Transmission of Annual Audited Accounts for The Year Ended June 30, 2025

38th Annual Report

Textile Mills Limited

Company Information 1

Vision & Mission Statement 2

Chairman's Review Report 3

Directors' Report 4

Notice of Annual General Meeting 7

Pattern of Shareholding 9

Statement of Compliance 12

Independent Auditor's Report 15

Independent Auditor's Review Report 18

Statement of Financial Position 19

Statement of Profit or Loss and Other Comprehensive Income 20

Statement of Changes in Equity 21

Statement of Cash Flows 22

Notes to and Forming Part of the Financial Statements 23

Form of Proxy 48

COMPANY INFORMATION

Chairman - Mian Iqbal Barkat Chief Executive Officer

Directors - Mian Hassan Barkat

• Abida Iqbal

• Rafia Hassan

• Muhammad Musaddaq

• Abdul Razzaq Khan

• Muhammad Umair Younas Lone

Audit Committee

• Chairman - Mian Hassan Barkat

• Member - Mian Iqbal Barkat

• Member - Abida Iqbal

  HR Committee

• Chairman - Muhammad Musaddaq

• Member - Muhammad Umair Younas Lone

• Member - Rafia Hassan

  Risk Management Committee

  • Chairman - Mian Iqbal Barkat

  • Member - Muhammad Musaddaq

  • Member - Abdul Razzaq Khan Company Secretary - Haji Tariq Samad

Auditors - M/s. Sheikh & Chaudhri

Corporate Avenue, 32-A, Jail Road, Lahore. Ph: 042-35463623-5

Bankers - National Bank of Pakistan Habib Bank Limited

Al Baraka Bank Pakistan

Habib Metropolitan Bank Limited Meezan Bank Limited

Chief Financial Officer - Mr. Nabeel Ahmed

Legal Advisor - Mr. Majid Ali Rana (Advocate)

Share Registrar - M/s. Corplink (Pvt) Limited

Wings Arcade, 1-K, Commercial, Model Town, Lahore.

Ph: 042-35916714, Fax: 042-35869037

Registered Office - 135-Upper Mall, Lahore.

Website Address - https://www.kstml.com.pk

Mills - 48-K.M, Lahore-Multan Road, Phool Nagar (Bhai Pheru), Tehsil Pattoki, Distt. Kasur.

Vision Statement

To accomplish, build up and sustain a good reputation of the project in textile sector locally and globally by manufacturing and marketing high quality of yarn through team work by means of honesty, integrity and commitment.

Mission Statement

To provide maximum satisfaction to customers by Supplying fine quality yarn for knitting and Weaving for well Known textile Brands through effective utilization of men,

Material and machines by encouraging, supporting and rewarding the employees and sharing profits with our shareholders.

We do have social responsibility towards our community in which we operate and we are committed to safety,

health and environment in all our operations.

Chairman's Review Report

Dear Members

The Board of Directors is performing its duties in accordance with law and in the best interest of company and its shareholders. As required under the Code of Corporate Governance, an annual evaluation of the Board of Directors of Khalid Siraj Textile Mills Limited is carried out. The purpose of this evaluation is to ensure that the Board's overall performance and effectiveness is measured and benchmarked against expectations in the context of objectives set for the Company.

Despite unprecedented challenges faced by the economy, the Board overall performance and effectiveness has been assessed satisfactory for the financial year ended June 30, 2025 as the Company is able to generate some revenue. The performance is based on evaluation of integral components including vision, mission and values; engagement in strategic planning; formulation of policies; monitoring the organization's business activities; monitor financial resource management and efficiency in carrying out the Board business. I would like to extend my acknowledgement and gratefulness towards the Board for its positive contribution and continuous commitments.

The Board has exercised all its power in accordance with relevant laws and regulations and all Board members are equally involved in important decision of the Company. Hope that their performance during coming years will improve further.

For and on behalf of the Board

Mian Iqbal Barkat Mian Hassan Barkat

Chief Executive Officer Director

Lahore: October 03, 2025

Directors' Report

On behalf of the Board of Directors the undersigned takes pleasure to present before you the 38th (thirty eighth) Annual Report for the financial year ended June 30, 2025 along with Auditors' Report thereon.

Operating Financial Results

During the financial year under review, the company has posted net loss after taxation of Rs. (19.323) million and net losst Rs.13.725 million of the corresponding last year.

The composition of net profit is as under:-

APPROPRIATIONS: 2025 2024

-------- Rupees --------

Charts of Significant Ratios and comparison with previous years

(All amounts in thousand)

Future Outlook:

There have been uncertainties during the financial year, mainly due to abrupt devaluation which resulted in an increase in inflation. Electricity rates have been inflated to levels that the market is not absorbing. Regionally competitive rates are to re-instated for spinning sector to work efficiently. After the receipt of financial assistance from friendly countries, foreign direct investment and the approval of bailout package by the IMF, it is expected that the economy now finds its way to towards gaining momentum. To counter this challenging economic situation; the Pakistani textile sector shall have to be a cost effective niche marketing, product and customer development are the essential tools to remain competitive domestically and internationally. The management is confident that the company shall be able to improve its operational performance and going forward.

The management of the company is determined and optimist to turn the unit as viable, operational and profitable in future. We hope that the Change in Government Policies and facilitation to textile sector will bring fruitful results for the Company.

CORPORATE GOVERNANCE

The Board of Directors of Khalid Siraj Textile Mills Limited and its management are fully conversant with its responsibilities as formulated in Code of Corporate Governance as incorporated in the listing regulations of stock exchanges issued by the SECP.

In compliance with the Code of Corporate Governance, the Directors are pleased to state that:

1. The financial statements, prepared by the management of the company, fairly present its state of affairs, the results of its operations, cash flows and changes in equity;

2. The company has maintained proper books of Account;

3. Appropriate accounting policies have been consistently applied in preparation of financial statements and accounting estimates are based on reasonable and prudent judgment;

4. International Financial Reporting Standards, as applicable in Pakistan, have been followed in preparation of financial statements;

5. The system of internal control is sound in design and has been effectively implemented and monitored;

6. There are no significant doubts upon the company's ability to continue as a going concern, however, uncertain circumstances are discussed in note 3 of notes to the accounts. The company has sound potentials to continue as going concern;

7. There are no statutory payments due on account of taxes, duties, levies and charges which are outstanding except for those disclosed in attached financial statements;

8. Board of Directors, CEO, CFO, Company Secretary, Executives and their spouse and minor children have made no transaction of company's shares during the year except that mentioned in "Pattern of shareholding".

9. Key operating ratios and financial results of the company for the last five years are annexed.

10. During the year under review, six (6) meeting of Board of Directors were held and the attendance of Directors were as under:-

    1. Mr. Mian Iqbal Barkat 06 Nos.

    2. Mr. Mian Hassan Barkat 06 Nos.

    3. Mrs. Abida Iqbal 05 Nos.

    4. Mrs. Rafia Hassan 05 Nos.

    5. Mr. Muhammad Musaddaq 05 Nos.

    6. Mr. Abdul Razzaq Khan 01 Nos.

    7. Mr. Muhammad Umair Younas Lone 01 Nos.

Leave of absence was granted by the board to the non-attending directors.

Audit Committee

Board of Directors of your Company has established Audit Committee of the Board in compliance with the requirements the Listed Companies (Code of Corporate Governance), Regulations, 2019. Term of reference of the Committee was duly communicated to the members by the Board.

Six (6) meeting of audit committee were held during the year. Attendance by each member was as follows:-

HR Committee Meetings

Six (6) meetings of HR & Remuneration Committee were held during the year. Attendance by each member was as follows:-

Quality Control

To ensure implementation of the Management System, Internal Quality Audits, Surveillance Audits and Management Review Meetings are conducted regularly.

Communication

Communication with the shareholders is given high priority. Annual, Half Yearly and Quarterly Accounts are distributed to them within the time specified in the Companies Act 2017. Every opportunity is given to the individual shareholders to attend and freely ask questions about the company operations at the Annual General Meeting.

Contingencies and Commitments

No material changes and commitments affecting the financial position of the Company have occurred between the end of the financial year to which this balance sheet relates and the date of the Directors' Report.

Dividend

Due to the circumstances already discussed the Board of Directors does not recommend any dividend for the year ended 30 June 2025.

Auditors

On the suggestion of Audit Committee, the Board of Directors of the Company has recommended the re-appointment of M/s Sheikh & Chaudhri, Chartered Accountants, as the auditors of the Company for the year ending June 30, 2025.

Pattern of Shareholding and Information Under Clause XVI (J) Of The Code Of Corporate Governance

The information under this head as on June 30, 2025 is annexed.

Corporate Social Responsibility

The company is fully aware of corporate social responsibilities and is supporting social sector organizations in the fields of educations, health and environment. The company gives donations as a financial assistance to charitable organizations as well as also offers internships all around the year to student form colleges and universities.

Acknowledgement

The Board is pleased and appreciates continued support of its bankers, dedication and hard work of all the employees of the company.

For and on behalf of the Board

Mian Iqbal Barkat Mian Hassan Barkat

Chief Executive Officer Director

Lahore: October 03, 2025

Notice of Annual General Meeting

Notice is hereby given that the 38th Annual General Meeting of the shareholders of Khalid Siraj Textile Mills Limited (the "Company") will be held on Tuesday, October 28, 2025 at 10:00 a.m. at the registered office of the Company, 135-Upper Mall, Lahore, to transact the following business:

Ordinary Business:

1. To confirm the minutes of Extraordinary General Meeting held on April 14, 2025.

   To receive, consider and adopt the audited financial statements of the Company together with the Chairman's Report, Directors' and Auditors' Reports thereon for the year ended June 30, 2025.

   In accordance with the Section 223 of the Companies Act 2017 and in terms of S.R.O No. 389(I)/2023 dated March 21, 2023 issued by (The SECP), Financial Statements of the Company can be accessed through the following web link: https://kstml.com.pk/annual-reports.

2. Auditors:

   To appoint statutory auditors of the Company and fix their remuneration for the year ending June 30, 2026. The retiring Auditors, M/S. Sheikh & Chaudhri, Chartered Accountants, are being eligible, have offered themselves for re-appointment and the Board of Directors recommended their appointment.

3. Any Other Business:

To consider any other business of the Company with the permission of the Chair.

By order of the Board Haji Tariq Samad Company Secretary

Lahore: 07-10-2025

Notes:

1. Closure of The Transfer Books: The share transfer books of the Company will remain closed from October 21, 2025 to October 28, 2025 (both days inclusive). Transfers received at the Company's Share Registrar, M/s. Corplink (Pvt.) Limited, Wing Arcade 1-K Commercial Model Town, Lahore, at the close of business on October 20, 2025 will be treated in time for the purpose to attend and vote at the AGM.

2. Participation in AGM: An Individual beneficial owner of share must bring his/her original CNIC or Passport, Account and Participant's I.D numbers to prove his/her identity. A representative of corporate members must bring the Board of Director's Resolution and/or Attorney and the specimen signature of the nominee. CDC account holders will further have to follow the guidelines as laid down in Circular No. 1 dated January 26, 2000 issued by the Securities and Exchange Commission of Pakistan.

   
   
   

   A member eligible to attend and vote at this meeting may appoint another member as his/her proxy to attend and vote instead of him/her. Proxies in order to be effective must be received by the Company at the registered office not less than 48 hours before the time of holding the meeting. A proxy must be a member.

3. Participation in AGM Through Video Link: Members who wish to participate in the AGM through veideo link facility are requested to share below in formation at kstmlspinning@outlook.com at least 07 workinng days prior to date the meeting.

   Name of Shareholder	CNIC number	Folio/CDC/Account No.	Registered email	Cell Number

   Shareholders, who will be registered, after necessary verification as per the above requirement, will be provided a password protected video link by the Company via email. The said link will be open from 10:00 am at the date of AGM till the end of the meeting.

4. Electronic Voting:

   1. In accordance with Companies Regulation, 2018, (the "Regulations") the right to vote through electronic voting facility and voting by post shall be provided to members of every listed company for, inter alia, all businesses classified as special business under the Companies Act, 2017 in the manner and subject to conditions contained in the Regulations;

   2. Detail of E-Voting facility will be shared through e-mail with those members of the company who have valid cell numbers/e-mail address available in the register of members of the company by the end of business on October 24, 2025 by M/s Corplink (Pvt) Ltd being the E-voting service provider. E-voting shall be authenticated through electronic signature or authentication for login.

   3. Members shall cast vote online form October 24, 2025 to October 28, 2025 at 05:00 p.m. and voting shall close on October 27, 2025 at 05:00 p.m. Once the vote on the resolution has been casted by a Member, he/she shall not be allowed to change it subsequently.

5. Procedure for Voting Through Postal Ballot: Members may alternatively opt for voting post ballot. For convenience of the members, Ballot Paper is available on the Company's website https://www.kstml.com.pk to download. The members must ensure that duly filled and signed ballot paper along with a copy of CNIC should reach the company secretary through post at 135-Upper Mall, Lahore or email at kstmlspinning@outlook.com one day before the AGM, i.e. October 27, 2025 before 5:00p.m.

6. Transmission of Annual Financial Statements through Email: The Audited Financial Statements of the Company for the year ended June 30, 2024 have been made available on the Company's website (https://www.kstml.com.pk). Further, those members who require a hard copy of the Company's Annual Report are requested to provide us their latest address to enable us send these by courier / post.

Pattern of Shareholding

undertakings and related parties (Parent Company)

Categories of Shareholding

Required under Code of Corporate Governance (CCG) as on June 30, 2025

Associated Companies, Undertakings and Related Parties

(Name Wise Detail): - -

Mutual Funds (Name Wise Detail) - -

Directors and their Spouse and Minor Children (Name Wise Detail):

Public Sector Companies & Corporations:

Banks, Development Finance Institutions, Non-Banking Finance

- 0.00%

500,480 4.68%

Companies, Insurance Companies, Takaful, Modarabas and Pension Funds:

Shareholders holding five percent or more voting interest in the listed company (Name Wise Detail)

All trades in the shares of the listed company, carried out by its Directors, Executives and their

spouses and minor children shall also be disclosed:

Statement of Compliance

WITH THE LISTED COMPANIES (CODE OF CORPORATE GOVERNANCE) REGULATION, 2019

Name of the Company : Khalid Siraj Textile Mills Limited (the "Company")

For the Year ended : 30-Jun-25

The company has complied with the requirement of the Regulations in the following manner:

1. The total number of directors are seven (7) as per the following:

   1. Male: Five (5) b) Female: Two (2)

2. The composition of board is as follows:

   Category	Name
   Independent Directors	· None
   Executive Directors	· Mian Iqbal Barkat
   Non-Executive Directors

   • Mian Hassan Barkat

   • Mrs. Abida Iqbal

   • Mrs. Rafia Hassan

   • Mr. Muhammad Musaddaq

   • Mr. Abdul Razzaq Khan

   • Mr. Muhammad Umair Younas Lone

3. The Directors have confirmed that none of them is serving as a director on more than seven listed companies, including this Company;

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

5. The Board has developed a vision/mission statement, overall corporate strategy and significant policies of the company. The Board has ensured that complete record of particulars of the significant policies along with their date of approval or updating is maintained by the company;

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

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

   
   
   

8. The board of directors has a formal policy and transparent procedures for remuneration of directors in accordance with the Act and these Regulations;

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

10. The financial statements of the company were duly endorsed by the CEO and CFO before approval of the Board;

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

    1. Audit Committee

       Mian Hassan Barkat - Chairman

       Mian Iqbal Barkat - Member

       Abida Iqbal - Member

    2. HR and Remuneration Committee

       Muhammad Musaddaq - Chairman Muhammad Umair Younas Lone - Member Rafia Hassan - Member

    3. Nomination Committee

       Mian Hassan Barkat Chairman

       Mian Hassan Barkat Member

       Muhammad Umair Younas Lone Member

    4. Risk Management Committee

    Mian Iqbal Barkat - Chairman

    Muhammad Musaddaq - Member

    Abdul Razzaq Khan - Member

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

13. The frequency of meetings(quarterly/half yearly/ yearly) of the aforesaid committee were as per following:

    1. Audit Committee: Four quarterly meetings during the financial year ended June 30, 2025

    2. HR and Remuneration Committee: four quarterly meetings during the financial year ended June 30, 2025

    3. Nomination Committee: Two Half yearly meetings during the financial year ended June 30, 2025

    4. Risk Management Committee: Two Half yearly meetings during the financial year ended June 30, 2025

14. The statutory auditors of the company have confirmed that they have been given a satisfactory rating under the Quality Control Review program of the Institute of Chartered Accountants of Pakistan and registered with Audit Oversight Board of Pakistan, that they and all their partners are in compliance with International Federation of Accountants (IFAC) guidelines on code of ethics as adopted by the Institute of Chartered Accountants of Pakistan and that they and the partners of the firm involved in the audit are not a close relative (spouse, parent, dependent and non-dependent children) of the chief executive officer, chief financial officer, head of internal audit, company secretary or director of the company;

15. 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;

16. We confirm that all requirements of regulations 3, 7, 8, 32, 33 and 36 of the Regulations have been complied with;

On behalf of the Board of Directors

Mian Iqbal Barkat Mian Hassan Barkat

Chief Executive Officer Director

Lahore: October 03, 2025

Page 17

Statementof of Financial Position As at 30 June 2025

EQUITY AND LIABILITIES

Share capital and reserves Authorized share capital

Audited

Notes 30-Jun-25 30-Jun-24

Rupees Rupees

12,000,000 (30 June 2024: 12,000,000) ordinary shares of

Rs. 10 each

120,000,000 120,000,000

equipment

214,950,749

227,840,413

The annexed notes 1 to 35 form an integral part of these financial statements.

CHIEF EXECUTIVE OFFICER DIRECTOR CHIEF FINANCIAL OFFICER

Page 19

The annexed notes 1 to 35 form an integral part of these financial statements.

CHIEF EXECUTIVE OFFICER DIRECTOR CHIEF FINANCIAL OFFICER

Statement of Changes in Equity For The Year Ended 30 June 2025

------------------------------ Rupees ------------------------------

Balance as at June 30, 2023 107,000,000 242,141,894 (393,338,815) (44,196,921)

The annexed notes 1 to 35 form an integral part of these financial statements.

CHIEF EXECUTIVE OFFICER DIRECTOR CHIEF FINANCIAL OFFICER

Page 21

The annexed notes 1 to 35 form an integral part of these financial statements.

CHIEF EXECUTIVE OFFICER DIRECTOR CHIEF FINANCIAL OFFICER

Khalid Siraj Textile Mills Limited

KHALID SIRAJ TEXTILE MILLS LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2025

1. CORPORATE AND GENERAL INFORMATION

   Legal status and operations

   KHALID SIRAJ TEXTILE MILLS LIMITED ('the Company') was incorporated in Pakistan as a public limited company on 17 January 1988 under the repealed Companies Ordinance, 1984 (now the Companies Act, 2017) and is quoted on pakistan stock exchange.The principle business of the Company is manufacturing and sale of yarn and the other related / allied operations. Our manufacturing facility is situated 48 kilometers along Multan Road, Phool Nagar, Bhai Pheru, Tehsil Pattoki, District Kasur.

   The company is incorporated as a private company and domiciled in Pakistan. The registered office of the Company is situated 135, Upper Mall, Lahore.

2. BASIS OF PREPARATION

   Statement of compliance

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

   • International Financial Reporting Standards (IFRS Standards) issued by the International Accounting Standards Board (IASB) as notified under the Companies Act, 2017; and

   • Provisions of and directives issued under the Companies Act, 2017.

   • Where provisions of and directives issued under the Companies Act, 2017 differ from the IFRS Standards, the provisions of and directives issued under the Companies Act, 2017 have been followed.

3. Going concern assumption

   The financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates realization of assets and liquidation of liabilities in normal course of business. The Company has incurred recurring losses resulting in accumulated losses of Rs. 399.195 million (2024: Rs. 392.762) million at close of the year ended 30 June 2025. The Company's current liabilities exceed its current assets by Rs. 183.024 (2024: Rs. 183.606) million.

   The Company had ceased its operations since November 2013 due to working capital. However, subsequent to the reporting date, the management is taking steps to recommence operations and are in negotiations with financial institutions to obtain funds to manage working capital requirements. The Company managed its liquidity constraints through financing from its sponsors and its ability to continue as a going concern is dependent on continued financing from sponsors. Management's efforts for obtaining finances from financial institutions are not so far materialized, however, management is confident that efforts will be realized and that the Company will be able to continue as a going concern.

   
   
   

   The Company has taken steps to recommence its operations.

4. Basis of prepration and material accounting policies information

   The financial statements of KHALID SIRAJ TEXTILE MILLS LIMITED have been prepared in accordance with IFRS Accounting Standards as issued by the international Accounting Standards Board. The financial statements have been prepared under the historical cost convention, as modified by the revaluation of land and buildings, availabie-for-sale financial assets, and financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.

   The principal accounting policies applied in the preparation of these annual financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

   1. Property, plant and equipment

      Recognition

      Property, plant& Equipment is recognised as an assets when:

      • It is probable that future economics benefits associated with the assets will flow to the entity

      • The cost of the assets can be measured relaibily

        Initial measurement

        An item of property, plant and equipment that qualifies for recognition as an asset is initially measured The cost of an item of property, plant and equipment includes:

      • its purchase price, including import duties and non-refundable purchase taxes, after deducting trade

      • discounts and rebates.

        -​

        any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

        Depreciation

        Depreciation of an asset commences when it is available for use, and ceases at the earlier of the date that the asset is classitled as held for sale, or the date that the asset is derecognised.

        Each part of an item af property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately.

        The depreciation charge for each period is recognised in profit or loss unless it is included in the carrying amount of another asset. The depreciation is charged by applying reducing balance method over the useful life of an asset. The depreciable amount of an asset is determined after deducting its residual value.Residual values, useful lives and depreciation methods are reviewed at each financial year end. Where there are significant changes in the expected pattern of econamic consumption of the benefits embodied in the asset, the relevant changes will be made to the residual values and depreciation rates, and the change will be accounted for as a change in accounting estimate.

        The measurement base, useful life or depreciation rate as well as the depreciation method for all major classes of assets are as follows:

        Page 24

        Khalid Siraj Textile Mills Limited

        
        
        
        
        
        

        Assets Class

        Measurement Base Useful Life/

        Depreciation Rate

        Depreciation Method

        Freehold Land	Revalution Model	N/A	N/A
        Factory Building on freehold Land	Revalution Model	10%	Reducing Balance
        Non-Factory Building freehold land	Revalution Model	5%	Method Reducing Balance
        Plant & Machinery	Revalution Model	10%	Method Reducing Balance
        Electric Installation	Revalution Model	10%	Method Reducing Balance
        Laboratory Equipment	Revalution Model	10%	Method Reducing Balance
        Motor Vehicles	Cost Model	15%	Method Reducing Balance
        Furniture & Fixture	Cost Model	10%	Method Reducing Balance
        Concrete Mixer & Weighing scales	Cost Model	10%	Method Reducing Balance
        Tube Well	Cost Model	10%	Method Reducing Balance
        Office Equipment	Cost Model	10%	Method Reducing Balance
        Bicyles	Cost Model	20%	Method Reducing Balance
        Fans	Cost Model	10%	Method Reducing Balance
        Air Conditioner	Cost Model	10%	Method Reducing Balance
        Refrid Generator	Cost Model	10%	Method Reducing Balance
        Telephone	Cost Model	10%	Method Reducing Balance
        Heaters	Cost Model	10%	Method Reducing Balance
        Tools & Equipment	Cost Model	10%	Method Reducing Balance
        Arms & Ammunition	Cost Model	10%	Method Reducing Balance
        			Method

   2. Surplus on revaluation of fixed assets

      
      
      

      Surplus arising on acquisition being the difference between fair value of the assets acquired and the consideration paid is recognized as income over the remaining useful life of the assets acquired. Increase in carrying amounts arising on revaluation of property, plant and equipment are recognized, net of tax, in other comprehensive income and accumulated in revaluation surplus in shareholders' equity. To the extent that increase reverses a decrease previously recognized in the statement of profit or loss, the increase is first recognized in the statement of profit or loss. Decreases that reverse previous increases of the same assets are first recognized in other comprehensive income to the extent of remaining surplus attributable to the asset; all other decreases are charged to the statement of profit or loss. Differences between depreciation based on the revalued carrying amount of the asset charged to the statement of profit or loss and depreciation based on the asset's original cost, net of tax, is reclassified from revaluation surplus on property plant and equipment to un appropriated profit.

   3. Finanical Instruments

This represents facilities obtained from National Bank of Pakistan for working capital requirements having aggregate sanctioned limits of Rs. 167.50 (2024: Rs. 167.50) million and are secured by way of first pari passu and ranking charges amounting to Rs. 293.113 (2024: Rs. 314.369) million over the fixed and current assets of the Company, pledge of stocks of cotton bales and yarn and personal guarantees of sponsoring directors of the Company. These facilities carry mark-up at the rate of 3 months KIBOR plus 300 bps (2024: 3 months KIBOR plus 300 bps) per annum payable on quarterly basis. These facilities had expired on 31 December 2013 and had not been renewed by the bank till the authorization for issue of these financial statements.

Finanical Assets classification

The Company classifies financial assets into the following categories:

• Financial assets subsequently measured at fair value through profit or loss

• Financial assets subsequently measured at fair value through other comprehensive income (OCI)

• Financal assets subsequently measured at amortized cost

  The classification depends on the entity's business model for managing the financial assets and the contractual terms of the cash flows.

  For assets measured at fair value, gains and losses are either recorded in profit or loss or in OCI. For investments in equity instruments that are not held for trading, this will depend on-whether the company has made an irrevocable election at the time of initial recognitian to account for the equity

  The company reclassifies debt investments when and only when its business model for managing those

  Finanical Liabilities classification

  The Company classifies financial liabilities into the following categories:

• Financial liabilities subsequently measured at amortised cost

• Financial liabilities subsequently measured at fair value through profit or loss

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

  Rcognition

  Financial instruments are recognised initially when the company becames a party to the contractual provisions of the

  Regular way purchases and sales of financial assets are recognised on trade-date, the date on which the company commits to purchase or sell the asset.

  Initial measurement Financial ossets

  When a financial asset is recognised initially, it is measured at its fair value plus, in the case of a financlal asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial asset.

  Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal and interest.

  Financial liabilities

  Financial liabilities are recognised initially st fair value and, in the case of foans and borrowings and

  payables, net of directly attributable transaction costs.

  
  
  

  The company's financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, and derivative financial instruments.

  Khalid Siraj Textile Mills Limited

  
  
  

  Subsequent measurement Financial assets

  Debt instruments

  Subsequent measurement of debt instruments depends on the company's business model for managing the asset and cash flow characteristics of the asset. Debt instruments are subsequently measured at:

• Amortised cost: Assets held only for collection of principal and interest payments Interest income is included in finance income using the effective interest rate method.

  Any gain or loss on derecognition is recognised in- profit or loss and presented in other gains / (losses) together with foreign exchange gains and losses.

• Impairment losses are presented as as separate line item in the statement of profit or loss.

  The company's financial assets at amortised cost includes trade receivables, and loans to assaciates and directors included under other non-current financial assets.

• Fair value through OCI: Assets held only for collection of principal and interest payments and for selling

• the financial assets.

  Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest income and foreign exchange gains and losses which are recognised in profit or loss.

• When the financial asset is derecognised, the cumulative gain or loss previously recognised in OCl is

  reclassified from equity to profit or loss and recognised in other gains/ (losses).

  lnterest income from these financial assets is included in finance income using the effective interest rate method.

• Foreign éxchange gains and losses are presented in other gains / (losses) and impairment expenses are-presented as separate line item in the statement of profit or loss.

• The company's debt instruments at fair value through OCl includes investments in-quoted debt

• instruments included under other non-current financial assets.

  The company elected to classify irrevacably its nan-fisted equity investments under this category.

• -Fairvalue thraugh profit or loss: assets that do not meet the criteria for amortised cost or fair value through OCl

• A gain or loss on a debt investment that is subsequently measured at fair value through profit or loss is recognised in profit or loss'and presented net within other gains / (losses) in the period jn which it arises.

  The company may make an irrevocable election at initial vecognition for particular investments in

• equity instruments that would otherwise be measured at fair value through profit or loss to present subsequent changes in fair value in OCI.

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

Equity instruments

All equity investments are subsequently measured at fair value.

-Fairvalue through OCI: elected to present fair value gains and losses on equity investments in OCI There is.no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment.

Dividends from such investments continue ta be recognised in profit or loss as other income when the group's right to receive payments is established.

Impairment losses (and reversal of impairment losses) are not reported separately from other changes in fair value.

-Fair value through profit or loss: assets that do not meet the criteria for amortised cost or fair value through OCI. Changes in the fair value are recognised in other gains / (losses) in the statement of profit or loss as applicable.

Financial Liabilities

Fair value through profit or loss: financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit ar loss.

Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term.

This category also includes derivative financial instruments entered into by the Group that are not designated as hedging instruments in hedge relationships as defined by IFRS 9.

Separated embedded derivatives are also classified as held for trading unless thiey are designated as effective hedging instruments.

Gains or losses on liabilities held for trading are recognised.in the statement of profitor loss.

Financial liabilities designated upon initial recognition at fair value through profit or loss are designated at the initial date of recognition, and only if the criteria in IFRS 9 -are satisfied. The campany has not designated any financial liability as at fair value through profit or loss.

Amortised cost: Loans and borrowings

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest rate method.

Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the effective interest rate amortisation process.

Amortised cost is calculated by taking into account any discount or premium an acquisition and fees or costs that are an integral part of the effective interest rate.

The effective interest rate amortisation is included as finance costs in the statement of profit or loss. This category generally applies to'interest-bearing loans and borrowings.

Offsetting financial instruments

Financial assets and liabilities are offset and the net amount reported in the statement of financial position when there is a legally enforceable right to-offset the recognised amounts and there-is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. The legally enforceable right must net be contingent on future events and must be enforceable in the normal course of business and in the event of defauilt, insolvency or bankruptcy of the Company or the counterparty.