867) 420,489 Work in process Provision for obsolescence 1,369,242 (24,829) 1,344,413 1,671,610 (31,133) 1,640,477 9.2 Finished goods Provision for obsolescence 2,139,640 (20,865) 2,118,775 2,038,543 (69,202) 1,969,341 5,142,062 4,934,693 2020 2019 (Rupees in thousand) 14. CASH AND BANK BALANCES Cash in hand 2,024 1,753 Cash at bank - current account - local currency - foreign currency 14.1 UT 246,438 1,002,085 1,248,523 1,250,547 149,872 724,619 874,491 876,244 14.1 The current accounts are placed with banks under conventional banking arrangements. 15. ISSUED, SUBSCRIBED AND PAID-UP CAPITAL 2020 2019 Number of Shares 2020 2019 (Rupees in thousand) 2,511,980 2,511,980 Ordinary shares of Rs. 5 (2019: Rs. 5) each issued for consideration paid in cash 12,560 12,560 146,681,892 121,816,247 Ordinary shares of Rs. 5 (2019: Rs. 5) each as fully paid bonus shares 733,409 609,081 149,193,872 124,328,227 745,969 621,641 15.1 As at 30 June 2020, ATC Holdings (Private) Limited (ultimate parent company) held 49,979,562 (2019: 41,229,268) ordinary shares of National Foods Limited. 16. NON-CONTROLLING INTEREST (NCI) Below is summarised financial information of A-1 Bags & Supplies Inc. that has a non-controlling interest (40% stake) that is material to the Group. The amounts disclosed are before inter-group eliminations. 2020 2019 (Rupees in thousand) Summarised balance sheet Non-current assets Current assets Non-current liabilities Current liabilities 1,186,271 1,803,811 (754,681) (1,216,280) 1,019,121 483,038 1,649,572 (196,999) (1,277,768) 657,843 Accumulated NCI 525,431 271,598 2020 2019 (Rupees in thousand) Summarised statement of profit or loss and other comprehensive income Sales Profit for the period Total comprehensive income 9,213,194 457,932 457,932 7,427,332 199,530 199,530 Profit allocated to NCI Eligible dividend to NCI 177,910 35,410 75,305 15,875 Summarised cash flows Cash flow from operating activities Cash flow from investing activities Cash flow from financing activities Net increase in cash and cash equivalents 517,624 (101,852) (385,378) 30,394 410,724 (54,836) (235,953) 119,935 17. LONG-TERM FINANCE 17.1 487,116 Long term finance - MCB Bank Limited - Pakistan - Habib Bank Limited - Pakistan - MCB Bank Dubai - TD Commercial Bank - Canada Deferred income - government grant 17.2 17.3 17.1 570,658 186,249 718,410 316,075 427,121 198,571 35,073 1,695,250 (466,216) (22,869) 1,206,165 1,244,023 (315,881) Less: Current maturity of long term finance Less: Current portion of deferred income - government grant 928,142 2020 2019 (Rupees in thousand) 10. TRADE DEBTS Considered good - unsecured Others - Local - Foreign Considered doubtful 877,924 505,755 1,383,679 84,463 1,468,142 (84,463) 1,383,679 303,977 787,997 1,091,974 86,191 1,178,165 (86,191) 1,091,974 Allowance for Impairment 10.2 10.1 During the year, the Group has written-off trade debts amounting to Rs. 5.99 million (2019: Nil). 10.2 The movement in the allowance for impairment for trade debts is as follows: Opening provision Charge for the year - net Write-offs Exchange difference Closing provision 86,191 32,478 (37,626) 3,419 84,463 114,282 33,402 (61,493) 86,191 "During the year the Group has recovered Rs. NIL (2019: 7 million) which had been written off in the prior period. AU Note 2020 2019 (Rupees in thousand) LONGO 9 10 11 12 13 5,252,873 760,105 767,259 30,000 47,650 6,857,887 139,284 5,142,062 1,383,679 141,861 224,582 35,862 1,250,547 8,317,877 15,175,764 5,037,451 810,134 40,846 5,888,431 86,725 4,934,693 1,091,974 117,463 133,962 20,166 133,789 876,244 7,395,016 13,283,447 14 ASSETS Non - current assets Property, plant and equipment Right-of-use assets Intangibles and goodwill Long-term investment Long-term deposits Current assets Stores, spare parts and loose tools Stock-in-trade Trade debts Advances Trade deposits and prepayments Other receivables Sales tax refundable Cash and bank balances TOTAL ASSETS EQUITY AND LIABILITIES Shareholders' equity Share capital and reserves Authorised share capital 1,000,000,000 (30 June 2019: 1000,000,000) ordinary shares of Rs. 5 each Share Capital Issued, subscribed and paid-up capital Revenue Reserves Unappropriated profit Foreign exchange translation reserve Equity attributable to owners of the Company Non-controlling interest Total equity Non - current liabilities Long-term finance Lease liabilities Long-term deposits Deferred taxation - net Deferred liabilities Deferred rent Current liabilities Trade and other payables Contract liabilities Short-term borrowings Current maturity of long term finance Current portion of lease liabilities Mark-up accrued Unclaimed Dividend Sales tax payable Taxation - net 15 5,000,000 745,969 4,843,618 (51,502) 5,538,085 525,431 6,063,516 5,000,000 621,641 3,993,506 143,217 4,758,364 271,598 5,029,962 16 17 18 19 20 1,206,165 628,958 4,221 294,088 86,814 2,220,246 928,142 38,619 4,190 215,508 75,760 35,266 1,297,485 ANNN VN 4,438,574 432,827 554,404 489,085 149,059 15,928 21,791 11,586 778,748 6,892.002 9,112,248 4,092,714 146,650 1,901,632 315,881 9,598 32,832 19,921 18 436,772 6,956,000 8,253,485 Commitments 24 Note Sales - Net Cost of sales Gross profit 2020 2019 (Rupees in thousand) 28,713,146 24,253,797 (20,345,845) (17,269,476) 8,367,301 6,984,321 25 26 27 10.2 28 29 30 Distribution costs Impairment loss on trade debts Administrative expenses Other expenses Other income Operating profit Finance costs Profit before taxation Taxation - net Profit after tax (4,554,322) (32,478) (1,241,483) (138,766) 250,585 2,650,837 (342,688) 2,308,149 (657,625) 1,650,524 (3,920,912) (33,402) (1,140,774) (131,112) 248,281 2,006,402 (283,506) 1,722,896 (352,381) 1,370,515 31 32 Other comprehensive income Items that will not be reclassified to profit or loss account: Remeasurements of retirement benefit liability Related deferred tax thereon Items that are or may be reclassified subsequently to profit or loss account: Foreign operations - foreign currency transalation differences (1,212) 351 (861) (60,986) 17,686 (43,300) (83,386) (84,247) 87,041 43,741 1,566,277 1,414,256 Total comprehensive income for the year Profit attributable to: Owners of the Parent Company Non-controlling interest 1,472,614 177,910 1,650,524 1,295,210 75,305 1,370,515 Total comprehensive income attributable to: Owners of the Parent Company Non-controlling interest 1,277,034 1,341,865 289,243 72,391 1,566,277 1,414,256 (Rupees) 9.87 8.68 Earnings per share - basic and diluted 33 Balance Sheet: Cash AIR Inventories Total CA Gross FA Less: Dep. Net FA Total Assets Balance sheet: Liabilities and Equity Accts payable Notes payable Accruals Total CL Long-term debt Common stock Retained earnings Total Equity Total L &E 20 524 636 489 1,650 723 460 32 492 2,866 2020 2019 (Rupees in thousand) 5. PROPERTY, PLANT AND EQUIPMENT Operating fixed assets Capital work-in-progress 5.1 5.4 4,893,322 359,551 5,252,873 4,538,908 498,543 5,037,451 5.1 Operating fixed assets Vehicles Total ments 2020 Leasehold Leasehold Buildings of plant and Office and improve- Furniture leasehold other Land Computers Laboratory machinery and fittings equipments land equipments (Rupees in thousand) 232,549 73,186 2,381,611 2,594,700 395,607 296,613 235,966 40,418 (36,859) (26,041) (338,666) (1,057,873) (181,170) (136,171) (149,356) (17,074 26,371 76.792 24,302 12,209 195,690 73,516 2,042,945 1,536,827 291,229 183,744 98,819 23,344 143,724 6,393,374 (73,007) (2,016,217) 22.077 161.751 92,794 4,538,908 1,001 299,295 503,073 33,876 23,272 108,189 10,162 22,428 1,001,296 (36,118) 36,118 (3,284) 3,284 (19,836) 6.806 (13,030) (1,507) 1,489 (18) (3,492 3.408 (84) (28,010) 11.382 (16,628) (92.247) 62,487 (29,760) At 1 July 2019 Cost Accumulated depreciation Net exchange difference Net book value Additions / transfer - note - 5.4.1 Disposals Cost Accumulated depreciation Reclassification to ROUA Cost Accumulated depreciation Net book value Effect of movement in exchange rate Depreciation charge for the year Closing net book value At 30 June 2020 Cost Accumulated depreciation Net exchange difference Net book value Useful life (years) (8,364) 3,087 (5,277) (50,812) 11,725 (39,087) (59,176) 14,812 (44,364) 376 5,692 (1,937) 1,042 (2,436) 2,737 (4,198) (26,333) (80,327) (289,027) (65,690) (44,200) (42,918) 15,135) (17,667) (575,495) 191,492 48,560 2,261,913 1,750,873 252,077 155,584 165,048 28,371 39,404 4,893,322 232,549 38,069 2,680,906 3,094,489 409,647 309,014 340,663 (41,057) (16,256) (418,993) (1,343,616) (240,054) (175,795) (188,866) 26,747 82,484 22,365 13,251 191,492 48,560 2,261,913 1,750,873 252,077 156,584 166,048 50,580 (22,209) 87,330 7,243,247 (67,567) (2,514,413) 19,641 164,488 39,404 4,893,322 28,371 38 - 99 Lease term 5-60 5 - 10 5 5-10 3 5 - 10 5 Leasehold Land 2019 Leasehold Buildings on Plant and Office and Furniture improve- leasehold other ments land machinery and fittings equipments (Rupees in thousand) Computers Laboratory Vehicles Total equipments At 1 July 2018 Cost Accumulated depreciation Net exchange difference Net book value 232,549 66,564 1,957,832 2,050,344 (32,664) (13,583) (285,244) (884,124) 9,047 199,885 62,028 1,672,588 1,166,220 378,016 303,453 219,026 (137,876) (115,309) (166,253) 24,223 10,419 2,453 264,363 198,563 55,226 40,968 (19,187) 166,219 5,414,971 (78,238) (1,732,478) 8,137 54,279 96,118 3,736,772 21,781 Additions / transfer - note -5.4.1 6,622 432,233 619,090 39,289 18,753 62,901 5,435 31,960 1,216,283 Disposals Cost Accumulated depreciation (8,454) 6,189 (2,265) (74,734) 72,623 (2,111) (21,698) 21,511 (187) (26,593) 23,677 (2,916) (45,961) 45,420 (541) (5,985) 5,682 (303) (54,455) 32,394 (22,061) (237,880) 207,496 (30,384) Effect of movement in exchange rate 17,324 52,569 13,883 9,756 13,940 107,472 Depreciation charge for the year (4,195) (12,458) (59,611) (246,372) (64,805) (44,539) (28,523) (3,569) (27,163) (491,235) Assets written off Closing net book value 195,690 73,516 2,042,945 1,536,827 291,229 183,744 98,819 23,344 92,794 4,538,908 At 30 June 2019 Cost Accumulated depreciation Net exchange difference Net book value 232,549 73,186 2,381,611 2,594,700 395,607 295,613 235,966 (36,859) (26,041) (338,666) (1,057,873) (181,170) (136,171) (149,356) 26,371 76,792 24,302 12,209 195,690 73,516 2,042,945 1,536,827 291,229 183,744 98,819 40,418 (17,074) 143,724 6,393,374 (73,007) (2,016,217) 22,077 161,751 92,794 4,538,908 23,344 Useful life (years) 38 - 99 Lease term 5-60 5 - 10 5 5 - 10 3 5 - 10 5 5.2 The depreciation charge for the year has been allocated as follows: 2020 2019 (Rupees in thousand) Cost of sales Distribution costs Administrative expenses 26 27 28 374,441 109,596 91,457 575,494 305,912 99,511 85,812 491,235 5.3 The details of property, plant and equipment having net book value of Rs. 500,000 and above sold / disposed of during the year by the Parent Company are as follows: Description Cost Gain / (loss) on disposal Mode of disposal Particulars of purchaser and relationship Accumulated depreciation Net book value Sale proceeds (Rupees in thousand) 487 656 603 Vehicles 1,143 (53) Vehicles 1,967 201 1,766 2,184 418 Vehicles 1,215 228 987 1,159 172 Vehicles 1,012 101 911 1,013 102 Vehicles 1,275 133 1,142 1,300 158 Vehicles 1,784 112 1,672 1,684 12 Company Policy Asadullah Khan Company's Executive Company Policy Wajahat Ijaz Company's Executive Company Policy Saeed Ahmed Company's Executive Company Policy Muhammad Fawad Khan Company's Executive Company Policy Sameeullah Company's Executive Company Policy Farhan Parekh Company's Executive Company Policy Nouman Nadeem Company's Executive Company Policy M. Azam Company's Executive Company Policy Syed Zia ul Husain Company's Executive Company Policy Abdul Kaleem Company's Executive Company Policy Aneeque Khan Khakwani Company's Executive Company Policy Syed Anas Ali Tirmizi Company's Executive Vehicles 873 29 844 867 23 Vehicles 1,697 283 1,414 1,608 194 Vehicles 975 75 900 1,150 250 Vehicles 980 57 923 1,242 319 Vehicles 532 30 502 688 186 Vehicles 1,013 92 921 1,053 132 Total 14,466 1,828 12,638 14,551 1,913 2020 2019 (Rupees in thousand) Capital work-in-progress (CWIP) Civil works Plant and machinery Office equipment Advance against acquisition of land Advance against computer 53,395 80,066 152 224,936 1,002 359,551 173,484 107,473 7,092 210,494 498,543 5.4.1 During the year the additions to CWIP and transfer of respective assets amounted to Rs. 428.07 million (2019: Rs. 548.296 million) and Rs. 574.76 million (2019: Rs. 850.59 million) respectively. 5.5 Particulars of immovable property (i.e. land and building) in the name of the Parent Company are as follows: Location Usage of immovable property Total Area (In Sq. Ft.) Covered Area (In Sq. Ft.) Corporate office Office Building 45,099 40,589 S.I.T.E. Manufacturing plant 76,491 62,029 Port Qasim Manufacturing plant 435,600 265,556 Nooriabad Manufacturing plant 602,951 120,112 Gujranwala Manufacturing plant 130,000 36,000 Multan Warehouse 43,560 43,560 6. RIGHT-OF-USE ASSETS The Group has applied IFRS 16 using modified retrospective approach. The impact of the change is disclosed in note 4.1.1. The Group leases many assets including buildings and vehicles with lease terms of four to five years. 2020 Properties Equipment Vehicles Total (Rupees in thousand) 866,054 Balance at 1 July 2019 Cost Accumulated depreciation Net Book Value 8,432 (3,112) 5,320 51,228 (11,821) 39,407 925,714 (14,933) 910,781 866,054 Additions 26,231 26,231 Charge for the year Balance at 30 June 2020 (169,133) 696,921 (1,764) 3,556 (10,531) 55,107 (181,428) 755,584 Effect of movements in exchange rate 3,966 700,887 13 3,569 542 55,649 4,521 760,105 Net book value As at 1 July 2019 As at 30 June 2020 866,054 700,887 5,320 3,569 39,407 55,649 910,781 760,105 6.1 The depreciation of right-of-use assets for the year has been allocated as follows: 2020 2019 (Rupees in thousand) Distribution costs 27 181,428 7. INTANGIBLES AND GOODWILL Goodwill and intangibles System under development 7.1 7.3 759,398 7,861 767,259 806,999 3,135 810,134 7.1 Goodwill and intangibles 2020 Customer relationships Goodwill Computer softwares and ERP System Total Trademark and other (Rupees in thousand) 348,891 132,599 280,471 Cost Balance as at 1 July 2019 Addition Effect of movement in exchange rates Balance as at 30 June 2020 313,807 3,514 1,075,768 3,514 5,793 1,085,075 2,130 317,321 2,649 351,540 1,014 133,613 282,601 Accumulated amortisation Balance as at 1 July 2019 Amortisation for the year Effect of movement in exchange rates Balance as at 30 June 2020 236,724 43,296 32,045 13,157 455 45,657 268,769 56,453 455 325,677 280,020 Carrying amounts As at 30 June 2020 37,301 351,540 87,956 282,601 759,398 Useful life (years) 3 10 Indefinite 7.3 This represent amount given to vendor for the development of software which is expected to be capitalised next year. 7.4 Impairment testing of goodwill, trademark and other indefinite useful life For the purpose of the impairment testing, goodwill acquired through business combination and trademarks with indefinite useful life are allocated to the A-1 Bags and Supplies. The recoverable amount of business operations of Al Bags & Suppliers Inc. (acquired entity) have been determined based on its value in use, determined by discounting the future cash flows to be generated from its continuing use. The cash flow projections are prepared covering period from 2021 to 2024 till terminal period. The calculations used for cash flow projections are based on financial budgets prepared by management. The value in use determined for underlying cash generating unit is higher than its carrying amount. The key assumptions used in the estimation of value in use were as follow: Percentage (%) 7.0 5.5 Sales (% annual growth rate) Budgeted gross margin (%) Other operating cost Long term growth rate Pre-tax discount rate (%) 5.4 5.0 11.9 Note 2020 2019 (Rupees in thousand) COOL 5,252,873 760,105 767,259 30,000 47.650 6,857,887 9 10 11 12 13 139,284 5,142,062 1,383,679 141,861 224,582 35,862 1,250,547 8,317,877 15,175,764 5,037,451 810,134 40,846 5,888,431 86,725 4,934,693 1,091,974 117,463 133,962 20,166 133,789 876.244 7,395,016 13,283,447 14 ASSETS Non - current assets Property, plant and equipment Right-of-use assets Intangibles and goodwill Long-term investment Long-term deposits Current assets Stores, spare parts and loose tools Stock-in-trade Trade debts Advances Trade deposits and prepayments Other receivables Sales tax refundable Cash and bank balances TOTAL ASSETS EQUITY AND LIABILITIES Shareholders' equity Share capital and reserves Authorised share capital 1,000,000,000 (30 June 2019: 1000,000,000) ordinary shares of Rs. 5 each Share Capital Issued subscribed and paid-up capital Revenue Reserves Unappropriated profit Foreign exchange translation reserve Equity attributable to owners of the Company Non-controlling interest Total equity Non - current liabilities Long-term finance Lease liabilities Long-term deposits Deferred taxation - net Deferred liabilities Deferred rent Current liabilities Trade and other payables Contract liabilities Short-term borrowings Current maturity of long term finance Current portion of lease liabilities Mark-up accrued Unclaimed Dividend Sales tax payable Taxation - net 15 5,000,000 745,969 4,843,618 (51,502) 5,538,085 525.431 6,063,516 5,000,000 621,641 3,993,506 143,217 4,758,364 271,598 5,029,962 16 17 18 19 20 1,206,165 628,958 4,221 294,088 86,814 2,220,246 928,142 38,619 4,190 215,508 75,760 35.266 1,297,485 21 22 23 17 18 4,438,574 432,827 554,404 489,085 149,059 15,928 21,791 11,586 778 748 6,892,002 9,112,248 4,092,714 146,650 1,901,632 315,881 9,598 32,832 19,921 436.772 6,9156,000 8,253,485 24 Commitments TOTAL EQUITY AND LIABILITIES 15,175,764 13,283,447 Management has determined the values assigned to each of the above key assumptions as follows: Approached used to determine values Assumptions Sales Growth Sales Price Budgeted gross margin Other operating cost Average annual growth rate over the forecast period based on recent performance and management's expectations of market development. Management does not anticipate material impact owing to change in the assumptions used for growth in sales volume. Average annual growth rate over the forecast period based on current industry trend and including long term inflation forecast. Management does not anticipate material impact owing to change in the assumptions used for growth in sales price. Based on recent performance and management's expectation for the future. Fixed cost of the CGU, which do not vary significantly with sales volume or price. Management forecast these costs based on the current structure of the business, adjusting for inflationary increases but not reflecting any future restructuring or cost saving measures. The amounts disclosed above are the average operating costs for the forecast period. Management does not anticipate material impact owing to change in the assumptions used for growth in other operating cost. This is the weighted average growth rate used to extrapolate cash flows beyond the budget period. Management does not anticipate material impact owing to change in the assumptions used for growth in the long term rate. Reflect specific risks relating to the business segment, and the country in which it operates. Management have considered and assessed reasonably possible changes for other key assumptions and have not identified any instances that could cause the carrying amount to exceed its recoverable amount. Long term growth rate Pre-tax discount rates Sensitivity to changes in other assumptions Balance sheet: Liabilities and Equity Accts payable Notes payable Accruals Total CL Long-term debt Common stock Retained earnings Total Equity Total L &E 20 524 636 489 1,650 723 460 32 492 2,866 (Rupees in thousand) 8. LONG-TERM INVESTMENT Investment at fair value through profit or loss (FVTPL) 30,000 On 25 February 2020, the Parent Company subscribed 2,999,500 ordinary shares of Rs.10 each in Naimat Collateral Management Company Limited (NCMCL) for Rs. 30,000,000. The Parent Company's shareholding gives it ownership interest and voting power of 10% in NCMCL. NCMCL is an unlisted public company that was incorporated under Companies Act, 2017 on 21 January 2020 and has its registered office at C-25/B, Block 4, Clifton, Karachi Saddar Town, Sindh, Pakistan. It is engaged in the business of providing storage and preservation services for a range of agricultural commodities as well as issuing credible warehouse receipts for agricultural commodity financing. The equity investment has been classified at fair value through profit of loss. FOR THE YEAR ENDED JUNE 30, 2020 2020 2019 (Rupees in thousand) 9. STOCK IN TRADE Raw materials Provision for obsolescence 1,236,970 (15,140) 1,221,830 924,038 (19,652) 904,386 Packing materials Provision for obsolescence 499,818 (42,774) 457,044 463,356 (42,867) 420,489 Work in process Provision for obsolescence 1,369,242 (24,829) 1,344,413 1,671,610 (31,133) 1,640,477 9.2 Finished goods Provision for obsolescence 2,139,640 (20,865) 2,118,775 2,038,543 (69,202) 1,969,341 5,142,062 4,934,693 2020 2019 (Rupees in thousand) 14. CASH AND BANK BALANCES Cash in hand 2,024 1,753 Cash at bank - current account - local currency - foreign currency 14.1 UT 246,438 1,002,085 1,248,523 1,250,547 149,872 724,619 874,491 876,244 14.1 The current accounts are placed with banks under conventional banking arrangements. 15. ISSUED, SUBSCRIBED AND PAID-UP CAPITAL 2020 2019 Number of Shares 2020 2019 (Rupees in thousand) 2,511,980 2,511,980 Ordinary shares of Rs. 5 (2019: Rs. 5) each issued for consideration paid in cash 12,560 12,560 146,681,892 121,816,247 Ordinary shares of Rs. 5 (2019: Rs. 5) each as fully paid bonus shares 733,409 609,081 149,193,872 124,328,227 745,969 621,641 15.1 As at 30 June 2020, ATC Holdings (Private) Limited (ultimate parent company) held 49,979,562 (2019: 41,229,268) ordinary shares of National Foods Limited. 16. NON-CONTROLLING INTEREST (NCI) Below is summarised financial information of A-1 Bags & Supplies Inc. that has a non-controlling interest (40% stake) that is material to the Group. The amounts disclosed are before inter-group eliminations. 2020 2019 (Rupees in thousand) Summarised balance sheet Non-current assets Current assets Non-current liabilities Current liabilities 1,186,271 1,803,811 (754,681) (1,216,280) 1,019,121 483,038 1,649,572 (196,999) (1,277,768) 657,843 Accumulated NCI 525,431 271,598 2020 2019 (Rupees in thousand) Summarised statement of profit or loss and other comprehensive income Sales Profit for the period Total comprehensive income 9,213,194 457,932 457,932 7,427,332 199,530 199,530 Profit allocated to NCI Eligible dividend to NCI 177,910 35,410 75,305 15,875 Summarised cash flows Cash flow from operating activities Cash flow from investing activities Cash flow from financing activities Net increase in cash and cash equivalents 517,624 (101,852) (385,378) 30,394 410,724 (54,836) (235,953) 119,935 17. LONG-TERM FINANCE 17.1 487,116 Long term finance - MCB Bank Limited - Pakistan - Habib Bank Limited - Pakistan - MCB Bank Dubai - TD Commercial Bank - Canada Deferred income - government grant 17.2 17.3 17.1 570,658 186,249 718,410 316,075 427,121 198,571 35,073 1,695,250 (466,216) (22,869) 1,206,165 1,244,023 (315,881) Less: Current maturity of long term finance Less: Current portion of deferred income - government grant 928,142 2020 2019 (Rupees in thousand) 10. TRADE DEBTS Considered good - unsecured Others - Local - Foreign Considered doubtful 877,924 505,755 1,383,679 84,463 1,468,142 (84,463) 1,383,679 303,977 787,997 1,091,974 86,191 1,178,165 (86,191) 1,091,974 Allowance for Impairment 10.2 10.1 During the year, the Group has written-off trade debts amounting to Rs. 5.99 million (2019: Nil). 10.2 The movement in the allowance for impairment for trade debts is as follows: Opening provision Charge for the year - net Write-offs Exchange difference Closing provision 86,191 32,478 (37,626) 3,419 84,463 114,282 33,402 (61,493) 86,191 "During the year the Group has recovered Rs. NIL (2019: 7 million) which had been written off in the prior period. AU Note 2020 2019 (Rupees in thousand) LONGO 9 10 11 12 13 5,252,873 760,105 767,259 30,000 47,650 6,857,887 139,284 5,142,062 1,383,679 141,861 224,582 35,862 1,250,547 8,317,877 15,175,764 5,037,451 810,134 40,846 5,888,431 86,725 4,934,693 1,091,974 117,463 133,962 20,166 133,789 876,244 7,395,016 13,283,447 14 ASSETS Non - current assets Property, plant and equipment Right-of-use assets Intangibles and goodwill Long-term investment Long-term deposits Current assets Stores, spare parts and loose tools Stock-in-trade Trade debts Advances Trade deposits and prepayments Other receivables Sales tax refundable Cash and bank balances TOTAL ASSETS EQUITY AND LIABILITIES Shareholders' equity Share capital and reserves Authorised share capital 1,000,000,000 (30 June 2019: 1000,000,000) ordinary shares of Rs. 5 each Share Capital Issued, subscribed and paid-up capital Revenue Reserves Unappropriated profit Foreign exchange translation reserve Equity attributable to owners of the Company Non-controlling interest Total equity Non - current liabilities Long-term finance Lease liabilities Long-term deposits Deferred taxation - net Deferred liabilities Deferred rent Current liabilities Trade and other payables Contract liabilities Short-term borrowings Current maturity of long term finance Current portion of lease liabilities Mark-up accrued Unclaimed Dividend Sales tax payable Taxation - net 15 5,000,000 745,969 4,843,618 (51,502) 5,538,085 525,431 6,063,516 5,000,000 621,641 3,993,506 143,217 4,758,364 271,598 5,029,962 16 17 18 19 20 1,206,165 628,958 4,221 294,088 86,814 2,220,246 928,142 38,619 4,190 215,508 75,760 35,266 1,297,485 ANNN VN 4,438,574 432,827 554,404 489,085 149,059 15,928 21,791 11,586 778,748 6,892.002 9,112,248 4,092,714 146,650 1,901,632 315,881 9,598 32,832 19,921 18 436,772 6,956,000 8,253,485 Commitments 24 Note Sales - Net Cost of sales Gross profit 2020 2019 (Rupees in thousand) 28,713,146 24,253,797 (20,345,845) (17,269,476) 8,367,301 6,984,321 25 26 27 10.2 28 29 30 Distribution costs Impairment loss on trade debts Administrative expenses Other expenses Other income Operating profit Finance costs Profit before taxation Taxation - net Profit after tax (4,554,322) (32,478) (1,241,483) (138,766) 250,585 2,650,837 (342,688) 2,308,149 (657,625) 1,650,524 (3,920,912) (33,402) (1,140,774) (131,112) 248,281 2,006,402 (283,506) 1,722,896 (352,381) 1,370,515 31 32 Other comprehensive income Items that will not be reclassified to profit or loss account: Remeasurements of retirement benefit liability Related deferred tax thereon Items that are or may be reclassified subsequently to profit or loss account: Foreign operations - foreign currency transalation differences (1,212) 351 (861) (60,986) 17,686 (43,300) (83,386) (84,247) 87,041 43,741 1,566,277 1,414,256 Total comprehensive income for the year Profit attributable to: Owners of the Parent Company Non-controlling interest 1,472,614 177,910 1,650,524 1,295,210 75,305 1,370,515 Total comprehensive income attributable to: Owners of the Parent Company Non-controlling interest 1,277,034 1,341,865 289,243 72,391 1,566,277 1,414,256 (Rupees) 9.87 8.68 Earnings per share - basic and diluted 33 Balance Sheet: Cash AIR Inventories Total CA Gross FA Less: Dep. Net FA Total Assets Balance sheet: Liabilities and Equity Accts payable Notes payable Accruals Total CL Long-term debt Common stock Retained earnings Total Equity Total L &E 20 524 636 489 1,650 723 460 32 492 2,866