environmentally responsible manner. To promote a greener Pakistan and as tangible demonstration of its Corporate & Social Responsibility, Unilevers annual report !as been printed on "##$ recycled paper. %urt!er information on our brands, business and Corporate & Social Responsibility initiatives is available on our &ebsite' &&&.unileverpakistan.com.pk
contents (ission #) Core *alues #+ Company ,nformation #- .otice of Annual /eneral (eeting #0 1irectors Report "" 2oard (eetings Attendance 33 4perating & %inancial 5ig!lig!ts 3) Statement of *alue Addition & its 1istribution 30 Pattern of S!are!olding 36 Statement of Compliance &it! t!e Code of Corporate /overnance 37 Auditors Revie& Report )3 %inancial Statements )) Consolidated %inancial Statements 8" %orm of Pro9y
mission Unilever:s mission is to add vitality to life. ;e meet everyday needs for nutrition &it! brands t!at !elp people feel good, look good and get more out of life. #)
values core ,mpeccable 1emonstrating a ;o&ing our Consumers ,ntegrity Passion for ;inning & Customers ;e are !onest, transparent ;e deliver &!at ;e &in t!e !earts and and et!ical in our dealings &e promise. minds of our consumers at all times. and customers. 2ringing out t!e <iving an =nterprise (aking a 2est in All of Us Culture 2etter ;orld ;e are empo&ered leaders, ;e believe in trust, trut! and ;e care about and &!o are inspired by ne& outstanding team&ork. ;e actively contribute to c!allenges and !ave a value a creative & fun t!e community in bias for action. environment. &!ic! &e live. #+
Company information BOARD OF DIRECTORS AUDITORS (r. =!san A. (alik (essrs A. %. %erguson & Co. C!airman & C!ief =9ecutive State <ife 2uilding .o. ">C ,.,. C!undrigar Road (r. ,mran 5usain ?arac!i. =9ecutive 1irector @ C%4 REGISTERED OFFICE (r. (. Aayser Alam =9ecutive 1irector Avari PlaBa %atima Cinna! Road (r. .oeman S!iraBi ?arac!i. =9ecutive 1irector SHARE REGISTRATION OFFICE (s. S!aBia Syed =9ecutive 1irector C@o %amco Associates DPvt.E <td. F%ormerly %erguson Associates (r. Gaffar A. ?!an DPvt.E <td.H .on> =9ecutive 1irector State <ife 2uilding .o. 3>A, ,.,. C!undrigar Road, ?arac!i. (r. ?!alid Rafi .on> =9ecutive 1irector WEBSITE ADDRESS COMPANY SECRETARY &&&.unileverpakistan.com.pk (r. Amar .aseer AUDIT COMMITTEE (r. Gaffar A. ?!an C!airman (r. ?!alid Rafi (ember (r. Aayser Alam (ember (r. ,mtiaB Caleel 5ead of ,nternal Audit & Secretary #-
.otice of Annual /eneral (eeting .otice is !ereby given t!at t!e 0#t! Annual /eneral (eeting of Unilever Pakistan <imited &ill be !eld at Pearl Continental 5otel, Club Road, ?arac!i, on ;ednesday, #8 April 3##7, at "#'## a.m. to transact t!e follo&ing business' A. Ordinary Business ". To receive and consider t!e Companys %inancial Statements for t!e year ended )" 1ecember 3##8, toget!er &it! t!e Reports of t!e Auditors and 1irectors t!ereon. 3. To approve and declare dividend D3##8E on t!e 4rdinary S!ares of t!e Company. T!e 1irectors !ave recommended final dividend of ""+$ Dor Rs -6.## per s!areE on t!e 4rdinary S!ares. Toget!er &it! t!e interim dividend of ")3$ Dor Rs 00.## per s!areE already paid, t!e total dividend for 3##8 &ill t!us amount to 3+0$ Dor Rs "3).## per s!areE. ). To appoint Auditors for t!e ensuing year, and to fi9 t!eir remuneration. D(essrs A. %. %erguson & Co., C!artered Accountants, retire and being eligible !ave offered t!emselves for re>appointmentE. B. Speia! Business +. To approve t!e remuneration of =9ecutive 1irectors including t!e C!ief =9ecutive. 2y 4rder of t!e 2oard ?arac!i A"ar Naseer %ebruary 0, 3##7 Company Secretary #0
.otice of Annual /eneral (eeting N#$es% ". S!are Transfer 2ooks &ill be closed from April 3, 3##7 to April 8, 3##7 Dbot! days inclusiveE. 3. All (embers D&!et!er !olding Preference or 4rdinary S!aresE are entitled to attend and vote at t!e meeting. A (ember may appoint a pro9y &!o need not be a (ember of t!e Company. ). 1uly completed instrument of pro9y, and t!e ot!er aut!ority under &!ic! it is signed, or a notarially certified copy t!ereof, must be lodged &it! t!e Company Secretary at t!e Companys Registered 4ffice D"st %loor, Avari PlaBa, %atima Cinna! Road, ?arac!iE at least +8 !ours before t!e time of t!e meeting. +. Any c!ange of address of (embers s!ould be immediately notified to t!e Companys S!are Registrars, %amco Associates DPrivateE <imited, F%ormerly %erguson Associates DPvt.E <td.H, State <ife 2uilding 3>A,D+t! %loorE ,. ,. C!undrigar Road, ?arac!i. C1C Account 5olders &ill furt!er !ave to follo& t!e under>mentioned guidelines as laid do&n by t!e Securities and =9c!ange Commission of Pakistan. A. F#r A$$endin& $'e Mee$in&% iE ,n case of individuals, t!e account !older or sub>account !older and @ or t!e person &!ose securities are in group account and t!eir registration details are uploaded as per t!e Regulations, s!all aut!enticate !is identity by s!o&ing !is original .ational ,dentity Card D.,CE or original passport at t!e time of attending t!e meeting. iiE ,n case of corporate entity, t!e 2oard of 1irectors resolution @ po&er of attorney &it! specimen signature of t!e nominee s!all be produced at t!e time of t!e meeting. #6
.otice of Annual /eneral (eeting B. F#r App#in$in& Pr#(ies% iE ,n case of individuals, t!e account !older or sub>account !older and @ or t!e person &!ose securities are in group account and t!eir registration details are uploaded as per t!e Regulations, s!all submit t!e pro9y form accordingly. iiE T!e pro9y form s!all be &itnessed by t&o persons &!ose names, addresses and .,C numbers s!all be mentioned on t!e form. iiiE Attested copies of .,C or t!e passport of t!e beneficial o&ners and t!e pro9y s!all be furnis!ed &it! t!e pro9y form. ivE T!e pro9y s!all produce !is @ !er original .,C or original passport at t!e time of meeting. vE ,n case of corporate entity, t!e 2oard of 1irectors resolution @ po&er of attorney &it! specimen signature s!all be submitted along &it! pro9y form to t!e Company. S$a$e"en$ Under Se$i#n )*+ ,)- ,.- #/ $'e C#"panies Ordinane0 )123. Statement in respect of Special 2usiness and related 1raft Resolution T!is Statement sets out t!e material facts concerning t!e Special 2usiness to be transacted at t!e Annual /eneral (eeting and t!e proposed Resolutions related t!ereto' A. I$e" 3 #/ $'e A&enda I Re"unera$i#n #/ E(eu$i4e Dire$#rs in!udin& C'ie/ E(eu$i4e. F#r $'e year 5++2 ' Rs +#.8 million to =9ecutive 1irectors, and Rs 36.8 million to C!ief =9ecutive. #8
.otice of Annual /eneral (eeting Es$i"a$ed /#r $'e year 5++1 ' Rs -).) million for =9ecutive 1irectors, and Rs )+.+ million for C!ief =9ecutive, as under' C!ief =9ecutive =9ecutive 1irectors DRs in millionE (anagerial Remuneration & Allo&ances 33.7 +#." Retirement 2enefits ".7 ).7 Rent & Allo&ances #.7 > (edical #." #.+ 4t!er =9penses 3.# ".- 36.8 +-.7 Parent Cos S!are 2ased RemunerationJ 0.0 6.+ )+.+ -).) J C!arged for performance based remuneration in t!e s!ape of Parent Companys s!are to t!e e9ecutive of t!e Company. =9ecutive 1irectors and C=4 are also entitled to use of Company car. =stimated for Canuary 3#"# to (arc! 3#"#' Rs ").) million for =9ecutive 1irectors and Rs 8.0 million for C!ief =9ecutive. Approval of t!e (embers is reKuired for remuneration for !olding t!eir respective office of profit in respect of t!e =9ecutive 1irectors. %or t!is purpose it is proposed t!at, t!e follo&ing resolution be passed as an 4rdinary Resolution, namely' #7
.otice of Annual /eneral (eeting 6RESO78ED THAT approval be and is !ereby granted for t!e !olding of offices of profit in t!e Company by t!e =9ecutive 1irectors including t!e C!airman @ C!ief =9ecutive, and t!e payment of remuneration to t!em for t!eir respective periods of service in accordance &it! t!eir individual contracts and t!e rules of t!e CompanyL amounting in t!e aggregate to Rs 08.0 million for t!e year Canuary to 1ecember 3##8L and Rs 86.6 million appro9imately estimated for Canuary to 1ecember 3##7 &!ic! includes variable pay for t!e year 3##8.M "#
Report 1irectors ""
1irectors Report T!e 1irectors are pleased to present t!e portfolioL an affordable detergent aimed 3##8 Annual Report toget!er &it! t!e at a large section of t!e population. audited financial statements of t!e 2everages registered a turnover gro&t! Company for t!e year ended 1ecember of 33$. 5ig!er ra& tea and conversion )", 3##8. costs resulted in reduced margins. ,ce Cream gre& by 3+.-$L !o&ever due to T!e year !as been full of c!allenges for t!e current economic environment and t!e country &it! unprecedented po&er cuts it did not meet our ambitious commodity cost increases, deteriorating gro&t! target. .eit!er &as it able to fully security environment, !ig! borro&ing absorb fi9ed costs. costs, !eavy devaluation of t!e Rupee, pressure on disposable incomes and 4perating profit increased by 38$, debilitating po&er cuts. ,n t!is backdrop, &!ereas profit after ta9 and earnings per Unilever Pakistan <imited &as able to s!are increased by "6$ over t!e previous ac!ieve a sales gro&t! of ))$ over t!e period. previous period, up from a gro&t! rate of ""$ in 3##6. T!e Company also focused Su""ary #/ Finania! Per/#r"ane on increasing e9ports &!ic! tripled over t!e preceding year and crossed Rupees 5++2 5++9 one billion. Rs in million Sales :+01;* 3),))3 4ur brand portfolio straddles t!e socio> /ross Profit )+01:; 7,#8) economic pyramid and our category /ross Profit as a $ of sales :;.:5 )8.7) footprint covers everyday use consumer Profit from 4perations :0:1) 3,0)7 goods in %oods, 2everages, 5ome & Profit before ta9 5015; 3,-37 Personal Care and ,ce Cream. ;e are also Profit after ta9 )0123 ",086 &ell positioned across a &ide price range. =PS> basic DRsE )31 "36 T!is toget!er &it! a deep distribution reac! and sustained brand investment !as Di4idend enabled us to gro& in t!ese difficult times. /ross margin, !o&ever, declined by )0" T!e 2oard of 1irectors !as recommended basis points as &e s!ielded consumers final cas! dividend of Rs -6 per s!are. ;it! from t!e full impact of !ig!er input and t!e interim dividend of Rs 00 per s!are conversion costs. already paid during t!e year, t!e total dividend for t!e year 3##8 amounts to 5ome & Personal Care continues to deliver Rs "3) D3##6' Rs "3)E per ordinary s!are double digit gro&t! in our key categoriesL of Rs -# eac!. ,n arriving at t!e decision laundry, !air care and skin care. .e& to maintain total dividend at last years launc!es, product innovations and market activations continue to be t!e drivers level, t!e 1irectors !ave been mindful of be!ind gro&t!. T!e Company is t!e need to balance s!are!olders desire continuously e9ploring ne& avenues to for income and Companys financing make offerings more affordable for t!e reKuirement for gro&t!. common man. Rin &as recently introduced in t!e market as part of our 5ome Care ")
T'e <ey .usiness "i!es$#nes =ere% Ngerm killM eKuity and is Pakistans O" c!oice for a !ealt!y family. *olumes &ere sustained despite price increases follo&ing H#"e and Pers#na! Care unprecedented inflation in input costs. T!e 5ome and Personal Care business Fair > 7#4e!y delivered its -t! year of gre& by +3$ on account of bot! double digit turnover gro&t! &it! strong inflationary impact and !ealt!y volume communication on its lo& unit priced gro&t!. Advertising costs &ere sac!ets as &ell as t!ematic interpretation significantly rationalised and t!e business of N&omens empo&ermentP. Ponds selectively invested be!ind ne& brands, transformed its imagery &it! NAnti> innovations and on>ground activations. AgingM cream launc!, &!ic! !as been very /ross margin &as depressed due to &ell>received by consumers. unprecedented inflation in international commodity costs, !o&ever optimal advertising and lo&er operating costs led H#"e > Pers#na! Care to t!e profit gro&t! of )8$. "8,### ),-## "0,### ),### ?ey .rand 'i&'!i&'$s =ere% "+,### 3,-## "3,### 3,### Surf =9cel !as gro&n impressively "#,### ",-## t!roug!out t!e year. T&o campaigns 8, ### ",### P=very C!ild 5as T!e Rig!tP and t!e 0, ### -## efficacy led communication of P?!ara +, ### # 3##) 3##+ 3 ##- 3##0 3##6 3##8 Paani (eet!a PaaniP !ave created a brand . et S ales Seg m ent P rofi ts eKuity t!at sets Surf =9cel apart from any Be4era&es brand in t!e market. Sales gro&t! of 33$ &as ac!ieved in Sunsi!<set a !ig! standard in t!e Pakistani 2everages. A s!arp rise in ?enyan tea 5air marketL and Clear s!ampoo, launc!ed prices of 3+$ as &ell as currency in 3##6 led to incremental turnover in devaluation resulted in a decline in gross 3##8 &!ic! continues to make !ead&ay margin. in t!e anti>dandruff market &it! t!e first ever male s!ampoo range. 7ip$#n&it! a blend of t!e best teas from various tea gardens around t!e &orld 7i/e.u#ys!ampoo &as t!e fastest gro&ing s!ampoo brand in rural areas during 3##8, a brings vitality, Kuality and natural goodness into our life. <ipton Qello& key beneficiary of consumer do&n trading <abel, our flags!ip product is synonymous in t!e current inflationary environment. &it! great consistent taste and !ealt!y goodness, based on t!e NT!eanineM 7u(&as impacted due to t!e economic platform. T!is year t!e main focus &as on conditions. <u9 Style A&ards &ere conducted on a smaller scale but &atc!ed <ipton Tea bags &!ic! &as supported by on>ground activations and successful by a record audience of over )8 million consumer promotions. <ipton /reen Tea &!en aired on T*. &as launc!ed &it! four ne& flavours 7i/e.u#y &it! its /erm 2uster activation strengt!ening t!e <ipton !ealt! &as !ig!ly successful in improving its proposition. "+
Spreads Br##<e B#nd Supre"e despite continuous pressure from t!e myriad of small rural brands and smuggled tea, 2lue 2and (argarines sales gre& by 3)$. registered gro&t!. T!e brand &as A ne& Rupee "# pack &as launc!ed &it! supported t!roug! consumer activation a vie& to make good nutrition accessible NC!aske Gindagi ?ayM. to every c!ild in Pakistan. T!e brand also partnered &it! ;orld %ood Be4era&es Programme D;%PE in its NSc!ool %eeding ProgramM. T!ese activities !ave been &ell 8 ## # appreciated by many loyal consumers 3# ## 6 ## # across t!e country. 0 ## # "# ## A ne& brand N%loraM &as introduced to - ## # t!e local market, specifically targeting + ## # # !ealt! conscious individuals. 4ne can cook, 3# #) 3 ## + 3# #- 3 ## 0 3# #6 3 ## 8 spread and even s!allo& fry &it! t!is . e t S a le s Se gm e nt P ro fits product. Ie Crea" 5o&ever, due to !ig! input costs t!e ;alls continued its Rourney to&ards !abit profitability of t!e spreads business &as building and making ice cream @ froBen adversely affected. dessert consumption an in!erent part of occasions and celebrations. T!e gro&t! Opera$in& #s$s of 3+.-$ !as been derived t!roug! innovation. T!e business introduced A lot of effort and focus &as applied to products in t!e price range of Rs -@> and reduce operating costs and a number of Rs "#@> to make it affordable for t!e initiatives &ere taken to reduce travelling, common man. stationary, entertainment and meeting & conference costs. T!e prevailing inflation and &orsening electricity crisis impacted t!e sales of ,ce Re@s$ru$urin& #s$s Cream. As a result, fi9ed factory costs &ere not fully recovered. ;e are continuously transforming t!e business to meet t!e c!allenges t!at lie Ie Crea" a!ead. T!e previous years re>structuring proRects !ave started yielding benefits to + ,# # # 7 # # ) ,- # # t!e Company in reduced costs and greater ) ,# # # agility. 6 # # 3 ,- # # 3 ,# # # - # # Our Pe#p!e " ,- # # ) # # " ,# # # - # # " # # Unilever takes pride in its people. T!e # performance of t!e business in suc! >- # # >" # # 3 # #) 3 # # + 3 # # - 3 # # 0 3# # 6 3 # #8 difficult times demonstrates t!e calibre . e t S a l es S e gm e nt P ro fits "-
and talent of our people. T!ere is a loss rate, our efforts &ill be focused on focused approac! to talent management sustaining it in 3##7. and developing leaders!ip skills. Sa/e$y and En4ir#n"en$ 4ur personal vitality !ealt! passport Unilever global safety standards are initiative !as consistently delivered results applied in Pakistan. Apropos to its mission in terms of employee &ell>being. ;e of adding vitality to life, Unilever Pakistan continue to place emp!asis on &ork life keeps Safety and =nvironmental Care at balance and provide gym facility and t!e !eart of its day to day business !ealt!y eating options t!roug! a vitality operations. T!e top management menu at our cafeteria. continues to revie& and provide policy ;e believe t!at continuous and consistent guidelines to all business units. communication is vital for engaging our T!e Company took a distinctive initiative people. T&o internal pulse surveys t!is year to gat!er top companies to conducted in 3##8 s!o&ed furt!er develop t!e best practices, s!aring culture strengt!ening of employee engagement and to facilitate eac! ot!er on t!e reflected in !ig!er level of pride, common grounds, so t!at t!e best Safety, satisfaction and passion for &orking for 5ealt! and =nvironment practices are Unilever. T!e C!airmans Kuarterly &eb implemented to benefit society. cast remains an important platform to engage employees, s!are business Unilever Pakistan also continues to e9cel initiatives, performance and to reiterate in Safe Travel. A compre!ensive our vision. T!is is re>enforced eac! (onday be!avioural risk assessment study !as been in t!e values meetings. conducted to assess t!e driving risk profile of t!e Sales force. Route risk assessments Unilever Standards of <eaders!ip DS4<E, a !ave also been conducted to pro>actively set of be!aviours t!at are deemed vital identify and manage driving>related risks. to be a good leader are &ell embedded. Unilever Pakistan is fully committed to ;e !ave taken personal development to continue t!is Rourney in making business anot!er level of e9cellence t!roug! operations Safer, Cleaner and /reener. coac!ing, mentoring and t!e appraisal system &e call SPerformance 1evelopment C#""uni$y In4#!4e"en$ Planning. As a multilocal, multinational company ;e continue to leverage our parent &it! strong local roots, &e play our part companys &ealt! of kno&ledge to in addressing environmental and social develop talent in leading edge marketing, concerns t!roug! our o&n actions and sales, supply c!ain, finance and !uman &orking in partners!ips at local, national resource management. Unilever globally and international level. ;e aim to meet !as transitioned training from classroom our consumer needs and provide t!em to virtual. e><earning provides latest &it! better, !ealt!ier and environmentally international training modules online. friendly products. ;e aim to retain our T!is !as also !elped to reduce travel costs. strong roots in local markets t!roug! first> ;e !ave kept talent retention as a top !and kno&ledge of t!e local culture. priority and &it! less t!an 3$ regretted "0
N(aking a better &orldM is a core belief Promotion ProRect & Pakistan in Unilever and it is reflected in t!e &ay Poverty Alleviation %und. &e conduct business, in our brands and t!roug! our people. Unilever believes t!at bE Surf 1irt is /ood > =very C!ild !as t!e !ig!est standards of corporate t!e Rig!t campaign a partners!ip be!aviour to&ards society and &orld in &it! ,dara>e>Taleem>4>Aag!ai for &!ic! &e live are essential to our success. training of teac!ers and =C= curriculums. 1uring 3##8, our main initiatives includedL cE U. ;orld %ood & 2lue 2and aE (aking Kuality primary education partners!ip I continued t!eir 3nd available to t!e lesser privileged > year of partners!ip and Unilever &orking &it!' contributed over 07,### meals T!e CitiBens %oundation DTC%E t!roug! programmes. 4ur K Public Private Partners!ips I employees are voluntarily donating K /overnment sc!ools on a mont!ly basis for t!e !unger Aliflaila 2ook 2us SocietyL and campaign. K Unilever ,nternational Art ProRect K E"p!#yee In4#!4e"en$ for sc!ools. bE =conomic =mpo&erment t!roug! Community and environment support at =ducation > Partners!ips &it! <U(S, Unilever Pakistan, is more t!an Rust a /,?,, 2eacon!ouse .ational Company initiative, it is also supported by University and 5=C>?arac!i its NpeopleM. 4ur employees &ork &it! University. various organisations giving monetary as &ell as skill support' TC%, (icro 1rip, cE Support to t!e community takes t!e Acumen & Se!at %irst. form of institutionalised long term partners!ips &it! !ealt! care C#n$ri.u$i#n $# Na$i#na! E('eAuer organisations suc! as <ayton Re!matulla! 2enevolent Trust, T!e T!e Company !as contributed Rs 8.+ Aga ?!an 5ospital and (arrie> billion to&ards t!e national e9c!eKuer on Adelaide. account of government levies, ta9es and import duties. T!is is an increase of 3)$ 2rands and Corporate & Social over 3##6 and represents 03.8)$ of value Responsibility DCSRE linkages bet&een generated in 3##8. community development and Unilever brands !elp sustain social development Re#&ni$i#n A=ards and fuels economic gro&t! over generations. ;e also develop markets in T!e a&ards and trop!ies demonstrates t!at brand led initiatives. t!e Company !as &orld class standards in managing t!e business, delivering aE <ifebuoy (a!fooB Pakistan > outstanding results, and is a learning ground partners!ips &it! USA,1 Safe in t!e country for developing talent of 1rinking ;ater and 5ygiene international standards. "6
In4es$"en$ in Re$ire"en$ Bene/i$s Unilever Pakistan &on t!e t&o K most coveted a&ards &it!in t!e Asia Africa Central and =astern T!e cost of investments made by t!e staff =urope region of Unilever. retirement funds operated by t!e %or Kuality competitive gro&t! Company as per t!eir financial statements of ))$, it received t!e at 1ecember )", 3##8 is as follo&s' N;in ?ey (arketsM a&ard. ,n addition, your Company also &on Rs million t!e N/ro& Superior 2randsM T!e Union Pakistan Provident %und 67) a&ard for t!e outstanding gro&t! Unilever Pension Plan ",-3" Unilever /ratuity Plan "8# of 0)$ by Surf. Unilever .on>(anagement Staff /ratuity %und 8) Unilever Pakistan !as once again K received t!e Pakistan Society for T#$a! 50;99 5uman Resource (anagements Total I 3##6 3,+"+ DPS5R(E N(ost Preferred /raduate =mployer A&ard 3##8M D(P/=AE. ""## graduating (2A, ,n 3##7 t!e Company &ill stop offering engineering and ,T students &ere 1irect 2enefit sc!eme to t!ose Kualifying polled. Unilevers reputation, t!e for retirement benefits for t!e first time. learning and career opportunities ,nstead t!ey &ill be offered a 1irect it offers, &ere Kuoted as t!e main Contribution sc!eme. T!ose presently reasons for selecting Unilever availing t!e former &ill be offered a c!oice Pakistan as t!e (ost Preferred to remain or convert to t!e latter. T!e /raduate =mployer 3##8. obRective of s&itc!ing to t!e 1irect Contribution sc!eme is to eliminate t!e Unilever Pakistan !as received t!e uncertainty of retirement cost liability. K coveted (anagement Reporting Cup and stood first in t!e entire C#de #/ C#rp#ra$e G#4ernane region for providing Kuality and accurate financial information &it! T!e management of t!e Company is speed. ,n addition, t!e finance committed to good corporate governance team !as been consistently and complying &it! t!e best practices. As standing first in t!e %inancial reKuired under t!e Code of Corporate Reporting A&ard up to 3##6. /overnance, t!e 1irectors are pleased to state as follo&s' Surf Pakistan, t!e fastest gro&ing K <aundry brand in Unilever &on T!e financial statements prepared K t!e (arketing =9cellence A&ard by t!e management of t!e during 3##8. Company present fairly its state of affairs, t!e result of its ,ce Cream %actory <a!ore &on t!e K operations, cas! flo&s and 3##8 AA(=T Regional Safety c!anges in eKuity. A&ard for its e9emplary safety management, especially during Proper books of account of t!e K t!e factory e9pansion proRect. listed Company !ave been "8
maintained. company by its 1irectors, C!ief =9ecutive, C!ief %inancial Appropriate accounting policies 4fficer and Company Secretary K !ave been consistently applied in and t!eir spouses and minor preparation of financial c!ildren. statements and accounting estimates are based on reasonable Dire$#rs and prudent Rudgement. T!e present directors &ere elected in t!e ,nternational %inancial Reporting A/( in 3##8, and t!e t!ree years term of K Standards !ave been follo&ed in office of t!e present 1irectors e9pires on preparation of financial April "8, 3#"". statements and any departure t!ere from !as been adeKuately Su.sidiary C#"panies and disclosed. C#ns#!ida$ed Finania! S$a$e"en$s T!e system of internal control is K T!e financial statements of t!e under sound in design and !as been mentioned subsidiaries of Unilever effectively implemented and Pakistan <imited are included in t!e monitored. T!e Audit Committee consolidated financial statements. .one comprises of t&o non>e9ecutive !ad any significant or material business directors including t!e c!airman transactions during t!e year. of t!e committee. <ever C!emicals DPrivateE <imited K <evers Associated Pakistan Trust K T!ere are no significant doubts K DPrivateE <imited upon t!e Company:s ability to SadiK DPrivateE <imited K continue as a going concern. H#!din& C#"pany T!ere !as been no departure from K t!e best practices of corporate T!roug! its &!olly o&ned subsidiary, governance, as detailed in t!e Unilever 4verseas 5oldings <imited listing regulations. DU45<E, U?, Unilever P<C, a company incorporated in t!e United ?ingdom, is Statements regarding t!e K t!e !olding company, o&ning 6).#+$ of follo&ing are anne9ed or are t!e s!ares in Unilever Pakistan <imited. disclosed in t!e notes to t!e financial statements. Audi$#rs .umber of 2oard meetings !eld K T!e Auditors, (essrs A. %. %erguson & Co., and attendance by directors. C!artered Accountants, retire at t!e conclusion of t!e meeting. 2eing eligible, ?ey financial data for t!e last K t!ey !ave offered t!emselves for re> si9 years. appointment. T!ere &ill be a c!ange in t!e engagement partner s!ould (essrs Pattern of s!are!olding. K A. %. %erguson & Co. be re>appointed as auditors. Trading in s!ares of t!e K "7
Reser4e Appr#pria$i#ns Reser4es ,Rs in $'#usand- Unappr#pria$ed CAPITA7 pr#/i$ TOTA7 C#n$in&eny O$'er 2alance as at Canuary ", 3##8 6#,737 )0),"#0 )),87- 8+3,+3# ",)"#,)-# .et profit for t!e year > > > ",78+,)30 ",78+,)30 Transferred from surplus on revaluation of fi9ed assets > net of deferred ta9ation' > incremental depreciation for t!e year > > > 0+8 0+8 Transferred from contingency reserve to unappropriated profit > D+",0)-E > +",0)- > Reclassification of S!are>based Payment as liability > > D)),87-E > D)),87-E 1ividends %or t!e year ended 1ecember )", 3##6 > 4n cumulative preference s!ares > > > D3)7E D3)7E > %inal dividend on ordinary s!ares T Rs 0) per s!are > > > D8)6,-"+E D8)6,-"+E %or t!e year ended 1ecember )", 3##8 > ,nterim dividend on ordinary s!ares T Rs 00 per s!are > > > D866,)7-E D866,)7-E 2alance as at 1ecember )", 3##8 9+0151 :5)039) > )0);:022) )0;3*052) 3#
Business Ris<s and Fu$ure Ou$!##< 5ig! inflation is resulting in lo&er consumer disposable income. As a result some consumers are do&n>trading. 5o&ever, your Companys portfolio is diverse and caters to most segments and socio>economic strata. Strong innovations and optimal investment be!ind brands &ill !elp retain loyalty. 1ecline in global commodity costs s!ould buffer t!e impact of devaluation and !ig!er energy costs. Cost and availability of bank lending may lead to de>stocking by trade. ,t could also impact t!e cost of doing business of our suppliers and co>packers. Smuggling of black tea t!roug! Afg!an Transit Trade is an ongoing t!reat to t!e documented sector in t!e tea category. Counterfeiting of our popular brands in tea and ot!er categories impacts revenue and could be inRurious to public !ealt!. ;e !ave reKuested t!e government to take appropriate measures to curb smuggling and counterfeiting. T!e electricity crisis &ill continue to !ave a negative impact on froBen dessert distribution and !ence availability. T!anking you all 4n be!alf of t!e 2oard E'san A. Ma!i< C!airman & C!ief =9ecutive ?arac!i %ebruary 0, 3##7 3"
2oard (eetings Attendance 1uring t!e year 3##8, four 2oard (eetings &ere !eld and &ere attended as follo&s' Dire$#rs N#. #/ Mee$in&s a$$ended (r. =!san A. (alik + (r. (. Aayser Alam ) (r. ,mran 5usain ) (r. .oeman S!iraBi ) (s. S!aBia Syed ) (r. Gaffar A. k!an + (r. ?!alid Rafi ) (r. Peter 5arvey " (r. Syed 2abar Ali " (r. 4mar 5. ?arim " (r. Garrar 5aider " (r. Amar .aseer " 33
4perating and %inancial 5ig!lig!ts 4perating and %inancial 5ig!lig!ts Uni$ 5++2 3##6 3##0 3##- 3##+ 3##) Rupees in million %,.A.C,A< P4S,T,4. 2alance s!eet Property, plant and eKuipment Rs in M 30352 ),-)" 3,")6 ",60" E ",-3+ E ",++- E Rs in M 1*1 +67 0#6 0#7 E 0"- E -6) E 4t!er non>current assets Rs in M ;0121 +,#6- ),080 ),+)6 E ),6-) E +,8#) E Current assets Rs in M ))0:2* 8,#8+ 0,+)# -,8#6 E -,873 E 0,83" E Total assets 4rdinary s!are capital Rs in M **3 00+ 00+ 00+ E 00+ E 00+ E Rs in M ; - - - E -E - E Preference s!are capital Rs in M )0;39 ",)"" ","0" ","68 E ",+)6 E ",)+- E Reserves Rs in M 505)* ",78# ",8)# ",8+6 E 3,"#0 E 3,#"+ E Total eKuity Rs in M ): Surplus on revaluation of fi9ed assets "+ "- "0 E "0E "7 E Rs in M *29 -#3 )+8 )07E 7#E "-) E .on>current liabilities Rs in M 2039+ -,-88 +,3)6 ),-6- E ),08# E +,0)- E Current liabilities Total liabilities Rs in M 10);9 0,#7# +,-8- ),7++ E ),66# E +,688 E Rs in M ))0:2* 8,#8+ 0,+)# -,8#6 E -,873 E 0,83" E Total eKuity and liabilities Rs in M ,5032)- D",-")E D--"E D")8E 6)E "08 E .et current DliabilitiesE @ assets 4P=RAT,./ A.1 %,.A.C,A< TR=.1S Profit and loss Rs in M :+01;9 3),))3 3#,788 "6,06" E "8,3)8 E 3",+63 E .et sales Rs in M )+01:* 7,#8) 6,6+) 0,8-+ E -,--7 E 0,67- E /ross profit Rs in M :0:1) 3,0)7 3,--# 3,--7 E 3,3+3 E 3,0## E 4perating profit Rs in M 5015; 3,-)# 3,+80 3,+83 E 3,"06 E 3,-3" E Profit before ta9 Profit after ta9 Rs in M )0123 ",086 ",0)3 ",0#3 E ",63- E ",-77 E Rs in M )0*:; ",0)- ",033 ",-7- E ",67- E ",06- E 4rdinary cas! dividends Rs in M )0:*1 ",6"+ 08+ -"# E +67 E 3-# E Capital e9penditure Cas' /!#=s Rs in M 19 3,+#0 3,+)" ",7#"E 3-7E ",)37E 4perating activities Rs in M ,)053*- D",0-0E D-)+E D+))E ","6)E D"66E ,nvesting activities Rs in M ,)0935- D",-6#E D",06-E D",803E D",8))E D3,+-8E %inancing activities Cas! and cas! eKuivalents at t!e end of t!e year Rs in M ,:0)5*- D3)-E -80 )0-E 6-7E ","0#E 3)
4perating and %inancial 5ig!lig!ts >continued Opera$in& and Finania! Hi&'!i&'$s @ #n$inued Unit 5++2 3##6 3##0 3##- 3##+ 3##) %,.A.C,A< RAT,4S Rate of return Pre ta9 return on eKuity $ ):5 "38 ")0 ")+ "#) "3- 1+ Post ta9 return on eKuity $ 8- 87 86 83 67 Return on average capital employed $ 31 66 83 63 6- -6 ,nterest cover times )2 8+ 33) "+" "#6 +) Profitability /ross profit margin $ :; )7 )6 )8 )# )3 Pre ta9 profit to sales $ 1 "" "3 "+ "3 "3 Post ta9 profit to sales $ * 6 8 7 7 6 <iKuidity Current ratio +.9 #.6 #.7 ".# ".# ".# Auick ratio +.5 #.3 #.+ #.- #.- #.- %inancial gearing 1ebt eKuity ratio +.* #." > > > > Total debt ratio +.: #." > > > #." Capital efficiency 1ebtors turnover days : ) 3 3 0 0 *3 ,nventory turnover days 0) -+ -7 0+ -0 Total assets turnover times : ) ) ) ) ) Property, plant and eKuipment turnover times 9 6 "# "# "3 "- ,nvestment measures per ordinary s!are =arnings Rs )31 "36 "3) "3# ")# "3# 1ividend payout Dincluding proposedE Rs )5: "3) "33 "3# ")- "30 1ividend payout ratio > earnings $ 2: 76 77 "## "#+ "#- 53* 1ividend payout ratio > par value $ 3+0 3++ 3+# 36# 3-3 1ividend yield $ 9 - 0 6 7 7 Price earning ratio times )5 "8 "0 "- "" "3 2reakup value &it!out surplus on revaluation Rs )*9 "+7 ")8 ")7 "-8 "-" 2reakup value &it! surplus on revaluation Rs )*2 "-# ")7 "+# "0# "-) (arket value > lo& Rs )02+2 3,### ",60# ",38# ",+## ","#) (arket value > !ig! Rs 50;+) 3,03- 3,#0# ",66- ",0)- ",0## (arket value > average Rs 50);3 3,380 ",7"# ",-38 ",-"8 ",)-3 (arket value > year end Rs )02+2 3,38# 3,### ",66- ",+6- ",+-# 530+:5 (arket capitalisation > year end Rs in ( )#,)"# 30,-88 3),-76 "7,0#7 "7,360 4rdinary s!ares of Rs -# eac! ):0513 "),37+ "),37+ "),37+ "),37+ "),37+ . o. i n t !ous a nd N#$e% Previous years figures !ave been restated in accordance &it! t!e audited financial statements. 3+
S$a$e"en$ #/ C#"p!iane =i$' $'e C#de #/ C#rp#ra$e G#4ernane ". T!e Company encourages representation of independent non>e9ecutive directors and directors representing minority interests on its 2oard of 1irectors. At present t!e 2oard includes t&o independent non>e9ecutive directors. 3. T!e directors !ave confirmed t!at none of t!em is serving as a director in more t!an ten listed companies, including t!is Company. ). All t!e resident directors of t!e Company are registered as ta9payers and none of t!em !ave defaulted in payment of any loan to a banking company, a 1%, or an .2%, or, being a member of a stock e9c!ange, !as been declared as a defaulter by t!at stock e9c!ange. +. T!e t!ree years term of office of all t!e 1irectors e9pired on "8>#+>3##8. T!e 2oard !as reduced t!e number of directors from 7 to 6 at its meeting !eld on"3>#3>3##8. T!e election &as !eld at t!e S!are!olders Annual /eneral (eeting !eld on 36>#)>3##8. (r. =!san A. (alik, (r. ,mran 5usain, (r. (. Aayser Alam, (r. .oeman S!iraBi, (s. S!aBia Syed, (r. Gaffar A. ?!an and (r. ?!alid Rafi &ere elected un>opposed for a fres! term of t!ree years commencing from "7>#+>3##8. -. T!e Company !ad already adopted and circulated a :Code of 2usiness Principles:, &!ic! !as been signed by all t!e directors and employees of t!e Company. 0. T!e Company !as a (ission Statement, and !as also defined Strategic T!rusts. T!e Company, traditionally, maintains and follo&s policies designed to align &it! t!e Unilever group of companies and global best practices in agreement &it! t!e 2oard. T!e 2oard considers any significant amendments to t!e policies, as and &!en reKuired. 5o&ever, a complete record of particulars of significant policies along &it! t!e dates on &!ic! t!ese &ere enacted !as been maintained. 6. All t!e po&ers of t!e 2oard !ave been duly e9ercised and decisions on material transactions, based on t!e significance of t!e matters involved, including appointment and determination of remuneration and terms and conditions of employment of t!e C=4 and ot!er e9ecutive directors, !ave been taken by t!e 2oard. 37
8. T!e meetings of t!e 2oard &ere presided over by t!e C!airman, and t!e 2oard met at least once in every Kuarter. ;ritten notices of t!e 2oard meetings, along &it! agenda and &orking papers, &ere circulated before t!e meetings. T!e minutes of t!e meetings &ere appropriately recorded and circulated. 7. T!e Company arranges orientation courses @ meetings for its directors. "#. T!e 1irectors: Report for t!is year !as been prepared in compliance &it! t!e reKuirements of t!e Code and fully describes t!e salient matters reKuired to be disclosed. "". T!e financial statements of t!e Company &ere duly endorsed by C=4 and C%4 before approval of t!e 2oard. "3. T!e directors, C=4 and e9ecutives do not !old any interest in t!e s!ares of t!e Company ot!er t!an t!at disclosed in t!e pattern of s!are!olding. "). T!e Company !as complied &it! all t!e corporate and financial reporting reKuirements of t!e Code. "+. T!e 2oard !as formed an audit committee. ,t comprises of t!ree members, of &!om at least t&o are non>e9ecutive directors including t!e c!airman of t!e committee. "-. T!e meetings of t!e audit committee &ere !eld at least once every Kuarter prior to approval of interim and final results of t!e Company and as reKuired by t!e Code. T!e terms of reference of t!e committee !ave been formed and advised to t!e committee for compliance. "0. T!e Company !as an effective internal audit function. T!e staff is considered to be suitably Kualified and e9perienced for t!e purpose and is conversant &it! t!e policies and procedures of t!e Company and is involved in t!e internal audit function on a full time basis. "6. T!e statutory auditors of t!e Company !ave confirmed t!at t!ey !ave been given a satisfactory rating under t!e Kuality control revie& programme of t!e ,nstitute of C!artered Accountants of Pakistan, t!at t!ey or any of t!e partners of t!e firm, t!eir spouses and minor c!ildren do not !old s!ares of t!e Company and t!at t!e firm and all its partners are in compliance &it! )#
,nternational %ederation of Accountants D,%ACE guidelines on code of et!ics as adopted by ,nstitute of C!artered Accountants of Pakistan. "8. T!e statutory auditors or t!e persons associated &it! t!em !ave not been appointed to provide ot!er services e9cept in accordance &it! t!e listing regulations and t!e auditors !ave confirmed t!at t!ey !ave observed ,%AC guidelines in t!is regard. "7. T!e management of t!e Company is committed to good corporate governance, and appropriate steps are taken to comply &it! t!e best practices. ?arac!i E'san A. Ma!i< %ebruary 0, 3##7 C!airman & C!ief =9ecutive )"
Auditors Revie& Report RE8IEW REPORT TO THE MEMBERS ON STATEMENT OF COMP7IANCE WITH BEST PRACTICES OF CODE OF CORPORATE GO8ERNANCE ;e !ave revie&ed t!e Statement of Compliance &it! t!e best practices contained in t!e Code of Corporate /overnance prepared by t!e 2oard of 1irectors of Unilever Pakistan <imited to comply &it! t!e <isting Regulation .o. )6 of t!e ?arac!i Stock =9c!ange, C!apter U,,, of <a!ore Stock =9c!ange and C!apter U, of ,slamabad Stock =9c!ange &!ere t!e Company is listed. T!e responsibility for compliance &it! t!e Code of Corporate /overnance is t!at of t!e 2oard of 1irectors of t!e Company. 4ur responsibility is to revie&, to t!e e9tent &!ere suc! compliance can be obRectively verified, &!et!er t!e Statement of Compliance reflects t!e status of t!e Companys compliance &it! t!e provisions of t!e Code of Corporate /overnance and report if it does not. A revie& is limited primarily to inKuiries of t!e Company personnel and revie& of various documents prepared by t!e Company to comply &it! t!e Code. As part of our audit of financial statements &e are reKuired to obtain an understanding of t!e accounting and internal control systems sufficient to plan t!e audit and develop an effective audit approac!. ;e !ave not carried out any special revie& of t!e internal control system to enable us to e9press an opinion as to &!et!er t!e 2oards statement on internal controls covers all controls and t!e effectiveness of suc! internal controls. 2ased on our revie&, not!ing !as come to our attention &!ic! causes us to believe t!at t!e Statement of Compliance does not appropriately reflect t!e Companys compliance, in all material respects, &it! t!e best practices contained in t!e Code of Corporate /overnance as applicable to t!e Company for t!e year ended 1ecember )", 3##8. A.F. Fer&us#n > C#. C!artered Accountants ?arac!i %ebruary 0, 3##7 )3
Statements %inancial Unilever Pakistan <imited ))
Auditors Report to t!e (embers ;e !ave audited t!e anne9ed balance s!eet of Unilever Pakistan <imited as at 1ecember )", 3##8 and t!e related profit and loss account, cas! flo& statement and statement of c!anges in eKuity toget!er &it! t!e notes forming part t!ereof, for t!e year t!en ended and &e state t!at &e !ave obtained all t!e information and e9planations &!ic!, to t!e best of our kno&ledge and belief, &ere necessary for t!e purposes of our audit. ,t is t!e responsibility of t!e Companys management to establis! and maintain a system of internal control, and prepare and present t!e above said statements in conformity &it! t!e approved accounting standards and t!e reKuirements of t!e Companies 4rdinance, "78+. 4ur responsibility is to e9press an opinion on t!ese statements based on our audit. ;e conducted our audit in accordance &it! t!e auditing standards as applicable in Pakistan. T!ese standards reKuire t!at &e plan and perform t!e audit to obtain reasonable assurance about &!et!er t!e above said statements are free of any material misstatement. An audit includes e9amining, on a test basis, evidence supporting t!e amounts and disclosures in t!e above said statements. An audit also includes assessing t!e accounting policies and significant estimates made by management, as &ell as, evaluating t!e overall presentation of t!e above said statements. ;e believe t!at our audit provides a reasonable basis for our opinion and, after due verification, &e report t!at' DaE in our opinion, proper books of accounts !ave been kept by t!e Company as reKuired by t!e Companies 4rdinance, "78+L DbE in our opinion' DiE t!e balance s!eet and profit and loss account toget!er &it! t!e notes t!ereon !ave been dra&n up in conformity &it! t!e Companies 4rdinance, "78+, and are in agreement &it! t!e books of accounts and are furt!er in accordance &it! accounting policies consistently appliedL DiiE t!e e9penditure incurred during t!e year &as for t!e purpose of t!e company:s businessL and DiiiE t!e business conducted, investments made and t!e e9penditure incurred during t!e year &ere in accordance &it! t!e obRects of t!e companyL DcE in our opinion and to t!e best of our information and according to t!e e9planations given to us, t!e balance s!eet, profit and loss account, cas! flo& statement and statement of c!anges in eKuity toget!er &it! t!e notes forming part t!ereof conform &it! approved accounting standards as applicable in Pakistan, and, give t!e information reKuired by t!e Companies 4rdinance, "78+, in t!e manner so reKuired and respectively give a true and fair vie& of t!e state of t!e company:s affairs as at 1ecember )", 3##8 and of t!e profit, its cas! flo&s and c!anges in eKuity for t!e year t!en endedL and DdE in our opinion Gakat deductible at source under t!e Gakat and Us!r 4rdinance, "78# DU*,,, of "78#E, &as deducted by t!e company and deposited in t!e Central Gakat %und establis!ed under section 6 of t!at 4rdinance. A.F. Fer&us#n > C#. C!artered Accountants ?arac!i %ebruary 0, 3##7 )-
2alance S!eet as at 1ecember )", 3##8 N#$e 5++2 5++9 DRupees in t!ousandE ASSETS .on>current assets Property, plant and eKuipment ) 303520592 ),-)#,-63 ,ntangibles + 90:+: "3,"6) <ong term investments - 1;05+5 7-,3#3 <ong term loans 0 )5+0;3; ""-,)88 <ong term deposits and prepayments 6 ;3+0+59 +,73# Retirement benefits > prepayments 8 5+;0:;; 3-#,868 ;0:1*09)+ +,##7,")) Current assets Stores and spares 7 5:)0219 "0),383 Stock in trade "# 305*)099+ 3,630,#0+ Trade debts "" 55209*: 3)7,)") <oans and advances "3 )5:01+3 "33,888 Accrued interest @ mark up @ ",""- Trade deposits and s!ort term prepayments ") ;)*033: 3)0,#0+ 4t!er receivables "+ 5)20:51 3+7,")7 Ta9 refunds due from /overnment "- :+)02): "+8,+70 Cas! and bank balances "0 )+*0921 "88,083 ;012109+2 +,#6-,#+) T#$a! asse$s ))0:2*03)2 8,#8+,"60 )0
N#$e 5++2 5++9 DRupees in t!ousandE EFUITY AND 7IABI7ITIES Capital and reserves S!are capital "6 **10399 007,+66 Reserves "8 )0;3*052) ",)"#,)-# 505);09;2 ",767,836 Surplus on revaluation of fi9ed assets "7 ):0*): "+,30" 7IABI7ITIES .on>current liabilities <iabilities against assets subRect to finance leases 3# 990:59 -3,7)3 1eferred ta9ation 3" :*10*;: )#7,#++ Retirement benefits obligations 8 5:10913 "+#,+0) *2*0993 -#3,+)7 Current liabilities Trade and ot!er payables 33 30;390913 +,6-#,+7# Ta9ation > provisions less payments @ 3",0)) Accrued interest @ mark up *30+9; ),007 Current maturity of liabilities against assets subRect to finance leases 3# :50:55 "6,36) S!ort term borro&ings 3) :05:50;5: +3),--6 Provisions 3+ ;1:0;;1 )6",#36 2039+059: -,-86,0+7 T#$a! !ia.i!i$ies 10);90+39 0,#7#,#88 C#n$in&eny and #""i$"en$s 3- T#$a! eAui$y and !ia.i!i$ies ))0:2*03)2 8,#8+,"60 T!e anne9ed notes " to +3 form an integral part of t!ese financial statements. E'san A. Ma!i< I"ran Husain C!airman & C!ief =9ecutive 1irector )6
Profit and <oss Account for t!e year ended 1ecember )", 3##8 N#$e 5++2 5++9 DRupees in t!ousandE 30 Sales :+01;*02:1 3),))",000 36 Cost of sales ,5+0+5)0);1- D"+,3+8,-8"E /ross profit )+01:;0*2+ 7,#8),#8- 36 1istribution costs ,;02:90;25- D-,#3","66E 36 Administrative e9penses ,)05)+0;+5- D",#33,)30E 38 4t!er operating e9penses ,53905**- D3"7,")#E 37 4t!er operating income 5:101)2 "7#,-88 :022+0532 ),#"",#+# Restructuring cost ,321052+- D)63,3)+E Profit from operations :0:1+01*2 3,0)8,8#0 )# %inance costs ,3**0)**- D"#7,3#8E Profit before ta9ation 5015302+5 3,-37,-78 )" Ta9ation ,13+039*- D8+3,3+#E Profit after ta9ation )01230:5* ",086,)-8 )3 =arnings per s!are DRupeesE )31 "36 T!e anne9ed notes " to +3 form an integral part of t!ese financial statements. E'san A. Ma!i< I"ran Husain C!airman & C!ief =9ecutive 1irector )8
Cas! %lo& Statement for t!e year ended 1ecember )", 3##8 N#$e 5++2 5++9 DRupees in t!ousandE CASH F7OWS FROM OPERATING ACTI8ITIES Cas! receipts from customers :90;31025; 38,"07,+"6 Cas! paid to suppliers @ service providers and employees ,5*095903::- D"8,#+7,868E Payment of indirect ta9es and ot!er statutory duties ,903590*;:- D-,773,083E Payment of royalty and tec!nical services fee ,12+0)*3- D6#0,8#0E %inance costs paid ,3+;09*+- D"#6,+)6E ,ncome ta9 paid ,)0+**0593- D8)-,607E Retirement benefits obligations DnetE ,:+301)2- D63,6+6E <ong term loans DnetE ,;0);9- D"8,76"E <ong term deposits and prepayments DnetE ,;:;0)+9- 3#,+)6 .et cas! from operating activities 190:;1 3,+#-,-0+ CASH F7OWS FROM IN8ESTING ACTI8ITIES Purc!ase of property, plant and eKuipment ,)0:*10:22- D",6"),880E Sale proceeds of property, plant and eKuipment on disposal )5+0*:+ +",8#0 Return received on savings accounts, term deposits and balance receivable from provident fund 50)2+ "0,#0" 1ividend received )5 "3 .et cas! used in investing activities ,)053*0;**- D",0-0,##6E CASH F7OWS FROM FINANCING ACTI8ITIES <iabilities against assets subRect to finance leases DnetE ,::0:9+- D3+,#8-E 1ividends paid ,)09+20525- D",-+0,##6E .et cas! used in financing activities ,)093)0*;5- D",-6#,#73E .et decrease in cas! and cas! eKuivalents ,5021+02;1- D83#,-)-E Cas! and cas! eKuivalents at t!e beginning of t!e year )8 ,5:3029;- -8-,00# Cas! and cas! eKuivalents at t!e end of t!e year )8 ,:0)5;09:3- D3)+,86-E T!e anne9ed notes " to +3 form an integral part of t!ese financial statements. E'san A. Ma!i< I"ran Husain C!airman & C!ief =9ecutive 1irector )7
Statement of C!anges in =Kuity for t!e year ended 1ecember )", 3##8 SHARE R E S E R 8 E S TOTA7 CAPITA7 CAPITA7 RE8ENUE SUB TOTA7 Arisin& C#n$in&eny O$'er @ Unappr#pria$ed under pr#/i$ s'e"es #/ arran&e"en$s /#r a"a!&a"a$i#ns , Rupees in $'#usand - 2alance as at Canuary ", 3##6 007,+66 6#,737 )3",+6" "0,0"- 6-",06# ","0#,08- ",8)#,"03 .et profit for t!e year > > > > ",086,)-8 ",086,)-8 ",086,)-8 Transferred from surplus on revaluation of fi9ed assets > net of deferred ta9ation' 0+8 0+8 > incremental depreciation for t!e year > > > > 0+8 Transferred from unappropriated profit to contingency reserve > note 3-." > > +",0)- > D+",0)-E > > =mployee benefits cost under ,%RS 3 > > "7,)73 PS!are>based PaymentP > > > "7,)73 "7,)73 > D3,""3E Utilisation of s!are based payment reserve > > > D3,""3E D3,""3E 1ividends %or t!e year ended 1ecember )", 3##0 D3)7E D3)7E > 4n cumulative preference s!ares > > > > D3)7E > %inal dividend on ordinary s!ares T Rs -6 D6-6,6-#E D6-6,6-#E per s!are > > > > D6-6,6-#E %or t!e year ended 1ecember )", 3##6 > ,nterim dividend on ordinary s!ares T Rs 0# D676,0)3E D676,0)3E per s!are > > > > D676,0)3E 8+3,+3# ",767,836 2alance as at 1ecember )", 3##6 007,+66 6#,737 )0),"#0 )),87- ",)"#,)-# ",78+,)30 ",78+,)30 .et profit for t!e year > > > > ",78+,)30 Transferred from surplus on revaluation of fi9ed assets > net of deferred ta9ation' > incremental depreciation for t!e year > > > > 0+8 0+8 0+8 Transferred from contingency reserve +",0)- > to unappropriated profit > note 3-." > > D+",0)-E > > Reclassification of S!are>based Payment as liability > note 33.) > > > D)),87-E > D)),87-E D)),87-E 1ividends %or t!e year ended 1ecember )", 3##6 > 4n cumulative preference s!ares > > > > D3)7E D3)7E D3)7E > %inal dividend on ordinary s!ares T Rs 0) per s!are > > > > D8)6,-"+E D8)6,-"+E D8)6,-"+E %or t!e year ended 1ecember )", 3##8 > ,nterim dividend on ordinary s!ares T Rs 00 per s!are > > > > D866,)7-E D866,)7-E D866,)7-E Ba!ane as a$ Dee".er :)0 5++2 **10399 9+0151 :5)039) @ )0);:022) )0;3*052) 505);09;2 T!e anne9ed notes " to +3 form an integral part of t!ese financial statements. E'san A. Ma!i< I"ran Husain C!airman & C!ief =9ecutive 1irector +#
.otes to and %orming Part of t!e %inancial Statements for t!e year ended 1ecember )", 3##8 ). THE COMPANY AND ITS OPERATIONS T!e Company is a limited liability company incorporated in Pakistan and is listed on t!e ?arac!i, <a!ore and ,slamabad Stock =9c!anges. ,t manufactures and markets !ome and personal care products, beverages, ice cream and spreads. T!e address of its registered office is Avari PlaBa, %atima Cinna! Road, ?arac!i. T!e Company is a subsidiary of Unilever 4verseas 5oldings <imited, U?, &!ereas its ultimate parent company is Unilever P<C, U?. 5. SIGNIFICANT ACCOUNTING INFORMATION AND PO7ICIES T!e accounting policies adopted are essentially t!e same as t!ose &!ic! applied for t!e previous financial year. 5.) Basis #/ prepara$i#n S$a$e"en$ #/ #"p!iane T!ese financial statements !ave been prepared in accordance &it! approved accounting standards as applicable in Pakistan. Approved accounting standards comprise of suc! ,nternational %inancial Reporting Standards D,%RSE issued by t!e ,nternational Accounting Standards 2oard as are notified under t!e Companies 4rdinance, "78+, provisions of and directives issued under t!e Companies 4rdinance, "78+. ,n case reKuirements differ, t!e provisions or directives of t!e Companies 4rdinance, "78+ s!all prevail. Cri$ia! a#un$in& es$i"a$es and Gud&e"en$s T!e preparation of financial statements in conformity &it! approved accounting standards reKuire t!e use of certain critical accounting estimates. ,t also reKuires management to e9ercise its Rudgement in t!e process of applying t!e Company:s accounting policies. T!e matters involving a !ig!er degree of Rudgement or comple9ity, or areas &!ere assumptions and estimates are significant to t!e financial statements are as follo&s' i. Ta(a$i#n T!e Company recognises liabilities for anticipated ta9 audit issues based on estimates of &!et!er additional ta9es &ill be due. ;!ere t!e final ta9 outcome of t!ese matters is different from t!e amounts t!at &ere initially recorded, suc! differences &ill impact t!e income ta9 provisions and deferred ta9 in t!e period in &!ic! suc! determination is made. ii. P#s$ e"p!#y"en$ .ene/i$s Significant estimates relating to post employment benefits are disclosed in note 8. +"
iii. Pr#4isi#ns Provisions are considered, among ot!ers, for legal matters, disputed indirect ta9es, employee termination cost and restructuring &!ere a legal or constructive obligation e9ists at t!e balance s!eet date and reliable estimate can be made of t!e likely outcome. T!e nature of t!ese costs is suc! t!at Rudgement !as to be applied to estimate t!e timing and amount of cas! flo&s. =stimates and Rudgements are continually evaluated and are based on !istorical e9perience and ot!er factors, including e9pectations of future events t!at are believed to be reasonable under t!e circumstances. T!ere !ave been no critical Rudgements made by t!e Company:s management in applying t!e accounting policies t!at &ould !ave t!e most significant effect on t!e amounts recognised in t!e financial statements. Reen$ a#un$in& de4e!#p"en$s H Ne= s$andard0 a"end"en$s $# pu.!is'ed s$andard and ne= in$erpre$a$i#n e//e$i4e in 5++2 @ re!e4an$ ,slamic %inancial Accounting Standard 3 I :,Rara!: is mandatory for t!e Companys accounting periods beginning on or after Culy ", 3##6 for t!ose iRara! agreements &!ic! commenced on or after t!is date. 1uring t!e year, t!e Company !ad entered into a sale and leaseback D,Rara!E transaction &!ic! reKuires t!e recognition of SuRra! payments Dlease rentalsE against iRara! financing as an e9pense in t!e profit and loss account on a straig!t line basis over t!e iRara! term. T!e sale price and t!e fair value of t!e assets appro9imate t!eir book value, !ence no profit or loss arose as a result of t!is transaction. H A"end"en$s $# pu.!is'ed s$andards0 ne= s$andards and in$erpre$a$i#ns e//e$i4e in 5++2 .u$ n#$ re!e4an$ T!ere are ot!er accounting standards, ne& interpretations t!at are mandatory for accounting periods beginning on or after Canuary ", 3##8 but are considered not to be relevant or !ave any significant effect to t!e Companys operations and are t!erefore not detailed in t!ese financial statements. H A"end"en$s $# pu.!is'ed s$andards0 ne= s$andards and in$erpre$a$i#ns n#$ ye$ e//e$i4e .u$ re!e4an$ %ollo&ing amendments to e9isting approved accounting standards !ave been publis!ed t!at are mandatory for t!e Companys accounting periods beginning on t!e dates mentioned belo&' DiE ,AS " :Presentation of financial statements:, issued in September 3##6 revises t!e e9isting ,AS " and reKuires apart from c!anging t!e names of certain components of financial statements, presentation of transactions &it! o&ners in statement of c!anges in eKuity and &it! non>o&ners in t!e Compre!ensive +3
,ncome statement. T!e revised standard &ill be effective from Canuary ", 3##7. Adoption of t!is standard &ill only impact t!e presentation of t!e financial statements. DiiE ,AS 3) DAmendmentE :2orro&ing costs: Deffective from Canuary ", 3##7E. ,t reKuires an entity to capitalise borro&ing costs directly attributable to t!e acKuisition, construction or production of a Kualifying asset Done t!at takes a substantial period of time to get ready for use or saleE as part of t!e cost of t!at asset. T!e option of immediately e9pensing borro&ing costs !as been removed. (oreover, t!e definition of borro&ing costs !as been amended so t!at interest e9pense is calculated using t!e effective interest met!od defined in ,AS )7 :%inancial instruments' Recognition and measurement:. T!e management !as assessed t!at t!e c!ange in interest calculation met!od &ould not !ave a material impact on t!e Company:s financial statements. DiiiE ,%RS 8 :4perating segments: Deffective from Canuary ", 3##7E. ,%RS 8 replaces ,AS "+. T!e ne& standard reKuires a :management approac!:, under &!ic! segment information is presented on t!e same basis as t!at used for internal reporting purposes. T!e management is revie&ing t!e implications on t!e Company:s financial statements: presentation. DivE ,%R,C ") :Customer loyalty programmes: Deffective from Culy ", 3##8E. ,%R,C ") clarifies t!at &!ere goods or services are sold toget!er &it! a customer loyalty incentive Dfor e9ample, loyalty points or free productsE, t!e arrangement is a multiple>element arrangement and t!e consideration receivable from t!e customer is allocated bet&een t!e components of t!e arrangement using fair values. T!ere &ill be no significant impact on its implementation. 5.5 O4era!! 4a!ua$i#n p#!iy T!ese financial statements !ave been prepared under t!e !istorical cost convention e9cept as disclosed in t!e accounting policies belo&. 5.: Pr#per$y0 p!an$ and eAuip"en$ Property, plant and eKuipment is stated at cost less depreciation and impairment e9cept capital &ork in progress &!ic! is stated at cost. 1epreciation is calculated using t!e straig!t>line met!od on all assets in use at t!e beginning of eac! Kuarter to c!arge off t!eir cost e9cluding residual value, if not insignificant, over t!eir estimated useful lives. Certain land, buildings and plant, and mac!inery &ere revalued in "76), "76-, "768 and "78" by independent valuers, &!ic! are s!o&n at suc! revalued figures. ,n compliance &it! t!e revised ,nternational Accounting Standard .o. "0, PProperty, Plant and =KuipmentP, t!e Company adopted cost model for its property, plant and eKuipment and t!e revalued figures &ere treated as deemed costs. T!e surplus on revaluation of t!ese assets, !o&ever, is recognised in accordance &it! section 3)- of t!e Companies 4rdinance, "78+. Company accounts for impairment, &!ere indication e9ists, by reducing its carrying value to t!e assessed recoverable amount. +)
(aintenance and normal repairs are c!arged to income as and &!en incurredL also individual assets costing up to Rs "#,### are c!arged to income. (aRor rene&als and improvements are capitalised and assets so replaced, if any, are retired. /ains and losses on disposal of property, plant and eKuipment are recognised in t!e profit and loss account. 5.3 In$an&i.!es ,ntangibles are stated at cost less amortisation. (aRor computer soft&are licences are capitalised on t!e basis of costs incurred to acKuire and bring to use t!e specific soft&are. T!ese costs are amortised over t!eir estimated useful life of five years using t!e straig!t>line met!od. Costs associated &it! maintaining computer soft&are programmes are recognised as an e9pense as incurred. 5.; In4es$"en$s i. In su.sidiaries T!ese are stated at cost. ii. In un!is$ed en$i$y n#$ .ein& su.sidiary T!ese are valued at cost and are classified under investment available>for>sale. 5.* Ta(a$i#n i. Curren$ T!e provision for current ta9ation is based on ta9able income at t!e current rates of ta9ation. ii. De/erred 1eferred income ta9 is provided in full, using t!e liability met!od, on temporary differences arising bet&een t!e ta9 base of assets and liabilities and t!eir carrying amounts in t!e financial statements. 1eferred income ta9 is determined using ta9 rates t!at !ave been enacted or substantially enacted by t!e balance s!eet date and are e9pected to apply &!en t!e related deferred income ta9 asset is realised or t!e deferred income ta9 liability is settled. 1eferred ta9 assets are recognised to t!e e9tent t!at it is probable t!at future ta9able profit &ill be available against &!ic! t!e temporary differences can be utilised. 5.9 Re$ire"en$ .ene/i$s T!e c!arge is based on actuarial valuations t!at are conducted annually. Actuarial gains and losses arising from e9perience adRustments and c!anges in actuarial ++
assumptions are c!arged or credited to income over t!e employees e9pected average remaining &orking lives. 5.2 S$#res and spares T!ese are valued at average cost and provision is made for slo& moving and obsolete stores and spares. ,tems in transit are valued at cost comprising invoice values plus ot!er c!arges incurred t!ereon. 5.1 S$#< in $rade All stocks are stated at t!e lo&er of cost and estimated net realisable value. Cost is determined using t!e &eig!ted average met!od e9cept for t!ose in transit &!ere it represents invoice value and ot!er c!arges paid t!ereon. Cost of &ork in process includes direct cost of materials &!ereas t!at of finis!ed goods also includes direct cost of labour and production over!eads. .et realisable value is t!e estimated selling price in t!e ordinary course of business less cost necessarily to be incurred in order to make t!e sale. 2y>product DglycerineE is valued at estimated cost e9cept for t!e stock covered by a firm for&ard sale contract, &!ic! is valued at t!e contracted price. 5.)+ Trade and #$'er de.$s Trade and ot!er debts are recognised at fair value of consideration receivable. 1ebts considered irrecoverable are &ritten off and provision is made against t!ose considered doubtful of recovery. 5.)) Cas' and as' eAui4a!en$s Cas! and cas! eKuivalents are carried in t!e balance s!eet at cost. %or t!e purposes of t!e cas! flo& statement, cas! and cas! eKuivalents comprise cas! in !and, &it! banks on current and savings accounts, term deposits &it! maturities of t!ree mont!s or less and s!ort term finances. 5.)5 7eases i. Finane !eases <eases t!at transfer substantially all t!e risks and re&ards incidental to o&ners!ip of an asset are classified as finance leases. Assets on finance lease are capitalised at t!e commencement of t!e lease term at t!e lo&er of t!e fair value of leased assets and t!e present value of minimum lease payments, eac! determined at t!e inception of t!e lease. =ac! lease payment is allocated bet&een t!e liability and finance cost so as to ac!ieve a constant rate on t!e finance balance outstanding. T!e finance cost is c!arged to profit and loss account and is included under finance costs. +-
ii. Opera$in& !eases <eases in &!ic! a significant portion of t!e risks and re&ards of o&ners!ip are retained by t!e lessor are classified as operating leases. Payments made under operating leases are c!arged to profit and loss on a straig!t>line basis over t!e period of t!e lease. 5.): Trade and #$'er paya.!es <iabilities for trade and ot!er amounts payable are carried at cost &!ic! is t!e fair value of t!e consideration to be paid in future for goods and services. 5.)3 B#rr#=in&s and $'eir #s$ 2orro&ings are recorded at t!e proceeds received. 2orro&ing costs are recognised as an e9pense in t!e period in &!ic! t!ese are incurred e9cept to t!e e9tent of borro&ing costs t!at are directly attributable to t!e acKuisition, construction or production of a Kualifying asset. Suc! borro&ing costs, if any, are capitalised as part of t!e cost of t!at asset. 5.); Pr#4isi#ns Provisions are recognised &!en t!e Company !as a present legal or constructive obligation as a result of past events, it is probable t!at an outflo& of resources &ill be reKuired to settle t!e obligation, and a reliable estimate of t!e amount can be made. Restructuring cost provisions comprise staff redundancy payments, relocation and dismantling of factory, and are recognised in t!e period in &!ic! t!e Company becomes legally or constructively committed to incur. 5.)* Finania! ins$ru"en$s %inancial instruments include investments, loans and advances, trade and ot!er debts, accrued interest @ mark up and cas! and bank balances, borro&ings, liabilities against assets subRect to finance leases and trade and ot!er payables. T!e particular recognition met!ods adopted are disclosed in t!e individual policy statements associated &it! eac! item. 5.)9 F#rei&n urreny $ransa$i#ns and $rans!a$i#n %oreign currency transactions are translated into Pak Rupees using t!e e9c!ange rates prevailing at t!e dates of t!e transactions. All monetary assets and liabilities in foreign currencies are translated into Pak Rupees at t!e rates of e9c!ange prevailing at t!e balance s!eet date. %oreign e9c!ange gains and losses on translation are recognised in t!e profit and loss account. T!e financial statements are presented in Pak Rupees, &!ic! is t!e Companys functional and presentation currency. +0
5.)2 Re4enue re#&ni$i#n Revenue comprises t!e fair value of t!e consideration received or receivable for t!e sale of goods and services in t!e ordinary course of t!e Companys activities. T!e Company recognises revenue &!en t!e amount of revenue can be reliably measured, it is probable t!at future economic benefits &ill flo& to t!e Company and specific criteria !as been met for eac! of t!e Companys activities as described belo&' i. Sa!e #/ &##ds Revenue from sale of goods is recognised on despatc! of goods to customers. Rebates and allo&ances are deducted from revenue and include rebates, price reductions and incentives given to distributors @ customers, promotional campaigns and trade communication costs. ii. In$eres$ I Mar< up in#"e ,nterest @ mark up is recognised on a time proportion basis by reference to t!e principal outstanding and t!e applicable rate of return. iii. Di4idend in#"e 1ividend is recognised as income &!en t!e rig!t of receipt is establis!ed. 5.)1 Se&"en$ in/#r"a$i#n Segment information is provided on t!e basis of product categories. A business segment is a group of assets and operations engaged in providing products t!at are subRect to risks and returns t!at are different from t!ose of ot!er business segments. Common e9penses are allocated to business segments based on t!eir respective budgeted revenue. 5.5+ Di4idends 1ividends distribution to t!e Companys s!are!olders is recognised as liability at t!e time of t!eir approval > interim dividend on declaration by 2oard of 1irectors and final dividend on approval in Annual /eneral (eeting. 5.5) S'are .ased pay"en$ T!e cost of a&arding s!ares to employees is reflected by recording a c!arge in t!e profit and loss account eKuivalent to t!e fair value of s!ares over t!e vesting period. ;!ere a&arded s!ares relate to /roup Companies a corresponding provision is created to reflect t!e liability. +6
5++2 5++9 DRupees in t!ousandE :. PROPERTY0 P7ANT AND EFUIPMENT 4perating assets > note )." :012205)* ),#76,"3" Capital &ork in progress > at cost > note ).3 33+0+*5 +)),+-" 303520592 ),-)#,-63 :.) Opera$in& asse$s <and 2uildings Plant and =lectrical, %urniture (otor ve!icles T4TA< mac!inery mec!anical and %ree!old <ease!old 4n 4n and office fittings 4&ned 5eld under free!old lease!old eKuipment finance land land leases DRupees in t!ousandE Ne$ arryin& 4a!ue .asis Year ended Dee".er :)0 5++2 4pening net book value D.2*E 3-,-6- +38 +)+,70) "0,-0+ 3,367,736 ")+,+)3 "-,867 "#8,007 8#,08+ ),#76,"3" Additions Dat costE > > 7),70# ),0-" ","--,)3) 6#,#8# ),6"# )0,#-) 63,8"+ ",+)-,-7" > > > > D"0,-6+E D"),)"0E D)7)E D-8,8+#E D",6#3E D7#,83-E 1isposals Dat .2*E 1epreciation c!arge > D6E D"+,#)6E D838E D)"6,-8)E D)),8++E D3,"+8E D-","##E D)+,"3+E D+-),06"E Closing net book value D.2*E 3-,-6- +3" -"+,880 "7,)86 ),"#",#7) "-6,)-3 "6,#+8 )+,683 ""6,063 ),788,3"0 Gr#ss arryin& 4a!ue .asis A$ Dee".er :)0 5++2 3-,-6- 6"0 003,6"7 68,-0+ +,8"#,3"# -)6,+6# )0,+"3 "7+,6+7 "68,"#6 0,-3+,-33 Cost Accumulated depreciation > D37-E D"+6,8))E D-7,"66E D",6#7,""6E D)8#,""8E D"7,)0+E D"-7,706E D0#,+)-E D3,-)0,)#0E 3-,-6- +3" -"+,880 "7,)86 ),"#",#7) "-6,)-3 "6,#+8 )+,683 ""6,063 ),788,3"0 .et book value .et carrying value basis Qear ended 1ecember )", 3##6 3-,-6- +)- 3+),"37 "",#6) ",306,"-" "06,"0# "0,8-- "+0,""8 +",+8# ",7"8,760 4pening net book value D.2*E Additions Dat costE > > 3##,0#- 0,3#0 ",3+),8)7 38,8"7 ",7"+ )+,+77 0),#-- ",-68,7)6 1isposals Dat .2*E > > > > D"),)83E D3,)))E D0-#E D8,6#+E D),#88E D38,"-6E 1epreciation c!arge > D6E D8,66"E D6"-E D3"8,#"6E D-7,3"+E D3,3+#E D0),3++E D3#,60)E D)63,76"E > > > > ))0 > > > > ))0 ,mpairment reversal Closing net book value D.2*E 3-,-6- +38 +)+,70) "0,-0+ 3,367,736 ")+,+)3 "-,867 "#8,007 8#,08+ ),#76,"3" /ross carrying value basis At 1ecember )", 3##6 3-,-6- 6"0 -08,6-7 6+,7") ),667,### --8,++6 )-,+6+ )#+,06# ""#,#06 -,+-6,03" Cost > D388E D")),670E D-8,)+7E D",+77,#6)E D+3+,#"-E D"7,-7-E D"70,##"E D37,)8)E D3,)0#,-##E Accumulated depreciation .et book value D.2*E 3-,-6- +38 +)+,70) "0,-0+ 3,367,736 ")+,+)3 "-,867 "#8,007 8#,08+ ),#76,"3" Depreia$i#n ra$e B per annu" > ".#- ".- to 3.- ".- to 3 8 to 3# 8 to 3# 8 to "+ 3- 3- +8
5++2 5++9 DRupees in t!ousandE :.5 Capi$a! W#r< In Pr#&ress J a$ #s$ Civil &orks 5;0*++ "0,")) Plant and mac!inery 3)303*5 +"6,)"8 33+0+*5 +)),+-" 1etails of property, plant and eKuipment disposed during t!e year are given in note )7. 5++2 5++9 DRupees in t!ousandE 3. INTANGIB7ES @ #"pu$er s#/$=are Ne$ arryin& 4a!ue .asis Year ended Dee".er :)0 5++2 4pening net book value )50)9: "6,#+) Amortisation c!arge ,3029+- D+,86#E Closing net book value 90:+: "3,"6) Gr#ss arryin& 4a!ue .asis A$ Dee".er :)0 5++2 Cost 530:32 3+,)+8 Accumulated amortisation ,)90+3;- D"3,"6-E .et book value 90:+: "3,"6) Remaining useful life in years ).;+ 3.-# +7
5++2 5++9 DRupees in t!ousandE ;. 7ONG TERM IN8ESTMENTS In4es$"en$s in re!a$ed par$ies ,n unKuoted &!olly o&ned subsidiary companies > at cost 7e4ers Ass#ia$ed Pa<is$an Trus$ ,Pri4a$e- 7i"i$ed "## fully paid ordinary s!ares of Rs "# eac! ) " SadiA ,Pri4a$e- 7i"i$ed "## fully paid ordinary s!ares of Rs "# eac! ) " 7e4er C'e"ia!s ,Pri4a$e- 7i"i$ed 7,-##,### fully paid ordinary s!ares of Rs "# eac! 1;0+++ 7-,### ,nvestment available for sale > at cost Fu$e'a!!y C'e"ia!s ,Pri4a$e- 7i"i$ed 3,### 0$ redeemable cumulative preference s!ares of Rs "## eac! 5++ 3## 1;05+5 7-,3#3 *. 7ONG TERM 7OANS @ #nsidered &##d Related Parties 1irectors 20)52 6,6-" C!ief =9ecutive ))03;3 "+,-#7 ?ey management personnel ot!er t!an note 0.", 0.3 1irectors and C!ief =9ecutive )02;1 -,76- and 0.) 5)033) 38,3)- 4t!ers =9ecutives )550*+5 "#6,"7+ 4t!er employees ::0*5: )0,3"" );*055; "+),+#- )990*** "6",0+# Recoverable &it!in one year > note "3 ,;90)5)- D-0,3-3E <ong term portion )5+0;3; ""-,)88 -#
*.) Reconciliation of carrying amount of loans to 1irectors, C!ief =9ecutive, ot!er key management personnel and e9ecutives' Dire$#rs C'ie/ E(eu$i4e O$'er ?ey E(eu$i4es Mana&e"en$ Pers#nne! 5++2 3##6 5++2 3##6 5++2 3##6 5++2 3##6 DRupees in t!ousandE 4pening balance 909;) -+" )30;+1 > ;019; +,83" )+90)13 80,")8 1isbursements @ > @ "-,36) @ "",33" ;10)23 6",0-3 Appointment of e9ecutives as 1irectors DnetE ,5:9- 8,07# @ > @ D8,"07E 5:9 D-3"E Appointment of ot!er key management personnel as 1irectors :03;5 > @ > ,:03;5- > @ > Repayments ,502:2- D",+8#E ,:0+;;- D60+E ,**3- D",878E ,330+):- D-#,#6-E 20)52 6,6-" ))03;3 "+,-#7 )02;1 -,76- )550*+5 "#6,"7+ *.5 T!e above loans under t!e terms of employment !ave been provided interest free to facilitate purc!ase of !ouses, ve!icles and computers repayable in mont!ly installments over a period of t!ree to five years. <oans are secured against retirement benefits of t!e employees. *.: T!e ma9imum aggregate amount of loans due at t!e end of any mont! during t!e year &as' 5++2 5++9 DRupees in t!ousandE 1irectors 10292 8,3#8 C!ief =9ecutive )305;3 "-,36) ?ey management personnel ot!er t!an 1irectors and C!ief =9ecutive *0)9* "+,800 =9ecutives )5*05;1 "#6,"7+ 9. 7ONG TERM DEPOSITS AND PREPAYMENTS Security deposits 3032+ +,6-# Prepaid rent > note 6." ;+:0;32 "6# 4t!ers :)0111 > ;3+0+59 +,73# 9.) 1uring t!e year, t!e Company paid rent of !ead office building amounting to Rs 07".6- million. As at t!e year end, Rs -##.-+ million !as been classified as long term and Rs "3#.)7 million !as been classified as s!ort term prepayments. -"
2. RETIREMENT BENEFITS 2.) T!e Company operates a provident fund, a pension plan, management and non> management gratuity plans and a pensioners medical plan for its employees. T!e pensioners medical plan is a book reserve plan &!ile t!e ot!er plans are invested t!roug! e9empt approved trust funds. T!e provident fund is a defined contribution plan. T!e pension and gratuity plans are defined benefits final salary plans. T!e pensioners: medical plan reimburses actual medical e9pense as defined in t!e plan. 2.5 T!e latest actuarial valuation of t!e defined benefit plans &as conducted at 1ecember )", 3##8 using t!e proRected unit credit met!od. 1etails of t!e defined benefit plans are' Pensi#n Fund Gra$ui$y Funds Pensi#nersD Media! P!an 5++2 3##6 5++2 3##6 5++2 3##6 DRupees in t!ousandE Ba!ane S'ee$ Re#ni!ia$i#n %air value of plan assets )0;9)0311 ",-33,--" 5:)0:+; )08,7+8 @ > ,)03*20:3*- D",+76,883E ,3)*02+:- D+#+,"37E ,)*:0)93- D")3,"8"E Present value of defined benefit obligations )+:0);: 3+,007 ,)2;0312- D)-,"8"E ,)*:0)93- D")3,"8"E %unded status Unrecognised net actuarial loss @ DgainE )+505+5 "7+,7+3 1+02;; 00,++8 )20+5: D8,383E Recognised asset @ DliabilityE 5+;0:;; 3"7,0"" ,130*3:- )",306 ,)3;0);)- D"+#,+0)E M#4e"en$ in $'e /air 4a!ue #/ p!an asse$s %air value as at Canuary " )0;550;;) ",+-6,77" :*20132 +6-,-7# =9pected return on plan assets ):90)13 "--,860 ::05;+ -",763 Actuarial gains @ DlossesE )101)9 D7,#"3E ,);0;13- D),373E =mployer contributions :20+)1 )-,)8- 5;*03+1 37,#6# 2enefits paid ,)3*0)25- D""6,087E ,3))09+2- D"8+,)73E )0;9)0311 ",-33,--" 5:)0:+; )08,7+8 %air value as at 1ecember )" M#4e"en$ in $'e de/ined .ene/i$ #.!i&a$i#ns 4bligation as at Canuary " )03190225 ",+)","-" 3+30)51 +#8,3-) ):50)2) "+-,""8 :503)+ )3,070 :)0);9 )",708 )0;3* ",700 Service cost ,nterest cost )3;015+ "-",#37 35033* +),##8 )30+;5 "-,-"3 @ D"",8#8E :3+052* ""8,-)+ @ 088 Settlement and Curtailment Actuarial losses @ DgainsE ,*)0*23- "3,-#) )+031: D"),3+3E 5;022; D33,8""E ,)3*0)25- D""6,087E ,3))09+2- D"8+,)73E ,)+031+- D8,373E 2enefits paid 4bligation as at 1ecember )" )03*20:3* ",+76,883 3)*02+: +#+,"37 )*:0)93 ")3,"8" C#s$ Current service cost :503)+ )3,070 :)0);9 )",708 )0;3* ",700 ,nterest cost )3;015+ "-",#37 35033* +),##8 )30+;5 "-,-"3 =9pected return on plan assets ,):90)13- D"--,860E ,::05;+- D-",763E @ > Settlement and curtailment @ D"",8#8E :3+052* ""8,-)+ @ 088 ))0):1 "#,8)7 )0*2+ "6,676 ,35+- 67# Recognition of actuarial loss ;5059; 30,88# :250:)1 "-7,))- );0)92 "8,7-0 =9pense );90))) "+0,80+ )90*;* +8,08# Actual return on plan assets -3
Principal actuarial assumptions used are as follo&s' 5++2 3##6 1iscount rate & e9pected return on plan assets )*.++B "".##$ %uture salary increases ):.91B 8.7#$ %uture pension increases 1.9:B -.6#$ (edical cost trend rates )+.32B -.6#$ =9pected contributions to post employment benefit plans for t!e year ending 1ecember )", 3##7 is Rs -0# million D3##8' Rs 3## millionE. C#"paris#n /#r /i4e years% 5++2 3##6 3##0 3##- 3##+ DRupees in t!ousandE As at 1ecember )" %air value of plan assets )02+502+3 ",87",+77 ",7)),-8" ",8"3,308 ",70",-+# Present value of defined benefit obligations ,50+320:5:- D3,#)+,"73E D",78+,-33E D",6-#,8"+E D",8#3,"+#E D1eficitE @ surplus ,53;0;)1- D"+3,07)E D-#,7+"E 0",+-+ "-7,+## E(periene adGus$"en$s /ain @ DlossE on plan assets Das percentage of plan assetsE +.5 B D#.6$E #.) $ D0.-$E D#.7$E D/ainE @ loss on obligations Das ,).5B- D".3$E 6.- $ ".- $ -.+ $ percentage of plan obligationsE T!e effects of a "$ movement in t!e assumed medical cost trend rate are as follo&s' Inrease Derease DRupees in t!ousandE =ffect on t!e aggregate of current service and interest costs 50);) ",60- =ffect on t!e defined benefit obligations )90)32 "+,0-3 Plan assets comprise of t!e follo&ing' 5++2 3##6 Rupees in Rupees in $ $'#usand t!ousand $ =Kuity 5:0193 ).: > > 1ebt ):+0259 9.: 633,--) )8.3 4t!ers Dinclude cas! and bank balancesE )0*320++: 1).3 ","08,7+0 0".8 )02+502+3 )++ ",87",+77 "## T!e e9pected return on plan assets &as determined by considering t!e e9pected returns available on t!e assets underlying t!e current investment policy. =9pected yields on fi9ed interest investments are based on gross redemption yields as at t!e balance s!eet date. -)
T!e actuary conducts separate valuations for calculating contribution rates and t!e Company contributes to t!e pension and gratuity funds according to t!e actuarys advice. =9pense of t!e defined benefit plans is calculated by t!e actuary. 2ased on t!e above actuarial valuation t!e retirement benefits > asset amounts to Rs 3#-.)- million D3##6' Rs 3-#.88 millionE and retirement benefits > liability amounts to Rs 3)7.67 million D3##6' Rs "+#.+0 millionE. 2.: 1uring t!e year t!e Company contributed Rs -".)7 million D3##6' Rs +-.+) millionE to t!e provident fund. 5++2 3##6 DRupees in t!ousandE 1. STORES AND SPARES Stores Dincluding in transit Rs 8.8# millionL *20222 -8,-)" 3##6' Rs 6.60 millionE Spares Dincluding nil in transitL 3##6' Rs #.-7 millionE )13019) "38,867 4t!ers 5015+ 3,"3# 5**0991 "87,-)# ,:30225- D30,3+8E Provision for slo& moving and obsolete stores and spares 5:)0219 "0),383 T!e Company !as recognised a provision of Rs 8.0) million D3##6' Rs 7.3 millionE for obsolescence and not &ritten off inventory amounting to Rs nil D3##6' Rs -."7 millionE by utilising t!e provision. 5++2 3##6 DRupees in t!ousandE )+. STOC? IN TRADE Ra& and packing materials at cost Dincluding in transit Rs -0- millionL 3##6' Rs 0"8 millionE 502)50;); ",6"-,860 Provision for obsolescence ,)3+033+- D-0,0+7E 50*950+9; ",0-7,336 ;ork in process )+503** 00,"73 %inis!ed goods Dincluding in transit Rs 30+ millionL 3##6' Rs 3#8 millionE )0;;+0:1) ",#6),30+ 2y product > glycerine )209)+ 3,")" )0;*10)+) ",#6-,)7- Provision for obsolescence ,2)0295- D6+,6-#E )03290551 ",###,0+- 305*)099+ 3,630,#0+ -+
)+.) Stock in trade includes Rs 60# million D3##6' Rs )+0 millionE !eld &it! t!ird parties. )+.5 T!e above balances include items costing Rs ))6.7 million D3##6' Rs 3#8.+ millionE valued at net realisable value of Rs 8#.6 million D3##6' Rs -#.6 millionE )+.: T!e Company !as recognised a provision of Rs "70.#0 million for obsolescence D3##6' Rs 80.#0 millionE and !as &ritten off inventory amounting to Rs "#-."+ million D3##6' Rs )8.+0 millionE by utilising t!e provision during t!e year ended 1ecember )", 3##8. 5++2 3##6 DRupees in t!ousandE )). TRADE DEBTS Considered good 55209*: 3)7,)") Considered doubtful 39031) -+,"-+ 59*05;3 37),+06 Provision for doubtful debts > note ""." ,39031)- D-+,"-+E 55209*: 3)7,)") )).) T!e Company !as recognised a provision of Rs ).3- million D3##6' reversed a provision of Rs ".-3 millionE and !as &ritten off debts amounting to Rs 7.7" million D3##6' .ilE by utilising t!e provision during t!e year ended 1ecember )", 3##8. 5++2 3##6 DRupees in t!ousandE )5. 7OANS AND AD8ANCES C#nsidered &##d Current portion of loans to employees > note 0 ;90)5) -0,3-3 Advances to' =9ecutives > note "3." )+0:93 -,""# Suppliers and ot!ers ;*03+1 0",-30 )5:01+3 "33,888 C#nsidered d#u.$/u! Advances to suppliers and ot!ers *0533 0,3++ ):+0)32 "37,")3 Provision for doubtful advances to suppliers and ot!ers ,*0533- D0,3++E )5:01+3 "33,888 --
)5.) T!e advances to e9ecutives are given to meet business e9penses and are settled as and &!en t!e e9penses are incurred. 5++2 3##6 DRupees in t!ousandE ):. TRADE DEPOSITS AND SHORT TERM PREPAYMENTS Trade and margin deposits ):+02+2 6",67# Prepayments =RP implementation )3)0593 +",6)3 Rent > note 6." )3*0+9: )",8#6 4t!ers > note ")." 120522 7#,6)- ;)*033: 3)0,#0+ ):.) T!is includes prepayment in respect of s!ares matc!ed by t!e Company under t!e follo&ing s!are>based compensation plan' 8aria.!e Pay In S'ares ,8PIS-% Under t!is plan, employees eligible as per policy can c!oose to take bet&een "#$ and 3-$, or none at all, of t!eir gross variable pay in s!ares of Unilever P<C or Unilever .*. ,f t!e employee opts for t!e s!ares, Unilever P<C and Unilever .* &ill grant matc!ing s!ares, on t!e condition t!at t!e employee stays &it! t!e Company and !olds t!ese s!ares for at least t!ree years. 8PIS Unilever P<C Unilever .* S!ares of (arc! 3", 3##6 (arc! 3", 3##6 1ate of grant (arc! 3#, 3##8 (arc! 3#, 3##8 Total number of s!ares 3##6 ",-3- ",-6" granted 3##8 ",-)3 ",-)7 3##6 V"+.88 V3".)) %air value @ S!are price on grant date 3##8 V"0.63 V3".)# Contractual life DyearsE ) ) *esting conditions Performance Performance conditions conditions Settlement S!ares S!ares =9pected lapse per year 3#$ 3#$ =9pected outcome of meeting t!e performance criteria Dat t!e grant dateE 3#"# by (arc! 3", by (arc! 3", 3#"# 3#"# 3#"" by (arc! 3#, by (arc! 3#, 3#"" 3#"" -0
5++2 3##6 DRupees in t!ousandE )3. OTHER RECEI8AB7ES Reei4a.!e /r#" re!a$ed par$ies Unilever Pakistan %oods <imited *:0**1 "7,+"# Union Pakistan Provident %und @ )",++6 Unilever /ratuity Plan :905:3 "3),7)6 Associated undertakings 5+03;2 > ;orkers: profits participation fund > note "+." ;;0;9) 7,"38 O$'ers =9port rebate claims receivable @ 3,#"7 Receivable from distributors on account of eKuipment supply ;0:5+ "8,836 Receivable from supplier on account of marketing reimbursement @ "8,333 Receivable in respect of sale of fi9ed assets )*03*3 > 4t!ers 520::) )+,806 5590+39 3-6,8-6 Provision for doubtful receivables ,209)2- D8,6"8E 5)20:51 3+7,")7 )3.) W#r<ersE pr#/i$s par$iipa$i#n /und 2alance as at Canuary " > receivable 10)52 -3,30" Allocation for t!e year ,);90+92- D")-,80"E ,)3901;+- D8),0##E Amount paid to t!e trustees 5+:0;5) 73,638 2alance as at 1ecember )" > receivable ;;0;9) 7,"38 );. TAK REFUNDS DUE FROM GO8ERNMENT Sales ta9 refundable > amounts paid under protest > note "-." ):90+)5 "+8,+07 Ta9ation > payments less provision )*30993 > 4t!ers 59 36 :+)02): "+8,+70 -6
);.) T!is includes a sum of Rs ")" million D3##6' Rs "+" millionE paid by &ay of abundant caution under t!e Amnesty Sc!eme, to avoid additional Sales Ta9 and Surc!arge being levied in t!e event of unfavourable decisions of t!e appeals pending in t!e 5ig! Courts. T!ese appeals &ere filed by t!ird party manufacturers in respect of disallo&ance of input ta9 claimed by t!em on t!e ground t!at ta9 invoices and bills of entry &ere in t!e Companys name. T!e contracts &it! suc! manufacturers provided t!at in t!e event of any liability arising against t!em on t!is account, t!e Company &ould reimburse t!e ta9. T!e Companys management and legal advisors e9pect a favourable outcome of t!e appeals, o&ing to t!e fact t!at t!e demands arose as a result of procedural matters and t!at t!ere &as no loss of revenue to t!e /overnment. ;it!out preRudice to t!e earlier appeals filed, t!e Company !as referred one of t!e above cases to t!e Alternate 1ispute Resolution Committee, constituted under t!e Sales Ta9 la&, t!e decision of &!ic! is still a&aited. 5++2 3##6 DRupees in t!ousandE )*. CASH AND BAN? BA7ANCES ;it! banks on' current accounts )+30122 3#,"00 savings accounts @ "06,373 ,n !and' cas! )02+) ",33+ )+*0921 "88,083 )9. SHARE CAPITA7 Au$'#rised s'are api$a! +6,8)- -$ cumulative preference s!ares of Rs "## eac! 3092: +,68) "-,7#+,))# 4rdinary s!ares of Rs -# eac! 91;05)9 67-,3"6 2++0+++ 8##,### Issued0 su.sri.ed and paid up api$a! -$ cumulative preference s!ares of Rs "## eac! S!ares allotted' +),8)- for consideration paid in cas! 30:2: +,)8) +,### for acKuisition of an undertaking 3++ +## +6,8)- 3092: +,68) 4rdinary s!ares of Rs -# eac! S!ares allotted' +06,6#+ for consideration paid in cas! 5:0:2; 3),)8- +,767,3#8 for consideration ot!er t!an cas! under sc!emes of arrangements for amalgamations 53201*) 3+8,70" 6,8+0,7-6 as bonus s!ares :150:32 )73,)+8 "),37),807 **30*13 00+,07+ **10399 007,+66 -8
At 1ecember )", 3##8 Unilever 4verseas 5oldings <imited, U?, a &!olly o&ned subsidiary of Unilever P<C, U? !olds 7,6"",37) ordinary s!ares and )),6)- preference s!ares of Unilever Pakistan <imited D1ecember )", 3##6' 7,)-7,+"3 ordinary s!ares and )),6)- preference s!aresE. 5++2 3##6 DRupees in t!ousandE )2. RESER8ES Capi$a! reser4es Arising under sc!emes of arrangements for amalgamations > note "8." 9+0151 6#,737 :5)039) Contingency > note 3-." )0),"#0 4t!er > note 33.) @ )),87- :1503++ +06,7)# )0);:022) Re4enue reser4es 8+3,+3# Unappropriated profit )0;3*052) ",)"#,)-# )2.) T!is represents amounts of Rs "8.)0 million and Rs -3.-6 million t!at arose under sc!emes of arrangement for amalgamations of former (e!ran ,nternational DPrivateE <imited, former Ambrosia ,nternational <imited and former Pakistan ,ndustrial Promoters DPrivateE <imited &it! t!e Company. )1. SURP7US ON RE8A7UATION OF FIKED ASSETS T!is represents surplus over book values resulting from t!e revaluations of property, plant and eKuipment carried out in "76), "76-, "768 and "78", adRusted only by surplus realised on disposal of revalued assets, incremental depreciation arising out of revaluation and deferred ta9ation. 5++2 3##6 DRupees in t!ousandE 2alance as at Canuary " )305*) "+,7#7 Transferred to unappropriated profit > net of deferred ta9ation' ,*32- D0+8E incremental depreciation for t!e year ):0*): "+,30" 2alance as at 1ecember )" -7
5++2 3##6 DRupees in t!ousandE 5+. 7IABI7ITIES AGAINST ASSETS SUBLECT TO FINANCE 7EASES Present value of minimum lease payments )+10*31 6#,3#- Current maturity s!o&n under current liabilities ,:50:55- D"6,36)E 990:59 -3,7)3 Mini"u" !ease pay"en$s .ot later t!an " year 3*0519 3+,68" <ater t!an " year and not later t!an - years 230331 0",+)- ):+093* 80,3"0 %uture finance c!arges on finance leases ,5)0+19- D"0,#""E Present value of finance lease liabilities )+10*31 6#,3#- Present value of finance lease liabilities .ot later t!an " year :50:55 "6,36) <ater t!an " year and not later t!an - years 990:59 -3,7)3 )+10*31 6#,3#- T!e above represents finance leases entered into &it! leasing companies for motor ve!icles. T!e liability is payable by 1ecember 3#"3 in semi annual and Kuarterly installments. <ease payments bearing pre>determined markup rates include finance c!arge ranging from 0.3-$ to 8.33$ per annum D3##6' 8$ to "+.6-$ per annumE &!ic! are used as discounting factors. <ease payments bearing variable markup rates include finance c!arge at ?,24R W #.8-$ > 3$ per annum. ?,24R is determined on semi>annual basis for ne9t t&o Kuarterly and semi annual rentals. 0#
3##6 C!arge @ 5++2 4pening DreversalE C!#sin& DRupees in t!ousandE 5). DEFERRED INCOME TAK 7IABI7ITIES I ,ASSETS- Credit @ DdebitE balance arising in respect of' -#7,-++ 3#),78) 9):0;59 accelerated ta9 depreciation allo&ance 6,08" D070E *012; surplus on revaluation of fi9ed assets )8,0)8 D-#,""+E ,))039*- provision for retirement benefits D"",80+E D"3#E ,))0123- s!are>based payments reserve provision for stock in trade and stores and spares D--,"66E D)","#+E ,2*052)- provision for doubtful debts, advances and ot!er receivables D)8,--6E 3,#") ,:*0;33- provision for restructuring D"37,8-7E D)",868E ,)*)09:9- ot!ers D"",)03E D)",+6-E ,3502:9- )#7,#++ 0#,0#7 :*10*;: 5++2 3##6 DRupees in t!ousandE 55. TRADE AND OTHER PAYAB7ES 3:+0+29 Creditors 3-7,""+ 3)50:3; 2ills payable ",3"#,#76 502110325 Accrued liabilities 3,60-,837 53*0;+9 Royalty and tec!nical services fee ")#,+38 290+)) Advance payment from customers 6+,-#- 1)0:+1 Sales ta9 payable -",+7" 1+02)3 %ederal e9cise duty payable -",66" 1:0319 ;orkers: &elfare fund 6-,0)8 )90):9 Security deposits from dealers > note 33." "6,")6 )+*039) Unclaimed dividend 77,0#- ))01:9 Union Pakistan Provident %und > related party > ))0121 Unilever Pension Plan > related party > <iability for s!are>based compensation :;01;: plans > note 33.) > ):05;; 4t!ers "+,86- 30;390913 +,6-#,+7# 55.) T!is represents security deposits obtained by former Pakistan ,ndustrial Promoters DPrivateE <imited against freeBer cabinets placed &it! dealers. 0"
55.5 Amounts due to related parties included in trade and ot!er payables are as follo&s' 5++2 3##6 DRupees in t!ousandE Ultimate parent company 53*0;+9 ")#,+38 Associated companies 2390*;) ",+)#,)"+ Subsidiaries 5 3 T!ird parties &!ose manufacturing processes are dependent on Unilever 9305)2 -),688 Company in &!ic! close family member of a 1irector is !olding directors!ip 5203)2 03,"#" 55.: S'are@.ased #"pensa$i#n p!ans As at 1ecember )", 3##8 t!e company !ad follo&ing s!are>based compensation plans' G!#.a! Per/#r"ane S'are P!an ,GPSP- and 7eaders'ip Per/#r"ane S'are P!an ,7PSP-% Under t!e plans, employees eligible as per policy can be a&arded conditional s!ares of Unilever P<C or Unilever .* &!ic! &ill vest t!ree years later depending on Unilevers ac!ievement of set targets for Underlying Sales /ro&t! DUS/E, Ungeared %ree Cas! %lo& DU%C%E and Total S!are!older Return DTSRE ranking over t!e t!ree> year performance period. T!e details of t!e arrangements are as follo&s ' GPSP 7PSP S!ares of Unilever P<C Unilever .* Unilever P<C Unilever .* 1ate of grant 3##0 (arc! 3", 3##0 (arc! 3", 3##0 (arc! 3", 3##0 (arc! 3", 3##0 3##6 (arc! 3", 3##6 (arc! 3", 3##6 (ay 33, 3##6 (ay 33, 3##6 3##8 (arc! 3", 3##8 > (arc! 3#, 3##8 (arc! 3#, 3##8 Total number of s!ares granted 3##0 "+,768 -8- ",++6 ",++# 3##6 "#,+8# "8# ",-)# ",-)# 3##8 0,+7+ > ",33- ",33- )",7-3 60- +,3#3 +,"7- %air value @ S!are price on grant date 3##0 V ").#" X"7.#) V ").#" X"7.#) 3##6 V "+.88 X3".)) V"-.83 X33.3# 3##8 V "0.63 > V"0.63 X3".36 Contractual life DyearsE ) ) ) ) *esting conditions Performance Performance Performance Performance conditions conditions and market and market conditions conditions Settlement S!ares S!ares S!ares S!ares =9pected lapse per year 3#$ 3#$ 3#$ 3#$ =9pected outcome of meeting t!e performance criteria Dat t!e grant dateE 3##7 by (arc! 3", 3##7 by (arc! 3", 3##7 by (arc! 3", 3##7 by (arc! 3", 3##7 3#"# by (arc! 3", 3#"# by (arc! 3", 3#"# by (ay 33, 3#"# by (ay 33, 3#"# 3#"" by (arc! 3#, 3#"" > by (arc! 3#, 3#"" by (arc! 3#, 3#"" .o dividend payments &ere e9pectedL conseKuently, t!e measurement of t!e fair value did not consider dividends. 03
55.:.) De$ai!s #/ p!an $'a$ 4es$ed durin& $'e year are% GPSP S!ares of Unilever P<C Unilever .* 1ate of grant (ay "8, 3##- (ay "8, 3##- *esting date (ay "8, 3##8 (ay "8, 3##8 %air value @ S!are price on grant date V "".76 X "6.-6 %air value @ S!are price on vesting date V "6.33 X 3#.77 1ifference of grant date and V "-.3- X ).+3 settlement date fair value Contractual life DyearsE ) ) *esting conditions Performance Performance conditions conditions Settlement Cas! Cas! =9pense arising on settlement "#,"#0 67" ,n vie& of rec!arge arrangements and payments in cas!, t!e Company !as treated t!ese s!are>based plans as liability. 5:. SHORT TERM BORROWINGS S'#r$ $er" runnin& /inane @ seured T!e facilities for running finance available from various banks amount to Rs -.77 billion D3##6' Rs +.+3 billionE. T!e rates of markup range bet&een ").7#$ to "0.30$ per annum D3##6' 7.0#$ to "#."+$ per annumE. T!e arrangements are secured by &ay of pari>passu c!arge against !ypot!ecation of Company:s stock in trade. T!e facilities for opening letters of credit and guarantees as at 1ecember )", 3##8 amounted to Rs 3.)6 billion D3##6' Rs +.0- billionE, of &!ic! t!e amount remaining unutilised at t!e year end &as Rs ".)+ billion D3##6' Rs ).-3 billionE. 0)
5++2 3##6 DRupees in t!ousandE 53. PRO8ISIONS )+20:3) Provision for cess less payments > note 3-." > Res$ru$urin& 2alance as at Canuary " :9)0+59 ""#,### Provision during t!e year > note 3+." 321052+ )63,3)+ Utilised during t!e year ,:9;0+21- D""",3#6E 2alance as at 1ecember )" 32;05)2 )6",#36 ;1:0;;1 )6",#36 53.) T!e provision booked in 3##6 in respect of staff redundancy for beverages business and relocation @ dismantling cost of a factory !as been fully utilised during t!e year. (oreover, t!e Company !as also raised provisions for planned staff redundancy for some factory employees and management staff. T!e full amount of provisions is e9pected to be utilised during 3##7. 5;. CONTINGENCY AND COMMITMENTS 5;.) C#n$in&eny /overnment of Sind! t!roug! %inance Act, "77+ levied fee for services rendered in respect of development and maintenance of infrastructure on t!e import and e9port of goods. 5o&ever, t!e Company filed a constitutional petition against t!e levy of suc! fee in t!e 5ig! Court of Sind! and t!e Court granted stay for t!e payment of t!e fee. 1uring t!e year 3##", t!e /overnment of Sind! introduced Cess in place of infrastructure fee &it! retrospective effect. As a result, Unilever:s petition became infractuous and a fres! suit &as filed by Unilever to c!allenge t!e levy. A stay against recovery of t!e aforesaid levy of Cess &as also obtained from t!e Court. ,n 3##) t!e 5ig! Court decided t!e issue against t!e Company. Against t!is order an intra court appeal &as filed &it! t!e 5ig! Court. T!e appeal &as disposed in August 3##8, &!ereby t!e levy imposed and collected &it! effect from 1ecember 38, 3##0 &as declared valid and all imposition and collection before suc! date as invalid. T!e Court furt!er ordered t!at all bank guarantees @ securities furnis!ed for transactions before 1ecember 38, 3##0 stand disc!arged and are liable to be returned back and t!ose furnis!ed in respect of transactions after 1ecember 38, 3##0 are liable to be encas!ed. T!e Company as &ell as t!e /overnment of Sind! !ave filed appeals in t!e Supreme Court against t!e said order. A provision amounting to Rs "3#.78 million concerning t!e levy &it! respect from 1ecember 38, 3##0 !as been recognised in t!e financial statements. (oreover, t!e Company !as paid an amount of Rs "3.0+ million under protest against t!e said order. 0+
As a matter of prudence, a total of Rs )3".+6 million as at 1ecember )", 3##8 DRs )0)."" million as at 1ecember )", 3##6E out of t!e revenue reserves !as been earmarked as contingency reserve for t!e levy uptil 1ecember 3##0. 5;.5 C#""i$"en$s Aggregate commitments for capital e9penditure and for&ard purc!ases as at 1ecember )", 3##8 amounted to Rs "30.3) million D3##6' Rs 0#6.0# millionE and Rs -)#.6+ million D3##6' Rs 806.0+ millionE respectively. Aggregate commitments for operating lease rentals as at 1ecember )", 3##8 amounts to' 5++2 3##6 DRupees in t!ousandE .ot later t!an one year 1:0::+ -",6#" 4ver one year to five years )+90)+5 36,-)7 5++03:5 67,3+# T!e above includes uRra! payments for ,Rara! financing of motor ve!icles bearing a mark up of si9 mont!s ?,24R W ".)-$ for rentals payable semi annually. 5*. SEGMENT INFORMATION Segmental results and ot!er information is provided belo& on t!e basis of product categories. T!ese categories are' 5ome and Personal Care > represents laundry and a &ide range of cleaning, skin cleansing, skin care, !air care, deodorants, oral care and ot!er personal care products 2everages > represents tea ,ce Cream > represents ice cream 4t!er > represents margarine 0-
30." Segment analysis HOME AND BE8ERAGES ICE CREAM OTHER TOTA7 PERSONA7 CARE DRupees in t!ousandE E Se&"en$ resu!$s /#r $'e year ended Dee".er :)0 5++2 /ross sales 3",-3+,7-3 "",6"-,68# -,#-8,7++ 6-6,+70 )7,#-6,"63 Sales ta9 D),#6-,"30E D",6"0,0--E D8+0,387E > D-,0)8,#6#E %ederal e9cise duty D673,76+E D76,--7E D+",)30E > D7)",8-7E D),808,"##E D",8"+,3"+E D886,0"-E > D0,-07,737E Sales e9cluding sales ta9 and federal e9cise duty "6,0-0,8-3 7,7#",-00 +,"6",)37 6-6,+70 )3,+86,3+) > Rebates and allo&ances D8+6,783E D)#7,7#)E D)+0,63+E D3-,67-E D",-)#,+#+E "0,8#8,86# 7,-7",00) ),83+,0#- 6)",6#" )#,7-0,8)7 Cost of sales D7,0)3,)3"E D6,))8,7++E D3,-+),08)E D-#0,3""E D3#,#3","-7E /ross profit 6,"60,-+7 3,3-3,6"7 ",38#,733 33-,+7# "#,7)-,08# 1istribution costs D),)+8,877E D","7",-#3E D",#07,#6"E D338,""#E D-,8)6,-83E Administrative and restructuring cost allocated to segments D863,#67E D+#3,""+E D33+,778E D)-,)08E D",-)+,--7E Segment result 3,7--,-6" 0-7,"#) D"),"+6E D)6,788E ),-0),-)7 Administrative and restructuring cost unallocated D"0-,33)E 4t!er operating e9penses D3+6,300E 4t!er operating income 3)7,7"8 Profit from operations ),)7#,708 %inance costs D+00,"00E Profit before ta9ation 3,73+,8#3 Ta9ation D7+#,+60E Profit after ta9ation ",78+,)30 Se&"en$ resu!$s /#r $'e year ended Dee".er :)0 5++9 /ross sales "-,-#-,078 7,683,0+" ),7-#,8"6 0"-,0-" 37,8-+,8#6 Sales ta9 D3,3"-,6+)E D",+#3,787E D0+0,0#-E > D+,30-,))6E %ederal e9cise duty D-6#,7-+E D)),00"E D"),+#)E > D0"8,#"8E D3,680,076E D",+)0,0-#E D00#,##8E > D+,88),)--E Sales e9cluding sales ta9 and federal e9cise duty "3,6"7,##" 8,)+-,77" ),37#,8#7 0"-,0-" 3+,76",+-3 Rebates and allo&ances D7"6,+76E D+8-,7#8E D3"6,"8)E D"7,"78E D",0)7,680E "",8#",-#+ 6,80#,#8) ),#6),030 -70,+-) 3),))",000 Cost of sales D0,)63,+66E D-,0)0,+")E D",88",670E D)-6,87-E D"+,3+8,-8"E /ross profit -,+37,#36 3,33),06# ","7",8)# 3)8,--8 7,#8),#8- 1istribution costs D3,8)8,+#0E D",38#,-0)E D66+,83+E D"36,)8+E D-,#3","66E Administrative and directly attributable restructuring cost D++),7"3E D0+3,+77E D3)6,--8E D"7,80+E D",)+),8))E Segment result 3,"+0,6#7 )##,0#8 "67,++8 7",)"# 3,6"8,#6- Administrative and restructuring cost not directly related to segments D-#,636E 4t!er operating e9penses D3"7,")#E 4t!er operating income "7#,-88 Profit from operations 3,0)8,8#0 %inance costs D"#7,3#8E Profit before ta9ation 3,-37,-78 Ta9ation D8+3,3+#E Profit after ta9ation ",086,)-8 00
30." Segment analysis > continued HOME AND BE8ERAGES ICE CREAM OTHER TOTA7 PERSONA7 CARE DRupees in t!ousandE E O$'er se&"en$ in/#r"a$i#n As a$ Dee".er :)0 5++2 Segment assets ),++8,-3# ",667,"-+ ),+07,7#3 00,)-0 8,60),7)3 Unallocated assets 3,033,+80 "",)80,+"8 Segment liabilities ",6+",)#7 6)-,3"8 )73,378 ")","60 ),###,##" Unallocated liabilities 0,"-6,#+0 7,"-6,#+6 F#r $'e year ended Dee".er :)0 5++2 Capital e9penditure )00,-#0 +",8+" 8-#,7#6 )-,-"8 ",37+,663 Cost of goods manufactured 7,#33,"8" 6,0+6,68) 3,-00,##8 +#","7+ "7,0)6,"00 4t!er segment items Staff costs 83+,)6) -80,"+0 +"#,"03 )",7+7 ",8-3,0)# Advertising ",67#,#)) +#7,+"0 )67,-0# "-3,3## 3,6)",3#7 (arketing and selling 66,-)8 +-,7#0 )#,#0- +,6+6 "-8,3-0 4ut&ard freig!t and !andling +33,--0 "+6,8)6 3#7,)7" 3#,0## 8##,)8+ Royalty and tec!nical services fee 0#+,6)7 )"8,8+" "+7,78# 33,08) ",#70,3+) 1epreciation "38,"#6 +8,0-6 36#,707 -,7)8 +-),06" As a$ Dee".er :)0 5++9 Segment assets 3,)+),+37 ",)70,0#) 3,7)),87" 0),78) 0,6)6,7#0 Unallocated assets ",)+0,36# 8,#8+,"60 Segment liabilities ",+68,--" ",8)+,666 373,766 7),+#6 ),077,6"3 Unallocated liabilities 3,)7#,)60 0,#7#,#88 F#r $'e year ended Dee".er :)0 5++9 Capital e9penditure "-7,0+6 "#+,+07 ",-#-,6+) 6,#83 ",660,7+" Cost of goods manufactured 0,#8-,60- -,6"",3)) ",860,)#- 306,6"- "),7+",#"8 4t!er segment items Staff costs 6"0,+7) -73,"7# )--,+)6 "7,+0- ",08),-8- Advertising ",08),"7- -06,808 387,0#8 6-,8+) 3,0"0,-"+ (arketing and selling 03,+"# -",#0) 3-,-)" 3,8)6 "+",8+" 4ut&ard freig!t and !andling )"0,+#+ "30,37# "3",+3- "-,#)3 -67,"-" Royalty and tec!nical services fee )67,#0# 3"#,3"# "##,6-# "-,+3# 6#-,++# 1epreciation ""8,0)) 0#,8+0 "7#,830 3,000 )63,76" 4t!er operating e9penses and income represent unallocated corporate e9penses and income. Segment assets consist primarily of property, plant and eKuipment, intangibles, stores and spares, stock in trade and trade and ot!er debts. Segment liabilities comprise operating liabilities and e9clude items suc! as ta9ation and corporate borro&ings. 4t!er segment items comprise directly attributable segment costs. 06
36." Staff costs C#s$ #/ Sa!es Dis$ri.u$i#n C#s$s Ad"inis$ra$i4e T#$a! E(penses 5++2 3##6 5++2 3##6 5++2 3##6 5++2 3##6 DRupees in t!ousandE Salaries and &ages 9;30+23 06",00+ ;+)0+;2 +0+,)78 :92011* )+",7)# )0*:30):2 ",+66,773 (edical 5)0))5 33,008 53: -) )202*; 3#,37" 3+055+ +),#"3 S!are based payments ,93- "08 ):05+1 8,7)) )10;5: "#,37" :50*;2 "7,)73 Pension costs > defined benefit plan 1059: -,07" )505+3 "+,+07 );0;:5 "8,-38 :90++1 )8,088 /ratuity costs > defined benefit plan 50)*+ )+- )90;33 "6,668 550:51 33,068 350+:: +#,8#" Pensioner:s medical plan 50*32 ),678 ;0;): -,78) 90+)9 8,+86 );0)92 "8,308 Provident fund cost > defined contribution plan ;019) -,77) 5;03*3 33,""# )101;1 "6,)37 ;)0:13 +-,+)3 91;0)93 6"#,)36 ;9;05:; -)),63+ 325055) +)7,-)+ )02;50*:+ ",08),-8- 59.5 <ease rentals amounting to Rs )77.-- million D3##6' Rs 3+#.83 millionE !ave been c!arged in operating cost for arrangements identified as operating leases upon application of ,%R,C + I N1etermining &!et!er an Arrangement contains a <easeM. T!ese arrangements include leases of property including offices, cold storage, depots and ot!er arrangements for use of plant and mac!inery &!ere fulfillment of t!e arrangement is dependent on t!e use of suc! assets and t!e arrangement conveys a rig!t to use t!e asset. 5++2 3##6 DRupees in t!ousandE 59.: Audi$#rsE re"unera$i#n Audit fee :0)++ ),### Ta9ation services 30+5* 3,773 <imited revie&, audit of consolidated financial statements, pension, provident and gratuity funds, t!ird party e9pense verifications and certifications for various government agencies 30;++ +,-8" 4ut of pocket e9penses :;+ )-" ))019* "#,73+ 52. OTHER OPERATING EKPENSES 1onations and Corporate Social Responsibility > note 38." :+0312 )",-") ;orkers: profits participation fund > note "+." );90+92 ")-,80" ;orkers: &elfare fund ;10*1+ -",6-0 53905** 3"7,")# 07
52.) D#na$i#ns and #rp#ra$e s#ia! resp#nsi.i!i$y 1onations include t!e follo&ing in &!om a director is interested' 5++2 3##6 DRupees in t!ousandE Na"e #/ Dire$#r,s- In$eres$ in D#nee Na"e and address #/ D#nee ". (r. =!san A. (alik 2oard (ember T!e ?idney Centre 50+*; )02++ "63@R, RafiKui S!a!eed Road, ?arac!i 3. (r. =!san A. (alik Trustee <a!ore University of 50;11 )0)** & Syed 2abar Ali J Pro>C!ancellor (anagement Sciences, 15A, <a!ore Corporate (ember ;orld ;ide %und for @ )05++ President>=meritus .ature %eroBepur Road, <a!ore ). Syed 2abar Ali J Trustee T!e <ayton )01++ )0*5+ Ra!matulla! 2enevolent Trust S>"0, P!ase ,, 15A, ?arac!i J Syed 2abar Ali &as a director till April "8, 3##8. 51. OTHER OPERATING INCOME In#"e /r#" in4es$"en$ in re!a$ed par$y 1ividend from %ute!ally C!emicals DPrivateE <imited )5 "3 Re$urn /r#" #$'er /inania! asse$s Return on savings accounts and term deposits > note 37." )0+*; "3,-6" In#"e /r#" n#n@/inania! asse$s Salvage sales 590:)5 +3,7") Profit on disposal of property, plant and eKuipment 5102+; "),)") Sundry 3+0)+: 8,-8+ O$'ers Service fee from related party > note 37.3 :90+3+ )#,"-) Reversal of impairment loss @ ))0 Reversal of provision for doubtful debts > trade @ ",-"- <iabilities no longer payable &ritten back )+30;2) 8","7" 5:101)2 "7#,-88 51.) (arkup on saving accounts &as earned at t!e rates ranging from -$ to 8.-$ per annum D3##6' #."$ to 8$E 51.5 T!is includes amount c!arged by t!e Company for certain management and ot!er services rendered to its related party > Unilever Pakistan %oods <imited, in accordance &it! t!e Service Agreement based on commercial terms bet&een t!e t&o companies. 6#
5++2 3##6 DRupees in t!ousandE :+. FINANCE COSTS In$eres$ #n !#an /r#" re!a$ed par$y ,nterest on s!ort term loan > note )#." )1039) > O$'ers (ark up on s!ort term borro&ings ):209+; 3),"+# 2ank c!arges :*092+ 3),"-3 =9c!ange loss 5;205+: --,0)6 %inance c!arge on finance leases )502)3 6,")8 4t!ers )1: "+" 33*0*1; "#7,3#8 3**0)** "#7,3#8 :+.) 1uring t!e year, t!e Company obtained an unsecured loan amounting to US1 "- million borro&ed from Unilever %inance ,nternational 2.*., Rotterdam, .et!erlands, an associated undertaking on (ay 36, 3##8, at a markup rate not e9ceeding si9 mont!s <,24R W "$ to meet &orking capital reKuirements. T!e loan &as repaid in US1 at t!e end of loan term on .ovember 3", 3##8. 5++2 3##6 DRupees in t!ousandE :). TAKATION Current > for t!e year 2;10++5 63+,#0# Pakistan 5+02*; "3,6)" ABad ?as!mir 29102*9 6)0,67" 1eferred ta9 c!arge *+0*+1 "#-,++7 13+039* 8+3,3+# :).) Re!a$i#ns'ip .e$=een $a( e(pense and a#un$in& pr#/i$ Accounting profit before ta9 5015302+5 3,-37,-78 Ta9 at t!e applicable ta9 rate of )-$ D3##6' )-$E )0+5:0*2) 88-,)-7 Ta9 effect on inadmissible e9penses and presumptive ta9 ,2:05+;- D+),""7E Ta9 e9pense for t!e year 13+039* 8+3,3+# 6"
:5. EARNINGS PER SHARE T!ere is no dilutive effect on t!e basic earnings per s!are of t!e Company, &!ic! is based on' 5++2 3##6 DRupees in t!ousandE Profit after ta9 )01230:5* ",086,)-8 Preference dividend on cumulative preference s!ares ,5:1- D3)7E Profit after ta9ation attributable to ordinary s!are!olders )01230+29 ",086,""7 ;eig!ted average number of s!ares in issue during t!e ):0513 "),37+ year Din t!ousandsE =arnings per s!are DRupeesE )31 "36 ::. PROPOSED AND DEC7ARED DI8IDENDS On #rdinary s'ares At t!e 2oard meeting on %ebruary 0, 3##7 a final dividend in respect of 3##8 of Rs -6 per s!are amounting to a total dividend of Rs 6-6.6- million is proposed D3##6' Rs 0) per s!are amounting to a total dividend of Rs 8)6.-" millionE. T!e interim dividend declared and already paid in respect of 3##8 &as Rs 00 per s!are amounting to a total dividend of Rs 866.+# million D3##6' Rs 0# per s!are amounting to a total dividend of Rs 676.0) millionE. On u"u!a$i4e pre/erene s'ares At t!e 2oard meeting on %ebruary 0, 3##7 dividend in respect of 3##8 of Rs 3)7 t!ousand !as been declared D3##6' Rs 3)7 t!ousandE. T!ese financial statements do not reflect t!e proposed final ordinary dividend and t!e dividend declared on cumulative preference s!ares as payable, &!ic! &ill be accounted for in t!e statement of c!anges in eKuity as an appropriation from t!e unappropriated profit in t!e year ending 1ecember )", 3##7. 63
:3. RE7ATED PARTY TRANSACTIONS T!e follo&ing transactions &ere carried out &it! related parties during t!e year' 5++2 3##6 DRupees in t!ousandE Relations!ip &it! t!e Company .ature of transactions i. Ultimate parent company Royalty and tec!nical services fee )0+)+09+1 6#-,++# ii. Associated companies Purc!ase of goods *05190:19 -,))#,+33 Purc!ase of services :+0+13 )),"3- Sale of goods 5;5 386 Reciprocal arrangements for s!aring of common costs )+05*: 7,6"8 Sale of services 220112 0#,#6- Purc!ase of fi9ed assets @ "7,8-+ Sale of fi9ed assets 90*93 +,""- S!ort term loan received )0+5:0+++ > S!ort term loan repaid )0+*50*++ > ,nterest on s!ort term loan )1039) > iii. T!ird parties &!ose manufacturing processes are dependent on Unilever Toll manufacturing 3:)0;5* )6",6+8 Purc!ase of operating assets )5;0193 > 1ividend income )5 "3 iv. Company in &!ic! close family member of a 1irector is !olding directors!ip Purc!ase of goods 993039: ",+#8,-08 v. Company in &!ic! close family member of a key management personnel !olds a key management position Purc!ase of services @ "7 vi. ?ey management personnel Salaries and ot!er s!ort>term employee benefits 9;0;); 00,)06 Post>employment benefits *0929 -,6-7 Consideration received for 99: > ve!icle sold vii. 4t!ers 1onations *0;*; -,680 Corporate & social responsibility )0)93 > Royalty and tec!nical services fee is paid at t!e rates ackno&ledged by t!e State 2ank of Pakistan. 4t!er transactions &it! related parties are carried out on commercial terms, at market prices and are settled in t!e ordinary course of business. T!e related party status of outstanding balances as at 1ecember )", 3##8 is included in trade debts, ot!er receivables and trade and ot!er payables respectively. Arrangements &it! parent company and an associated company for granting of t!eir s!ares to employees of Unilever Pakistan <imited are disclosed in note ")." and note 33.). 6)
:;. REMUNERATION OF DIRECTORS0 CHIEF EKECUTI8E AND EKECUTI8ES T!e aggregate amounts c!arged in t!e financial statements of t!e year for remuneration including all benefits to directors, c!ief e9ecutive and e9ecutives of t!e Company are as follo&s' =9ecutive 1irectors C!ief =9ecutive =9ecutives 5++2 3##6 5++2 3##6 5++2 3##6 DRupees in t!ousandE (anagerial remuneration and allo&ances 5:05:+ 3#,0-# )50352 "",0#- ::90*2: )3-,+"- S!are based compensation )+0)55 +,#80 )+0;;+ ",+#" ))0129 "),7#- Retirement benefits J :0)39 ",3"- )099: ",0-6 ;902*+ -6,-6- Rent and utilities :02;9 +,3#7 )035: ",)+# )+201*+ "#",3+" (edical e9penses 3*5 ")+ 5:3 )00 90+11 6,--+ 4t!er e9penses @ > )0355 ",)78 50332 -,0-# 3+02)2 )#,37+ 5902:+ "6,606 ;5*0+:9 -"",)+# .umber of persons 3 CC + ) " :++ 308 JJ 1uring t!e year, (r. ,mran 5usain and (s. S!aBia Syed &ere appointed as directors &it! effect from April ", 3##8 and April "7, 3##8 respectively in place of (r. Peter 5arvey and (r. Amar .aseer. T!e c!arge reflects t!e respective period of e9ecutive directors!ip !eld by t!em. ,n addition to t!is, a lump sum amount of Rs "-6.#0 million D3##6' Rs "+#."# millionE on account of variable pay !as been recognised in t!e financial statements for t!e current year payable in 3##7 after verification of target ac!ievement. 4ut of t!e variable pay recognised for 3##6 and 3##0 follo&ing payments &ere made' Paid in Paid in 5++2 3##6 re!a$in& $# relating to 5++9 3##0 DRupees in t!ousandE =9ecutive 1irectors 301+: +,37- C!ief =9ecutive 30))9 -,+80 =9ecutives 2+05)+ "#-,0+# 4t!er employees 5309+* )-,3"- )):01:* "-#,0)0 J Retirement benefits represent amount contributed to&ards various retirement benefit plans. T!e e9ecutive directors, c!ief e9ecutive and certain e9ecutives of t!e Company are provided &it! free use of cars and !ouse!old eKuipment. 6+
Aggregate amount c!arged in t!ese financial statements for t!e year for fee to - non> e9ecutive directors &as Rs "0- t!ousand D3##6' 0 non>e9ecutive directors Rs 3-- t!ousandE. Aggregate amount c!arged in t!ese financial statements for t!e year for remuneration of directors is Rs +#.78 million D3##6' Rs )#.-- millionE. :*. CAPACITY Annua! Capai$y A$ua! Pr#du$i#n 5++2 3##6 5++2 3##6 (etric Tons O=n "anu/a$ure 5ome and Personal Care ;9093) -6,7") 350)9; +",+70 2everages ;+0+++ 68,333 :*0*29 )6,860 (illion <itres ,ce Cream 99 :1 07 )+ Annual capacity of 2everages &as reduced due to s!ut do&n of t!e ?arac!i Tea %actory. T!e current capacity &as still under utilised as t!e production &as )0.07 metric tons on account of lo&er demand. ;!ereas t!e production capacity of ,ce Cream %actory &as increased due to anticipated !ig!er sales in t!e subseKuent years. Actual production &as )7 million litres only due to lo&er demand. :9. FINANCIA7 INSTRUMENTS Finania! asse$s and !ia.i!i$ies% I n $e r e s$ I M a r < u p . ea r in & N# n @ in $ e r es $ I N# n @ "a r < u p . e a r in & TO T A7 M a $u r i $ y u p M a $u r i $ y Su . @ $ # $ a ! M a$ u r i $y u p Ma $ u r i$ y S u . @ $# $ a ! $ # # n e y ea r a / $ er # n e y e a r $ # # n e ye a r a/ $ e r # n e y ea r DR u p e e s in t! o u s a n d E FINANCIA7 ASSETS ,nvestments > > > > 7-,3#3 7-,3#3 7-,3#3 <oans and advances to employees > > > -6,"3" "3#,-+- "66,000 "66,000 1eposits > > > ")#,8#8 +,+8# ")-,388 ")-,388 Trade debts > > > 338,60) > 338,60) 338,60) 4t!er receivables > > > "03,6-8 > "03,6-8 "03,6-8 Cas! and bank balances > > > "#0,687 > "#0,687 "#0,687 > > > *2*05:1 55+0559 1+*03** 1+*03** 1ecember )", 3##6 "06,373 > "06,373 -6+,7)6 3"-,)+# 67#,366 7-6,-07 FINANCIA7 7IABI7ITIES Trade and ot!er payables > > > +,"8-,"0) > +,"8-,"0) +,"8-,"0) Accrued interest @ mark up > > > 0+,#6- > 0+,#6- 0+,#6- <iabilities against assets subRect to finance leases )3,)33 66,)36 "#7,0+7 > > > "#7,0+7 S!ort term borro&ings ),3)3,-3) > ),3)3,-3) > > > ),3)3,-3) :05*3023; 990:59 :0:350)95 3053105:2 > 3053105:2 90;1)03)+ 1ecember )", 3##6 ++#,8)# -3,7)3 +7),603 +,-##,6-+ > +,-##,6-+ +,77+,-"0 OFF BA7ANCE SHEET ITEMS %inancial Commitments' 4pen letters of credit @ guarantee > > > ",#37,706 > ",#37,706 ",#37,706 > > > )0+5101*9 > )0+5101*9 )0+5101*9 1ecember )", 3##6 > > > ",")#,### > ",")#,### ",")#,### T!e effective interest @ mark up rates for t!e monetary financial assets and liabilities are mentioned in respective notes to t!e financial statements. 6-
Finania! ris< "ana&e"en$ #.Ge$i4es and p#!iies Capi$a! Ris< Mana&e"en$ T!e Company:s obRectives &!en managing capital are to safeguard t!e Company:s ability to continue as a going concern in order to provide returns for s!are!olders and benefit for ot!er stake!olders and to maintain an optimal capital structure to reduce t!e cost of capital. 1uring 3##8 t!e Company:s strategy &as to maintain leveraged gearing. T!e gearing ratios as at 1ecember )", 3##8 and 3##6 &ere as follo&s' 5++2 3##6 DRupees in t!ousandE Total borro&ings :0:350)95 +7),603 Cas! and bank ,)+*0921- D"88,083E .et debt :05:;0:2: )#-,#8# Total eKuity 505);09;2 ",767,836 Gearin& ra$i# ;1B ")$ T!e Company finances its operations t!roug! eKuity, borro&ings and management of &orking capital &it! a vie& to maintaining an appropriate mi9 bet&een various sources of finance. ,n addition t!e Company !as been investing !eavily in capital e9penditure &!ic! !as been financed t!roug! debt. i. In$eres$ I "ar< up ra$e ris< T!e Company:s income and operating cas! flo&s are substantially independent of c!anges in market interest rates. T!e Company !as no significant interest bearing assets. Company:s liabilities against finance leases and s!ort term borro&ings are at fi9ed @ variable rates. ii. C#nen$ra$i#n #/ redi$ ris< Credit risk represents t!e accounting loss t!at &ould be recognised at t!e reporting date if counter parties failed to perform as contracted. 4ut of t!e total financial assets of Rs 7#0 million D3##6' Rs 7-8 millionE, t!e financial assets t!at are subRect to credit risk amounted to Rs 337 million D3##6' Rs 3)7 millionE. T!e Company believes t!at it is not e9posed to maRor concentration of credit risk. To manage e9posure to credit risk, t!e Company applies credit limits to t!eir customers. iii. 7iAuidi$y ris< Prudent liKuidity risk management implies maintaining sufficient cas! and marketable 60
securities and t!e availability of funding t!roug! an adeKuate amount of committed credit facilities. Company treasury aims at maintaining fle9ibility in funding by keeping committed credit lines available. i4. F#rei&n e('an&e ris< "ana&e"en$ %oreign currency risk arises mainly &!ere payables e9ist due to t!e transactions &it! foreign undertakings, specially associated companies. Payables are e9posed to foreign currency risks as currently t!ere is no instrument available in t!e market to !edge t!e foreign currency e9posure. 4. Fair 4a!ues #/ /inania! asse$s and !ia.i!i$ies T!e maRor portion of t!e Company:s financial instruments is of a s!ort term nature and &ould be settled in t!e near future. T!e carrying values of all financial assets and liabilities reflected in t!e financial statements appro9imate t!eir fair values. %air value is determined on t!e basis of obRective evidence at eac! reporting date. 5++2 3##6 DRupees in t!ousandE :2. CASH AND CASH EFUI8A7ENTS Cas! and bank balances )+*0921 "88,083 S!ort term borro&ings > s!ort term running finance ,:05:50;5:- D+3),--6E ,:0)5;09:3- D3)+,86-E 66
:1. DETAI7S OF PROPERTY0 P7ANT AND EFUIPMENT DISPOSA7S T!e details of property, plant and eKuipment disposed during t!e year are given belo&' C#s$ Au"u!a$ed B##< 8a!ue Sa!e M#de #/ Par$iu!ars #/ Pur'aser Depreia$i#n I Pr#eeds Disp#sa! I"pair"en$ DRupees in t!ousandE Plant and (ac!inery 8,+-) ),7++ +,-#7 6,06+ .egotiation PT Unilever ,ndonesia, Tbk /ra!a Unilever, C.,.Cend, /atot Subroto ?av. "-, Cakarta ,ndonesia 6-,"-" 07,"#0 0,#+- +7# 4pen 2idding ,mran Akk!tar ?abaria, ?ot Abdul (alik, <a!ore Road, S!eik!upura "#,"+# 7,-)) 0#6 06- P (a!boob 2rot!ers, 4pp. T!ana .a&a ?ot, (ain 1!olan&al 2aBar, .ear Qateem ?!ana, <a!ore +,7#0 +,++0 +0# )"6 P P ),83# ),+80 ))+ 37+ P (r %aBal ?!an C@o (@S Aadir ?!an, 4ld (ac!inery & Scrap 1ealer, <ocated at Plot O 2>30, Street O3, Sector .o.", 5aidery (arket, ?!yban>e>Sir Syed, Ra&alpindi ),+)6 3,863 -0- "08 P .aeem A!mad, =agel Pak 4verseas (otor, 5ouse O 2@)7), As!raf .agar, .ear Re!mania (asRid, Papos! .agar, ?arac!i ),)"- 3,)77 7"0 "0) P P 3,783 3,8+# "+3 "70 P (a!boob 2rot!ers, 4pp. T!ana .a&a ?ot, (ain 1!olan&al 2aBar, .ear Qateem ?!ana, <a!ore 3,+77 3,)#+ "7- "73 P (r %aBal ?!an C@o (@S Aadir ?!an, 4ld (ac!inery & Scrap 1ealer, <ocated at Plot O 2>30, Street O3, Sector .o.", 5aidery (arket, ?!yban>e>Sir Syed, Ra&alpindi 3,)83 3,#36 )-- "") P .aeem A!mad, =agel Pak 4verseas (otor, 5ouse O 2@)7), As!raf .agar, .ear Re!mania (asRid, Papos! .agar, ?arac!i balance carried forward ""6,#8- "#3,7-6 "+,"38 "#,383 68
3+. MONOPO7Y CONTRO7 AUTHORITY ORDER ;it! respect to t!e (onopoly Control Aut!ority 4rder dated 1ecember "7, 3##0, terminating t!e non>competition agreement and reKuiring t!e Company to refund t!e amount of Rs 3-# million to 1alda %oods DPrivateE <imited D1%<E &it!in fifteen days of receipt of t!e 4rder, as disclosed in t!e previous annual financial statements, t!e management, based on legal advice, is of t!e vie& t!at t!e agreement bet&een t!e Company and 1%< is not in t!e violation of t!e (onopolies and Restrictive Trade Practices 4rdinance "76#. T!e Company filed an appeal in t!e 5ig! Court against t!e 4rder &!ic! &as admitted and t!e operation of (CA:s order &as stayed. At present, t!e appeal is pending for !earing. 3). CORRESPONDING FIGURES 3).) Prior year:s figures !ave been reclassified for t!e purpose of better presentation and comparison. C!anges made during t!e year are as follo&s' Re!assi/ia$i#n Re!assi/ia$i#n $# A"#un$ /r#" #"p#nen$ #"p#nen$ ,Rupees in $'#usand- Stores and Spares Capital &ork in progress "6,#6) 2ills payable Accrued liabilities +#8,)"6 Creditors Accrued liabilities ""6,38) Audi$#rsE re"unera$i#n and pr#4isi#n /#r d#u.$/u! de.$s @ $rade and #$'ers /r#" #$'er #pera$in& e(penses $# ad"inis$ra$i4e e(penses Auditors: remuneration Auditors: remuneration "#,73+ Provision for doubtful debts Provision for doubtful debts > trade and ot!ers > trade and ot!ers ),8#) 35. DATE OF AUTHORISATION T!ese financial statements &ere aut!orised for issue on %ebruary 0, 3##7 by t!e 2oard of 1irectors of t!e Company. E'san A. Ma!i< I"ran Husain C!airman & C!ief =9ecutive 1irector 8#
Consolidated Statements %inancial Unilever Pakistan <imited and its subsidiary companies 8"
Auditors Report to t!e (embers ;e !ave audited t!e anne9ed consolidated financial statements comprising consolidated 2alance S!eet of Uni!e4er Pa<is$an 7i"i$ed ,$'e H#!din& C#"pany- and i$s su.sidiary #"panies 7e4er C'e"ia! ,Pri4a$e- 7i"i$ed0 7e4ers Ass#ia$ed Pa<is$an Trus$ ,Pri4a$e- 7i"i$ed and SadiA ,Pri4a$e- 7i"i$ed as at 1ecember )", 3##8 and t!eir related consolidated Profit and <oss Account, consolidated Cas! %lo& Statement and consolidated Statement of C!anges in =Kuity toget!er &it! t!e notes forming part t!ereof, for t!e year t!en ended. ;e !ave also e9pressed separate opinions on t!e financial statements of Unilever Pakistan <imited and its subsidiary companies. T!ese financial statements are t!e responsibility of t!e 5olding Companys management. 4ur responsibility is to e9press an opinion on t!ese financial statements based on our audit. 4ur audit &as conducted in accordance &it! t!e ,nternational Standards on Auditing and accordingly included suc! tests of accounting records and suc! ot!er auditing procedures as &e considered necessary in t!e circumstances. ,n our opinion t!e consolidated financial statements present fairly t!e financial position of Unilever Pakistan <imited and its subsidiary companies as at 1ecember )", 3##8 and t!e results of t!eir operations for t!e year t!en ended. A. F. Fer&us#n > C#. C!artered Accountants ?arac!i %ebruary 0, 3##7 8)
Consolidated 2alance S!eet as at 1ecember )", 3##8 .ote 5++2 3##6 DRupees in t!ousandE ASSETS .on>current assets Property, plant and eKuipment ) 303520592 ),-)#,-63 ,ntangibles + 90:+: "3,"6) <ong term investments - 5++ 3## <ong term loans 0 )5+0;3; ""-,)88 <ong term deposits and prepayments 6 ;3+0+59 +,73# Retirement benefits > prepayments 8 5+;0:;; 3-#,868 ;0:+)09+2 ),7"+,")" Current assets Stores and spares 7 5:)0219 "0),383 Stock in trade "# 305*)099+ 3,630,#0+ Trade debts "" 55209*: 3)7,)") <oans and advances "3 )5:01+3 "33,888 Accrued interest @ mark up :0293 ),-"# Trade deposits and s!ort term prepayments ") ;)*033: 3)0,#0+ 4t!er receivables "+ 5)205;2 3+7,")7 Ta9 refunds due from /overnment "- :+)02): "+8,+70 Cas! and bank balances "0 5:+0++1 )#-,##3 *0))*09:) +,"7),6-8 Total assets ))03)203:1 8,"#6,887 8+
.ote 5++2 3##6 DRupees in t!ousandE EFUITY AND 7IABI7ITIES Capital and reserves S!are capital "6 **10399 007,+66 Reserves "8 )0;9;0*3: ",))",0+3 5053;0)5+ 3,##",""7 Surplus on revaluation of fi9ed assets "7 ):0*): "+,30" <,A2,<,T,=S .on>current liabilities <iabilities against assets subRect to finance leases 3# 990:59 -3,7)3 1eferred ta9ation 3" :*10*;: )#7,#++ Retirement benefits obligations 8 5:10913 "+#,+0) *2*0993 -#3,+)7 Current liabilities Trade and ot!er payables 33 30;3103:3 +,6-3,#38 Ta9ation > provisions less payments )0+)1 33,-"0 Accrued interest @ mark up *30+9; ),007 Current maturity of liabilities against assets subRect to finance leases 3# :50:55 "6,36) S!ort term borro&ings 3) :05:50;5: +3),--6 Provisions 3+ ;1:0;;1 )6",#36 2039501:5 -,-7#,#6# Total liabilities 10);109+* 0,#73,-#7 Contingency & commitments 3- Total eKuity and liabilities ))03)203:1 8,"#6,887 T!e anne9ed notes " to +3 form an integral part of t!ese financial statements. E'san A. Ma!i< I"ran Husain C!airman & C!ief =9ecutive 1irector 8-
Consolidated Profit and <oss Account for t!e year ended 1ecember )", 3##8 .ote 5++2 3##6 DRupees in t!ousandE Sales 30 :+01;*02:1 3),))",000 E Cost of sales 36 ,5+0+5)0);1- D"+,3+8,-8"E /ross profit )+01:;0*2+ 7,#8),#8- E 1istribution costs 36 ,;02:90;25- D-,#3","66E Administrative e9penses 36 ,)05))0532- D",#33,7)-E 4t!er operating e9penses 38 ,53905**- D3"7,")#E 4t!er operating income 37 5;:0+91 3#0,3)- E :02150**: ),#30,#68 Restructuring cost ,321052+- D)63,3)+E Profit from operations :03+:0:2: 3,0-),8++ E %inance costs )# ,3**0)**- D"#7,336E Profit before ta9ation 501:905)9 3,-++,0"6 E Ta9ation )" ,133025)- D8+0,#78E Profit after ta9ation )01150:1* ",078,-"7 E =arnings per s!are DRupeesE )3 );+ "38 T!e anne9ed notes " to +3 form an integral part of t!ese financial statements. E'san A. Ma!i< I"ran Husain C!airman & C!ief =9ecutive 1irector 80
Consolidated Cas! %lo& Statement for t!e year ended 1ecember )", 3##8 .ote 5++2 3##6 DRupees in t!ousandE CASH F7OWS FROM OPERATING ACTI8ITIES Cas! receipts from customers :90;31025; 38,"07,+"6 E Cas! paid to suppliers @ service providers and employees ,5*09520++*- D"8,#-#,-#6E Payment of indirect ta9es and ot!er statutory duties ,903590*;:- D-,788,086E Payment of royalty and tec!nical services fee ,12+0)*3- D6#0,8#0E %inance costs paid ,3+;09*+- D"#6,+-0E ,ncome ta9 paid ,)0+9+032:- D8+",3"7E Retirement benefits obligations DnetE ,:+301)2- D63,6+6E <ong term loans DnetE ,;0);9- D"8,76"E <ong term deposits and prepayments DnetE ,;:;0)+9- 3#,+)6 E .et cas! from operating activities 150;99 3,+#),+0" E CASH F7OWS FROM IN8ESTING ACTI8ITIES Purc!ase of property, plant and eKuipment ,)0:*10:22- D",6"),880E Sale proceeds of property, plant and eKuipment on disposal )5+0*:+ +",8#0 E Return received on savings accounts, term deposits and balance receivable from provident fund ):02*5 38,#6+ E 1ividend received )5 "3 E .et cas! used in investing activities ,)05:30223- D",0+),77+E CASH F7OWS FROM FINANCING ACTI8ITIES <iabilities against assets subRect to finance leases DnetE ,::0:9+- D3+,#8-E 1ividends paid ,)09+20525- D",-+0,##6E .et cas! used in financing activities ,)093)0*;5- D",-6#,#73E .et decrease in cas! and cas! eKuivalents ,5022:01;1- D8"#,03-E Cas! and cas! eKuivalents at t!e beginning of t!e year )8 ,))20;;;- 073,#6# E Cas! and cas! eKuivalents at t!e end of t!e year )8 ,:0++50;)3- D""8,---E T!e anne9ed notes " to +3 form an integral part of t!ese financial statements. E'san A. Ma!i< I"ran Husain C!airman & C!ief =9ecutive 1irector 86
Consolidated Statement of C!anges in =Kuity for t!e year ended 1ecember )", 3##8 SHARE R E S E R 8 E S TOTA7 CAPITA7 CAPITA7 RE8ENUE SUB TOTA7 Arisin& C#n$in&eny O$'er Unappr#pria$ed under pr#/i$ s'e"es #/ arran&e"en$s /#r a"a!&a"a$i#ns D Rupees in t!ousand E 2alance as at Canuary ", 3##6 007,+66 6#,737 )3",+6" "0,0"- 60",8#" ","6#,8"0 ",8+#,37) .et profit for t!e year > > > > ",078,-"7 ",078,-"7 ",078,-"7 Transferred from surplus on revaluation of fi9ed assets > net of deferred ta9ation' > incremental depreciation for t!e year > > > > 0+8 0+8 0+8 Transferred from unappropriated profit to contingency reserve > note 3-." > > +",0)- > D+",0)-E > > =mployee benefits cost under ,%RS 3 > PS!are>based PaymentP > > > "7,)73 > "7,)73 "7,)73 Utilisation of s!are based payment reserve > > > D3,""3E > D3,""3E D3,""3E 1ividends %or t!e year ended 1ecember )", 3##0 > 4n cumulative preference s!ares > > > > D3)7E D3)7E D3)7E > %inal dividend on ordinary s!ares T Rs -6 per s!are > > > > D6-6,6-#E D6-6,6-#E D6-6,6-#E %or t!e year ended 1ecember )", 3##6 > ,nterim dividend on ordinary s!ares T Rs 0# per s!are > > > > D676,0)3E D676,0)3E D676,0)3E 2alance as at 1ecember )", 3##6 007,+66 6#,737 )0),"#0 )),87- 80),6"3 ",))",0+3 3,##",""7 .et profit for t!e year > > > > ",773,)70 ",773,)70 ",773,)70 Transferred from surplus on revaluation of fi9ed assets > net of deferred ta9ation' > incremental depreciation for t!e year > > > > 0+8 0+8 0+8 Transferred from contingency reserve to unappropriated profit > note 3-." > > D+",0)-E > +",0)- > > Reclassification of S!are>based Payment as liability > note 33.) > > > D)),87-E > D)),87-E D)),87-E 1ividends %or t!e year ended 1ecember )", 3##6 > 4n cumulative preference s!ares > > > > D3)7E D3)7E D3)7E > %inal dividend on ordinary s!ares T Rs 0) per s!are > > > > D8)6,-"+E D8)6,-"+E D8)6,-"+E %or t!e year ended 1ecember )", 3##8 > ,nterim dividend on ordinary s!ares T Rs 00 per s!are > > > > D866,)7-E D866,)7-E D866,)7-E Ba!ane as a$ Dee".er :)0 5++2 **10399 9+0151 :5)039) @ )0)2:053: )0;9;0*3: 5053;0)5+ T!e anne9ed notes " to +3 form an integral part of t!ese financial statements. E'san A. Ma!i< I"ran Husain C!airman & C!ief =9ecutive 1irector 88
.otes to and %orming Part of t!e Consolidated %inancial Statements for t!e year ended 1ecember )", 3##8 ). THE GROUP AND ITS OPERATIONS ).) T'e Gr#up #nsis$s #/% Unilever Pakistan <imited Dt!e NCompanyME <ever C!emicals DPrivateE <imited <evers Associated Pakistan Trust DPrivateE <imited SadiK DPrivateE <imited <ever C!emicals DPrivateE <imited, <evers Associated Pakistan Trust DPrivateE <imited and SadiK DPrivateE <imited are &!olly o&ned subsidiaries of Unilever Pakistan <imited. T!e parent company of t!e /roup is Unilever 4verseas 5oldings <imited, U? &!ereas its ultimate parent company is Unilever P<C, U?. Unilever Pakistan <imited is a limited liability company incorporated in Pakistan and is listed on t!e ?arac!i, <a!ore and ,slamabad Stock =9c!anges. ,t manufactures and markets !ome and personal care products, beverages, ice cream and spreads. <ever C!emicals DPrivateE <imited used to manufacture and sell Sulp!onic Acid. <evers Associated Pakistan Trust DPrivateE <imited and SadiK DPrivateE <imited act as trustees of Union Pakistan Provident %und DUnilever Provident %undE. All subsidiary companies are incorporated in Pakistan. <ever C!emicals DPrivateE <imited D<C<E is not carrying out any business operations. T!e /roup is a subsidiary of Unilever 4verseas 5oldings <imited, U?, &!ereas its ultimate parent company is Unilever P<C, U?. ).5 Basis #/ #ns#!ida$i#n T!e consolidated financial statements include t!e financial statements of Unilever Pakistan <imited, <ever C!emicals DPrivateE <imited, <evers Associated Pakistan Trust DPrivateE <imited and SadiK DPrivateE <imited. T!e financial statements of t!e subsidiary companies !ave been consolidated on a line by line basis. All intercompany balances and transactions !ave been eliminated. 5. SIGNIFICANT ACCOUNTING PO7ICIES T!e accounting policies adopted are essentially t!e same as t!ose &!ic! applied for t!e previous financial year. 5.) Basis #/ prepara$i#n S$a$e"en$ #/ #"p!iane T!ese financial statements !ave been prepared in accordance &it! approved accounting standards as applicable in Pakistan. Approved accounting standards comprise of suc! ,nternational %inancial Reporting Standards D,%RSE issued by t!e ,nternational Accounting Standards 2oard as are notified under t!e Companies 4rdinance, "78+, provisions of and directives issued under t!e Companies 4rdinance, "78+. ,n case reKuirements differ, t!e provisions or directives of t!e Companies 4rdinance, "78+ s!all prevail. Cri$ia! a#un$in& es$i"a$es and Gud&e"en$s T!e preparation of financial statements in conformity &it! approved accounting standards reKuires t!e use of certain critical accounting estimates. ,t also reKuires management to e9ercise its Rudgement in t!e process of applying t!e /roup:s accounting policies. T!e matters involving a !ig!er degree of Rudgement or comple9ity, or areas &!ere assumptions and estimates are significant to t!e financial statements are as follo&s' 87
i. Ta(a$i#n T!e /roup recognises liabilities for anticipated ta9 audit issues based on estimates of &!et!er additional ta9es &ill be due. ;!ere t!e final ta9 outcome of t!ese matters is different from t!e amounts t!at &ere initially recorded, suc! differences &ill impact t!e income ta9 provisions and deferred ta9 in t!e period in &!ic! suc! determination is made. ii. P#s$ e"p!#y"en$ .ene/i$s Significant estimates relating to post employment benefits are disclosed in note 8. iii. Pr#4isi#ns Provisions are considered, among ot!ers, for legal matters, disputed indirect ta9es, employee termination cost and restructuring &!ere a legal or constructive obligation e9ist at t!e balance s!eet date and reliable estimate can be made of t!e likely outcome. T!e nature of t!ese cost is suc! t!at Rudgement !as to be applied to estimate t!e timing and amount of cas! flo&s. =stimates and Rudgements are continually evaluated and are based on !istorical e9perience and ot!er factors, including e9pectations of future events t!at are believed to be reasonable under t!e circumstances. T!ere !ave been no critical Rudgments made by t!e /roup:s management in applying t!e accounting policies t!at &ould !ave t!e most significant effect on t!e amounts recognised in t!e financial statements. Recent accounting developments > .e& standard, amendments to publis!ed standard and ne& interpretation effective in 3##8 > relevant ,slamic %inancial Accounting Standard 3 > S,Rara! is mandatory for t!e /roups accounting periods beginning on or after Culy ", 3##6 for t!ose ,Rara! agreements &!ic! commenced on or after t!is date. 1uring t!e year, t!e /roup !ad entered into a sale and leaseback D,Rara!E transaction &!ic! reKuires t!e recognition of SuRra! payments Dlease rentalsE against iRara! financing as an e9pense in t!e profit and loss account on a straig!t line basis over t!e iRara! term. T!e sale price and t!e fair value of t!e assets appro9imate t!eir book value, !ence no profit or loss arose as a result of t!is transaction. > Amendments to publis!ed standards, ne& standard and ne& interpretations effective in 3##8 but not relevant T!ere are ot!er accounting standard, ne& interpretations t!at are mandatory for accounting periods beginning on or after Canuary ", 3##8 but are considered not to be relevant or !ave any significant effect to t!e /roup:s operations and are t!erefore not detailed in t!ese financial statements. 7#
> Amendments to publis!ed standards, ne& standards and interpretations not yet effective but relevant %ollo&ing amendment to e9isting approved accounting standards !ave been publis!ed t!at are mandatory for t!e /roups accounting periods beginning on t!e dates mentioned belo&' DiE ,AS " :Presentation of financial statements:, issued in September 3##6 revises t!e e9isting ,AS " and reKuires apart from c!anging t!e names of certain components of financial statements, presentation of transactions &it! o&ners in statement of c!anges in eKuity and &it! non>o&ners in t!e Compre!ensive ,ncome statement. T!e revised standard &ill be effective from Canuary ", 3##7. Adoption of t!is standard &ill only impact t!e presentation of t!e financial statements. DiiE ,AS 3) DAmendmentE :2orro&ing costs: Deffective from Canuary ", 3##7E. ,t reKuires an entity to capitalise borro&ing costs directly attributable to t!e acKuisition, construction or production of a Kualifying asset Done t!at takes a substantial period of time to get ready for use or saleE as part of t!e cost of t!at asset. T!e option of immediately e9pensing borro&ing costs !as been removed. (oreover, t!e definition of borro&ing costs !as been amended so t!at interest e9pense is calculated using t!e effective interest met!od defined in ,AS )7 :%inancial instruments' Recognition and measurement:. T!e management !as assessed t!at t!e c!ange in interest calculation met!od &ould not !ave a material impact on t!e /roups financial . statements DiiiE ,%RS 8 :4perating segments: Deffective from Canuary ", 3##7E. ,%RS 8 replaces ,AS "+. T!e ne& standard reKuires a :management approac!:, under &!ic! segment information is presented on t!e same basis as t!at used for internal reporting purposes. T!e management is revie&ing t!e implications on t!e /roups financial statements presentation. DivE ,%R,C ") :Customer loyalty programmes: Deffective from Culy ", 3##8E. ,%R,C ") clarifies t!at &!ere goods or services are sold toget!er &it! a customer loyalty incentive Dfor e9ample, loyalty points or free productsE, t!e arrangement is a multiple>element arrangement and t!e consideration receivable from t!e customer is allocated bet&een t!e components of t!e arrangement using fair values. T!ere &ill be no significant impact on its implementation. 5.5 O4era!! 4a!ua$i#n p#!iy T!ese financial statements !ave been prepared under t!e !istorical cost convention e9cept as disclosed in t!e accounting policies belo&. 5.: Pr#per$y0 p!an$ and eAuip"en$ Property, plant and eKuipment is stated at cost less depreciation and impairment e9cept capital &ork in progress &!ic! is stated at cost. 1epreciation is calculated using t!e straig!t>line met!od on all assets in use at t!e beginning of eac! Kuarter to c!arge off t!eir cost e9cluding residual value, if not insignificant, over t!eir estimated useful lives. Certain land, buildings and plant and mac!inery &ere revalued in "76), "76-, "768 and "78" by independent valuers, &!ic! are s!o&n at suc! revalued figures. ,n compliance &it! t!e revised ,nternational Accounting Standard .o. "0, PProperty, Plant and =KuipmentP, t!e /roup adopted cost model for its property, plant and eKuipment and t!e revalued figures treated as deemed costs. T!e surplus on revaluation of t!ese assets, !o&ever, is recognised in accordance &it! section 3)- of t!e Companies 4rdinance, "78+. 7"
/roup accounts for impairment, &!ere indication e9ists, by reducing its carrying value to t!e assessed recoverable amount. (aintenance and normal repairs are c!arged to income as and &!en incurredL also individual assets costing up to Rs "#,### are c!arged to income. (aRor rene&als and improvements are capitalised and assets so replaced, if any, are retired. /ains and losses on disposal of property, plant and eKuipment are recognised in t!e profit and loss account. 5.3 In$an&i.!es ,ntangibles are stated at cost less amortisation. (aRor computer soft&are licences are capitalised on t!e basis of costs incurred to acKuire and bring to use t!e specific soft&are. T!ese costs are amortised over t!eir estimated useful life of five years using t!e straig!t>line met!od. Costs associated &it! maintaining computer soft&are programmes are recognised as an e9pense as incurred. 5.; In4es$"en$s ,n unlisted entity not being subsidiary T!ese are valued at cost and are classified under investment available>for>sale. 5.* Ta(a$i#n i. Current T!e provision for current ta9ation is based on ta9able income at t!e current rates of ta9ation. ii. 1eferred 1eferred income ta9 is provided in full, using t!e liability met!od, on temporary differences arising bet&een t!e ta9 base of assets and liabilities and t!eir carrying amounts in t!e financial statements. 1eferred income ta9 is determined using ta9 rates t!at !ave been enacted or substantially enacted by t!e balance s!eet date and are e9pected to apply &!en t!e related deferred income ta9 asset is realised or t!e deferred income ta9 liability is settled. 1eferred ta9 assets are recognised to t!e e9tent t!at it is probable t!at future ta9able profit &ill be available against &!ic! t!e temporary differences can be utilised. 5.9 Re$ire"en$ .ene/i$s T!e c!arge is based on actuarial valuations t!at are conducted annually. Actuarial gains and losses arising from e9perience adRustments and c!anges in actuarial assumptions are c!arged or credited to income over t!e employees e9pected average remaining &orking lives. 5.2 S$#res and spares T!ese are valued at average cost and provision is made for slo& moving and obsolete stores and spares. ,tems in transit are valued at cost comprising invoice values plus ot!er c!arges incurred t!ereon. 5.1 S$#< in $rade All stocks are stated at t!e lo&er of cost and estimated net realisable value. Cost is determined using t!e &eig!ted average met!od e9cept for t!ose in transit &!ere it represents invoice value and ot!er c!arges paid t!ereon. Cost of &ork in process includes direct cost of materials
&!ereas t!at of finis!ed goods also includes direct cost of labour and production over!eads. .et realisable value is t!e estimated selling price in t!e ordinary course of business less cost necessarily to be incurred in order to make t!e sale. 2y>product DglycerineE is valued at estimated cost e9cept for t!e stock covered by a firm for&ard sale contract, &!ic! is valued at t!e contracted price. 5.)+ Trade and #$'er de.$s Trade and ot!er debts are recognised at fair value of consideration receivable. 1ebts considered irrecoverable are &ritten off and provision is made against t!ose considered doubtful of recovery. 5.)) Cas' and as' eAui4a!en$s Cas! and cas! eKuivalents are carried in t!e balance s!eet at cost. %or t!e purposes of t!e cas! flo& statement, cas! and cas! eKuivalents comprise cas! in !and, &it! banks on current and savings accounts, term deposits &it! maturities of t!ree mont!s or less and s!ort term finances. 5.)5 7eases i. %inance leases <eases t!at transfer substantially all t!e risks and re&ards incidental to o&ners!ip of an asset are classified as finance leases. Assets on finance lease are capitalised at t!e commencement of t!e lease term at t!e lo&er of t!e fair value of leased assets and t!e present value of minimum lease payments, eac! determined at t!e inception of t!e lease. =ac! lease payment is allocated bet&een t!e liability and finance cost so as to ac!ieve a constant rate on t!e finance balance outstanding. T!e finance cost is c!arged to profit and loss account and is included under finance costs. ii. 4perating leases <eases in &!ic! a significant portion of t!e risks and re&ards of o&ners!ip are retained by t!e lessor are classified as operating leases. Payments made under operating leases are c!arged to profit and loss on a straig!t>line basis over t!e period of t!e lease. 5.): Trade and #$'er paya.!es <iabilities for trade and ot!er amounts payable are carried at cost &!ic! is t!e fair value of t!e consideration to be paid in future for goods and services. 5.)3 B#rr#=in&s and $'eir #s$ 2orro&ings are recorded at t!e proceeds received. 2orro&ing costs are recognised as an e9pense in t!e period in &!ic! t!ese are incurred e9cept to t!e e9tent of borro&ing costs t!at are directly attributable to t!e acKuisition, construction or production of a Kualifying asset. Suc! borro&ing costs, if any, are capitalised as part of t!e cost of t!at asset. 5.); Pr#4isi#ns Provisions are recognised &!en t!e /roup !as a present legal or constructive obligation as a result of past events, it is probable t!at an outflo& of resources &ill be reKuired to settle t!e obligation, and a reliable estimate of t!e amount can be made. Restructuring cost provisions comprise staff redundancy payments, relocation and dismantling
of factory, and are recognised in t!e period in &!ic! t!e /roup becomes legally or constructively committed to incur. 5.)* Finania! ins$ru"en$s %inancial instruments include investments, loans and advances, trade and ot!er debts, accrued interest @ mark up and cas! and bank balances, borro&ings, liabilities against assets subRect to finance leases and trade and ot!er payables. T!e particular recognition met!ods adopted are disclosed in t!e individual policy statements associated &it! eac! item. 5.)9 F#rei&n urreny $ransa$i#ns and $rans!a$i#n %oreign currency transactions are translated into Pak Rupees using t!e e9c!ange rates prevailing at t!e dates of t!e transactions. All monetary assets and liabilities in foreign currencies are translated into Pak Rupees at t!e rates of e9c!ange prevailing at t!e balance s!eet date. %oreign e9c!ange gains and losses on translation are recognised in t!e profit and loss account. T!e financial statements are presented in Pak Rupees, &!ic! is t!e /roups functional and presentation currency. 5.)2 Re4enue re#&ni$i#n Revenue comprises t!e fair value of t!e consideration received or receivable for t!e sale of goods and services in t!e ordinary course of t!e /roups activities. T!e /roup recognises revenue &!en t!e amount of revenue can be reliably measured, it is probable t!at future economic benefits &ill flo& to t!e /roup and specific criteria !as been met for eac! of t!e /roups activities as described belo&' i. Sale of goods Revenue from sale of goods is recognised on dispatc! of goods to customers. Rebates and allo&ances are deducted from revenue and include rebates, price reductions and incentives given to distributors @ customers, promotional campaigns and trade communication costs. ii. ,nterest @ (ark up income ,nterest @ mark up is recognised on a time proportion basis by reference to t!e principal outstanding and t!e applicable rate of return. iii. 1ividend income 1ividend is recognised as income &!en t!e rig!t of receipt is establis!ed. 5.)1 Se&"en$ in/#r"a$i#n Segment information is provided on t!e basis of product categories. A business segment is a group of assets and operations engaged in providing products t!at are subRect to risks and returns t!at are different from t!ose of ot!er business segments. Common e9penses are allocated to business segments based on t!eir respective budgeted revenue.
5.5+ Di4idends 1ividends distribution to t!e /roups s!are!olders is recognised as liability at t!e time of t!eir approval > interim dividend on declaration by 2oard of 1irectors and final dividend on approval in Annual /eneral (eeting. 5.5) S'are .ased pay"en$ T!e cost of a&arding s!ares to employees is reflected by recording a c!arge in t!e profit and loss account eKuivalent to t!e fair value of s!ares over t!e vesting period. ;!ere a&arded s!ares relate to /roup Companies a corresponding provision is created to reflect t!e liability. 5++2 3##6 DRupees in t!ousandE :. PROPERTY0 P7ANT AND EFUIPMENT 4perating assets > note )." :012205)* ),#76,"3" E Capital &ork in progress > at cost > note ).3 33+0+*5 +)),+-" E 303520592 ),-)#,-63 E 7-
:.) Opera$in& asse$s 7and Bui!din&s P!an$ and E!e$ria!0 Furni$ure M#$#r 4e'i!es TOTA7 "a'inery "e'ania! and Free'#!d 7ease'#!d On On and #//ie /i$$in&s O=ned He!d under /ree'#!d !ease'#!d eAuip"en$ /inane !and !and !eases DRupees in t!ousandE Ne$ arryin& 4a!ue .asis Qear ended 1ecember )", 3##8 4pening net book value D.2*E 3-,-6- +38 +)+,70) "0,-0+ 3,367,736 ")+,+)3 "-,867 "#8,007 8#,08+ ),#76,"3" Additions Dat costE > > 7),70# ),0-" ","--,)3) 6#,#8# ),6"# )0,#-) 63,8"+ ",+)-,-7" 1isposals Dat .2*E > > > > D"0,-6+E D"),)"0E D)7)E D-8,8+#E D",6#3E D7#,83-E 1epreciation c!arge > D6E D"+,#)6E D838E D)"6,-8)E D)),8++E D3,"+8E D-","##E D)+,"3+E D+-),06"E Closing net book value D.2*E 3-,-6- +3" -"+,880 "7,)86 ),"#",#7) "-6,)-3 "6,#+8 )+,683 ""6,063 ),788,3"0 Gr#ss arryin& 4a!ue .asis A$ Dee".er :)0 5++2 Cost 3-,-6- 6"0 003,6"7 68,-0+ +,8"#,3"# -)6,+6# )0,+"3 "7+,6+7 "68,"#6 0,-3+,-33 Accumulated depreciation > D37-E D"+6,8))E D-7,"66E D",6#7,""6E D)8#,""8E D"7,)0+E D"-7,706E D0#,+)-E D3,-)0,)#0E .et book value D.2*E 3-,-6- +3" -"+,880 "7,)86 ),"#",#7) "-6,)-3 "6,#+8 )+,683 ""6,063 ),788,3"0 .et carrying value basis Qear ended 1ecember )", 3##6 4pening net book value D.2*E 3-,-6- +)- 3+),"37 "",#6) ",306,"-" "06,"0# "0,8-- "+0,""8 +",+8# ",7"8,760 Additions Dat costE > > 3##,0#- 0,3#0 ",3+),8)7 38,8"7 ",7"+ )+,+77 0),#-- ",-68,7)6 1isposals Dat .2*E > > > > D"),)83E D3,)))E D0-#E D8,6#+E D),#88E D38,"-6E 1epreciation c!arge > D6E D8,66"E D6"-E D3"8,#"6E D-7,3"+E D3,3+#E D0),3++E D3#,60)E D)63,76"E ,mpairment reversal > > > > ))0 > > > > ))0 Closing net book value D.2*E 3-,-6- +38 +)+,70) "0,-0+ 3,367,736 ")+,+)3 "-,867 "#8,007 8#,08+ ),#76,"3" /ross carrying value basis At 1ecember )", 3##6 Cost 3-,-6- 6"0 -08,6-7 6+,7") ),667,### --8,++6 )-,+6+ )#+,06# ""#,#06 -,-+6,03" Accumulated depreciation > D388E D")),670E D-8,)+7E D",+77,#6)E D+3+,#"-E D"7,-7-E D"70,##"E D37,)8)E D3,)0#,-##E .et book value D.2*E 3-,-6- +38 +)+,70) "0,-0+ 3,367,736 ")+,+)3 "-,867 "#8,007 8#,08+ ),#76,"3" Depreia$i#n ra$e B per annu" @ ).+; ).; $# 5.; ).; $# 5 2 $# 5+ 2 $# 5+ 2 $# )3 5; 5; 70
5++2 3##6 DRupees in t!ousandE :.5 Capi$a! W#r< in Pr#&ress @ a$ #s$ Civil &orks 5;0*++ "0,")) Plant and mac!inery 3)303*5 +"6,)"8 33+0+*5 +)),+-" 1etails of property, plant and eKuipment disposed of during t!e year are given in note )7. 5++2 3##6 DRupees in t!ousandE 3. INTANGIB7ES @ #"pu$er s#/$=are .et carrying value basis Qear ended 1ecember )", 3##8 4pening net book value )50)9: "6,#+) Amortisation c!arge ,3029+- D+,86#E Closing net book value 90:+: "3,"6) /ross carrying value basis At 1ecember )", 3##8 Cost 530:32 3+,)+8 Accumulated amortisation ,)90+3;- D"3,"6-E .et book value 90:+: "3,"6) Remaining useful life in years ).;+ 3.-# ;. 7ONG TERM IN8ESTMENTS ,nvestments in related parties ,nvestment available for sale > at cost Fu$e'a!!y C'e"ia!s ,Pri4a$e- 7i"i$ed 3,### 0$ redeemable cumulative preference s!ares of Rs "## eac! 5++ 3## 5++ 3## 76
5++2 3##6 DRupees in t!ousandE *. 7ONG TERM 7OANS @ #nsidered &##d Related Parties 1irectors 20)52 6,6-" C!ief =9ecutive ))03;3 "+,-#7 ?ey management personnel ot!er t!an 1irectors and C!ief =9ecutive note 0.", 0.3 )02;1 -,76- 5)033) 38,3)- and 0.) 4t!ers =9ecutives )550*+5 "#6,"7+ 4t!er employees ::0*5: )0,3"" );*055; "+),+#- )990*** "6",0+# Recoverable &it!in one year > note "3 ,;90)5)- D-0,3-3E <ong term portion )5+0;3; ""-,)88 *.) Reconciliation of carrying amount of loans to 1irectors, C!ief =9ecutive, ot!er key management personnel and e9ecutives' Dire$#rs C'ie/ E(eu$i4e O$'er ?ey E(eu$i4es Mana&e"en$ Pers#nne! 5++2 3##6 5++2 3##6 5++2 3##6 5++2 3##6 DRupees in t!ousandE 4pening balance -+"3909;) -+" )30;+1 > ;019; +,83" )+90)13 80,")8 1isbursements @ > @ "-,36) @ "",33" ;10)23 6",0-3 Appointment of =9ecutives as 1irectors DnetE ,5:9- 8,07# @ > @ D8,"07E 5:9 D-3"E Appointment of ot!er key (anagement personnel as 1irectors :03;5 > @ > ,:03;5- > @ > Repayments ,502:2- D",+8#E ,:0+;;- D60+E ,**3- D",878E ,330+):- D-#,#6-E 20)52 6,6-" ))03;3 "+,-#7 )02;1 -,76- )550*+5 "#6,"7+ *.5 T!e above loans under t!e terms of employment !ave been provided interest free to facilitate purc!ase of !ouses, ve!icles and computers repayable in mont!ly installments over a period of t!ree to five years. <oans are secured against retirement benefits of t!e employees. *.: T!e ma9imum aggregate amount of loans due at t!e end of any mont! during t!e year &as' 5++2 3##6 DRupees in t!ousandE 1irectors 10292 8,3#8 C!ief =9ecutive )305;3 "-,36) ?ey management personnel ot!er t!an 1irectors and C!ief =9ecutive *0)9* "+,800 =9ecutives )5*05;1 "#6,"7+ 78
5++2 3##6 DRupees in t!ousandE 9 7ONG TERM DEPOSITS AND PREPAYMENTS Security deposits 3032+ E +,6-# E Prepaid rent > note 6." ;+:0;32 E "6# 4t!ers :)0111 > E ;3+0+59 E +,73# E 9.) 1uring t!e year, t!e /roup paid rent of !ead office building amounting to Rs 07".6- million. As at t!e year end, Rs -##.-+ million !as been classified as long term and Rs "3#.)7 million !as been classified as s!ort term prepayments. 2. RETIREMENT BENEFITS 2.) T!e /roup operates a provident fund, a pension plan, management and non>management gratuity plans and a pensioners medical plan for its employees. T!e pensioners medical plan is a book reserve plan &!ile t!e ot!er plans are invested t!roug! e9empt approved trust funds. T!e provident fund is a defined contribution plan. T!e pension and gratuity plans are defined benefits final salary plans. T!e pensioners: medical plan reimburses actual medical e9pense as defined in t!e plan. 2.5 T!e latest actuarial valuation of t!e defined benefit plans &as conducted at 1ecember )", 3##8 using t!e proRected unit credit met!od. 1etails of t!e defined benefit plans are' Pensi#n Fund Gra$ui$y Funds Pensi#nersD Media! P!an 3++2 3##6 5++2 3##6 5++2 3##6 ,Rupees in t!ousandE Ba!ane S'ee$ Re#ni!ia$i#n %air value of plan assets )0;9)0311 ",-33,--" E 5:)0:+; )08,7+8 E @ > Present value of defined benefit obligations ,)03*20:3*- D",+76,883E ,3)*02+:- D+#+,"37E ,)*:0)93- D")3,"8"E %unded status )+:0);: 3+,007 E ,)2;0312- D)-,"8"E E ,)*:0)93- D")3,"8"E Unrecognised net actuarial loss @ DgainE )+505+5 "7+,7+3 E 1+02;; 00,++8 E )20+5: D8,383E Recognised asset @ DliabilityE 3#-,)-- 3"7,0"" E ,130*3:- )",306 E ,)3;0);)- D"+#,+0)E M#4e"en$ in $'e /air 4a!ue #/ p!an asse$s %air value as at Canuary " )0;550;;) ",+-6,77" E :*20132 +6-,-7# =9pected return on plan assets ):90)13 "--,860 E ::05;+ -",763 Actuarial gains @ DlossesE )101)9 D7,#"3E ,);0;13- D),373E =mployer contributions :20+)1 )-,)8- E 5;*03+1 37,#6# E 2enefits paid ,)3*0)25- D""6,087E ,3))09+2- D"8+,)73E %air value as at 1ecember )" )0;9)0311 ",-33,--" E 5:)0:+; )08,7+8 E M#4e"en$ in $'e de/ined .ene/i$ #.!i&a$i#n 4bligation as at Canuary " )03190225 ",+)","-" E 3+30)51 +#8,3-) E ):50)2) "+-,""8 E Service cost :503)+ )3,070 E :)0);9 )",708 E )0;3* ",700 E ,nterest cost )3;015+ "-",#37 E 35033* +),##8 E )30+;5 "-,-"3 E Settlement and curtailment @ D"",8#8E :3+052* ""8,-)+ E @088 E Actuarial losses @ DgainsE ,*)0*23- "3,-#) )+031: D"),3+3E E 5;022; D33,8""E 2enefits paid ,)3*0)25- D""6,087E ,3))09+2- D"8+,)73E ,)+031+- D8,373E 4bligation as at 1ecember )" )03*20:3* ",+76,883 3)*02+: +#+,"37 E )*:0)93 ")3,"8" E C#s$ Current service cost :503)+ )3,070 E :)0);9 )",708 E )0;3* ",700 E ,nterest cost )3;015+ "-",#37 E 35033* +),##8 E )30+;5 "-,-"3 E =9pected return on plan assets ,):90)13- D"--,860E ,::05;+- D-",763E @ > Settlement and curtailment @ D"",8#8E :3+052* ""8,-)+ @088 Recognition of actuarial loss ))0):1 "#,8)7 )0*2+ "6,676 ,35+- 67# =9pense ;5059; 30,88# :250:)1 "-7,))- );0)92 "8,7-0 Actual return on plan assets );90))) "+0,80+ )90*;* +8,08# 77
Principal actuarial assumptions used are as follo&s' 5++2 3##6 1iscount rate & e9pected return on plan assets )*.++B "".##$ %uture salary increases ):.91B 8.7#$ %uture pension increases 1.9:B -.6#$ (edical cost trends rates )+.32B -.6#$ =9pected contributions to post employment benefit plans for t!e year ending 1ecember )", 3##7 is Rs -0# million D3##8' Rs 3## millionE. Comparison for five years' 5++2 3##6 3##0 3##- 3##+ DRupees in t!ousandE As at 1ecember )" %air value of plan assets )02+502+3 ",87",+77 ",7)),-8" ",8"3,308 ",70",-+# Present value of defined benefit obligation ,50+320:5:- D3,#)+,"73E D",78+,-33E D",6-#,8"+E D",8#3,"+#E D1eficitE @ surplus ,53;0;)1- D"+3,07)E D-#,7+"E 0",+-+ "-7,+## E(periene adGus$"en$s /ain @ DlossE on plan assets Das percentage of plan assetsE +.5B D#.6$E #.)$ D0.-$E D#.7$E D/ainE @ loss on obligations Das percentage of plan obligationsE ,).5B- D".3$E 6.-$ ".-$ -.+$ T!e effects of a "$ movement in t!e assumed medical cost trend rate are as follo&s' Inrease Derease DRupees in t!ousandE =ffect on t!e aggregate of current service and interest costs 3,"-" ",60- =ffect on t!e defined benefit obligations "6,"+8 "+,0-3 Plan assets comprise of t!e follo&ing' 5++2 3##6 Rupees in $ Rupees in $ t!ousand t!ousand =Kuity 5:0193 ).: > > 1ebt ):+0259 9.: 633,--) )8.3 )0*320++: 1).3 ","08,7+0 0".8 4t!ers Dinclude cas! and bank balancesE )02+502+3 )++ ",87",+77 "## T!e e9pected return on plan assets &as determined by considering t!e e9pected returns available on t!e assets underlying t!e current investment policy. =9pected yields on fi9ed interest investments are based on gross redemption yields as at t!e balance s!eet date. "##
T!e actuary conducts separate valuations for calculating contribution rates and t!e /roup contributes to t!e pension and gratuity funds according to t!e actuarys advice. =9pense of t!e defined benefit plans is calculated by t!e actuary. 2ased on t!e above actuarial valuation t!e retirement benefits > asset amounts to Rs 3#-.)- million D3##6' Rs 3-#.88 millionE and retirement benefits > liability amounts to Rs 3)7.67 million D3##6' Rs "+#.+0 millionE. 2.: 1uring t!e year t!e /roup contributed Rs -".)7 million D3##6' Rs +-.+) millionE to t!e provident fund. 5++2 3##6 DRupees in t!ousandE 1. STORES AND SPARES Stores Dincluding in transit Rs 8.8# millionL 3##6' Rs 6.60 millionE *20222 -8,-)" E Spares Dincluding .il in transitL 3##6' Rs #.-7 millionE )13019) "38,867 E 4t!ers 5015+ 3,"3# E 5**0991 "87,-)# E Provision for slo& moving and obsolete stores and spares ,:30225- D30,3+8E 5:)0219 "0),383 T!e /roup !as recognised a provision of Rs 8.0) million D3##6' Rs 7.3 millionE for obsolescence and !as not &ritten off any inventory during t!e year D3##6' inventory of Rs -."7 million &as &ritten offE by utilising t!e provision. 5++2 3##6 DRupees in t!ousandE )+. STOC? IN TRADE Ra& and packing materials at cost Dincluding in transit Rs -0- millionL 3##6' Rs 0"8 millionE 502)50;); ",6"-,860 E Provision for obsolescence ,)3+033+- D-0,0+7E 50*950+9; ",0-7,336 E ;ork in process )+503** 00,"73 E %inis!ed goods Dincluding in transit Rs 30+ millionL 3##6' Rs 3#8 millionE )0;;+0:1) ",#6),30+ E 2y product > glycerine )209)+ 3,")" )0;*10)+) ",#6-,)7- Provision for obsolescence ,2)0295- D6+,6-#E )03290551 ",###,0+- E 305*)099+ 3,630,#0+ "#"
)+.) Stock in trade includes Rs 60# million D3##6' Rs )+0 millionE !eld &it! t!ird parties. )+.5 T!e above balances include items costing Rs ))6.7 million D3##6' Rs 3#8.+ millionE valued at net realisable value of Rs 8#.6 million D3##6' Rs -#.6 millionE )+.: T!e /roup !as recognised a provision of Rs "70.#0 million for obsolescence D3##6' Rs 80.#0 millionE and !as &ritten off inventory amounting to Rs "#-."+ million D3##6' Rs )8.+0 millionE by utilising t!e provision during t!e year ended 1ecember )", 3##8. 5++2 3##6 DRupees in t!ousandE )). TRADE DEBTS Considered good 55209*: 3)7,)") E Considered doubtful 39031) -+,"-+ E 59*05;3 37),+06 E Provision for doubtful debts > note ""." ,39031)- D-+,"-+E 55209*: 3)7,)") E )).) T!e /roup !as recognised a provision of Rs ).3- million D3##6' reversed a provision of Rs ".-3 millionE and !as &ritten off debts amounting to Rs 7.7" million D3##6' .ilE by utilising t!e provision during t!e year ended 1ecember )", 3##8. 5++2 3##6 DRupees in t!ousandE )5. 7OANS AND AD8ANCES C#nsidered &##d Current portion of loans to employees > note 0 ;90)5) -0,3-3 E Advances to' =9ecutives > note "3." )+0:93 -,""# E Suppliers and ot!ers ;*03+1 0",-30 E )5:01+3 "33,888 E C#nsidered d#u.$/u! Advances to suppliers and ot!ers *0533 0,3++ E ):+0)32 "37,")3 Provision for doubtful advances to suppliers and ot!ers ,*0533- D0,3++E )5:01+3 "33,888 )5.) T!e advances to e9ecutives are given to meet business e9penses and are settled as and &!en t!e e9penses are incurred. "#3
5++2 3##6 DRupees in t!ousandE ):. TRADE DEPOSITS AND SHORT TERM PREPAYMENTS Trade and margin deposits ):+02+2 6",67# E Prepayments =RP implementation )3)0593 +",6)3 Rent > note 6." )3*0+9: )",8#6 4t!ers > note ")." 120522 7#,6)- ;)*033: 3)0,#0+ ):.) T!is includes prepayment in respect of s!ares matc!ed by t!e /roup under t!e follo&ing s!are>based compensation plan. *ariable Pay in S!ares D*P,SE' Under t!is plan, employees eligible as per policy can c!oose to take bet&een "#$ and 3-$ or none at all, of t!eir gross variable pay in s!ares of Unilever P<C or Unilever .*. ,f t!e employee opts for t!e s!ares, Unilever P<C and Unilever .* &ill grant matc!ing s!ares, on t!e condition t!at t!e employee stays &it! t!e /roup and !olds t!ese s!ares for at least t!ree years. 8PIS Unilever P<C Unilever .* S!ares of (arc! 3", 3##6 (arc! 3", 3##6 1ate of grant (arc! 3#, 3##8 (arc! 3#, 3##8 Total number of s!ares granted 3##6 ",-3- ",-6" 3##8 ",-)3 ",-)7 %air value @ S!are price on grant date 3##6 V"+.88 X3".)) 3##8 V"0.63 X3".)# Contractual life DyearsE ) ) *esting conditions Performance Performance conditions conditions Settlement S!ares S!ares =9pected lapse per year 3#$ 3#$ =9pected outcome of meeting t!e performance criteria Dat t!e grant dateE 3#"# by (arc! 3", by (arc! 3", 3#"# 3#"# 3#"" by (arc! 3#, by (arc! 3#, 3#"" 3#"" "#)
5++2 3##6 DRupees in t!ousandE )3. OTHER RECEI8AB7ES Reei4a.!e /r#" re!a$ed par$ies Unilever Pakistan %oods <imited *:0**1 "7,+"# Union Pakistan Provident %und @)",++6 Unilever /ratuity Plan :905:3 "3),7)6 E Associated undertakings 5+03;2 > ;orkers profits participation fund > note "+." ;;0;9) 7,"38 E O$'ers =9port rebate claims receivable @3,#"7 E Receivable from distributors on account of eKuipment supply ;0:5+ "8,836 E Receivable from supplier on account of marketing reimbursement @ "8,333 Receivable in respect of sale of fi9ed assets )*03*3 > 4t!ers 520*5+ )+,806 55*019* 3-6,8-6 Provision for doubtful receivables ,209)2- D8,6"8E 5)205;2 3+7,")7 )3.) W#r<ersE pr#/i$s par$iipa$i#n /und 2alance as at Canuary " > receivable 10)52 -3,30" Allocation for t!e year ,);90+92- D")-,80"E ,)3901;+- D8),0##E Amount paid to t!e trustees 5+:0;5) 73,638 2alance as at 1ecember )" > receivable ;;0;9) 7,"38 "#+
5++2 3##6 DRupees in t!ousandE );. TAK REFUNDS DUE FROM GO8ERNMENT Sales ta9 refundable > amounts paid under protest > note "-." ):90+)5 "+8,+07 Ta9ation > payments less provision )*30993 > 4t!ers 59 36 :+)02): "+8,+70 );.) T!is includes a sum of Rs ")" million D3##6' Rs "+" millionE paid by &ay of abundant caution under t!e Amnesty Sc!eme, to avoid additional Sales Ta9 and Surc!arge being levied in t!e event of unfavourable decisions of t!e appeals pending in t!e 5ig! Courts. T!ese appeals &ere filed by t!ird party manufacturers in respect of disallo&ance of input ta9 claimed by t!em on t!e ground t!at ta9 invoices and bills of entry &ere in t!e /roups name. T!e contracts &it! suc! manufacturers provided t!at in t!e event of any liability arising against t!em on t!is account, t!e /roup &ould reimburse t!e ta9. T!e /roups management and legal advisors e9pect a favourable outcome of t!e appeals, o&ing to t!e fact t!at t!e demands arose as a result of procedural matters and t!at t!ere &as no loss of revenue to t!e /overnment. ;it!out preRudice to t!e earlier appeals filed, t!e /roup !as referred one of t!e above cases to t!e Alternate 1ispute Resolution Committee, constituted under t!e Sales Ta9 la&, t!e decision of &!ic! is still a&aited. 5++2 3##6 DRupees in t!ousandE )*. CASH AND BAN? BA7ANCES ;it! banks on' current accounts )+30122 3#,"00 E savings accounts @ "08,0"3 term deposits > !aving maturity of t!ree mont!s D3##6' maturity of one mont!E )5:055+ ""-,### ,n !and' cas! )02+) ",33+ 5:+0++1 )#-,##3 At 1ecember )", 3##8 t!e rates of mark up on savings accounts and term deposits range from "$ to ").8$ per annum D3##6' #."$ to "#$ per annumE. "#-
5++2 3##6 DRupees in t!ousandE )9. SHARE CAPITA7 Au$'#rised s'are api$a! +6,8)- -$ cumulative preference s!ares of Rs "## eac! 3092: +,68) E "-,7#+,))# 4rdinary s!ares of Rs -# eac! 91;05)9 67-,3"6 E 2++0+++ 8##,### E Issued0 su.sri.ed and paid up api$a! -$ cumulative preference s!ares of Rs "## eac! S!ares allotted' +),8)- for consideration paid in cas! 30:2: +,)8) E +,### for acKuisition of an undertaking 3++ +## E +6,8)- 3092: +,68) E 4rdinary s!ares of Rs -# eac! S!ares allotted' +06,6#+ for consideration paid in cas! 5:0:2; 3),)8- E +,767,3#8 for consideration ot!er t!an cas! under sc!emes of arrangements for amalgamations 53201*) 3+8,70" E 6,8+0,7-6 as bonus s!ares :150:32 )73,)+8 E "),37),807 **30*13 00+,07+ E **10399 007,+66 E At 1ecember )", 3##8 Unilever 4verseas 5oldings <imited, U?, a &!olly o&ned subsidiary of Unilever P<C, U? !olds 7,6"",37) ordinary s!ares and )),6)- preference s!ares of Unilever Pakistan <imited D1ecember )", 3##6' 7,)-7,+"3 ordinary s!ares and )),6)- preference s!aresE. 5++2 3##6 DRupees in t!ousandE )2. RESER8ES Capi$a! reser4es Arising under sc!emes of arrangements for amalgamations > note "8." 9+0151 6#,737 E Contingency > note 3-." :5)039) )0),"#0 E 4t!er > note 33.) @)),87- :1503++ +06,7)# E Re4enue reser4es Unappropriated profit )0)2:053: 80),6"3 )0;9;0*3: ",))",0+3 )2.) T!is represents amounts of Rs "8.)0 million and Rs -3.-6 million t!at arose under sc!emes of arrangement for amalgamations of former (e!ran ,nternational DPrivateE <imited, former Ambrosia ,nternational <imited and former Pakistan ,ndustrial Promoters DPrivateE <imited &it! t!e /roup. "#0
)1. SURP7US ON RE8A7UATION OF FIKED ASSETS T!is represents surplus over book values resulting from t!e revaluations of property, plant and eKuipment carried out in "76), "76-, "768 and "78", adRusted only by surplus realised on disposal of revalued assets, incremental depreciation arising out of revaluation and deferred ta9ation. 5++2 3##6 DRupees in t!ousandE 2alance as at Canuary " )305*) "+,7#7 E Transferred to unappropriated profit > net of deferred ta9ation' incremental depreciation for t!e year ,*32- D0+8E 2alance as at 1ecember )" ):0*): "+,30" 5+. 7IABI7ITIES AGAINST ASSETS SUBLECT TO FINANCE 7EASES Present value of minimum lease payments )+10*31 6#,3#- E Current maturity s!o&n under current liabilities ,:50:55- D"6,36)E 990:59 -3,7)3 E Mini"u" !ease pay"en$s .ot later t!an " year 3*0519 3+,68" E <ater t!an one year and not later t!an - years 230331 0",+)- E ):+093* 80,3"0 E %uture finance c!arges on finance leases ,5)0+19- D"0,#""E Present value of finance lease liabilities )+10*31 6#,3#- E Present value of finance lease liabilities .ot later t!an " year :50:55 "6,36) E <ater t!an one year and not later t!an - years 990:59 -3,7)3 E )+10*31 6#,3#- E T!e above represents finance leases entered into &it! leasing companies for motor ve!icles. T!e liability is payable by 1ecember 3#"3 in semi annual and Kuarterly installments. <ease payments bearing pre>determined markup rates include finance c!arge ranging from 0.3-$ to 8.33$ per annum D3##6' 8$ to "+.6-$ per annumE &!ic! are used as discounting factors. <ease payments bearing variable markup rates include finance c!arge at ?,24R W #.8-$ > 3$ per annum. ?,24R is determined on semi>annual basis for ne9t t&o Kuarterly and semi annual rentals. "#6
3##6 C!arge @ 5++2 opening DreversalE !#sin& DRupees in t!ousandE 5). DEFERRED INCOME TAK 7IABI7ITIES I ,ASSETS- Credit @ DdebitE balance arising in respect of' accelerated ta9 depreciation allo&ance -#7,-++ E 3#),78) E 9):0;59 surplus on revaluation of fi9ed assets 6,08" E D070E *012; provision for retirement benefits )8,0)8 E D-#,""+E ,))039*- s!ares>based compensation D"",80+E D"3#E ,))0123- provision for stock in trade and stores and spares D--,"66E D)","#+E ,2*052)- provision for doubtful debts, advances and ot!er receivables D)8,--6E 3,#") ,:*0;33- provision for restructuring D"37,8-7E D)",868E ,)*)09:9- 4t!ers D"",)03E D)",+6-E ,3502:9- )#7,#++ 0#,0#7 :*10*;: 5++2 3##6 DRupees in t!ousandE 55. TRADE AND OTHER PAYAB7ES Creditors 3:+0+29 3-7,""+ E 2ills payable 3)50:3; ",3"#,#76 E Accrued liabilities 501+)0)53 3,606,)07 E Royalty and tec!nical services fee 53*0;+9 ")#,+38 E Advance payment from customers 290+)) 6+,-#- E Sales ta9 payable 1)0:+1 -",+7" E %ederal e9cise duty payable 1+02)3 -",66" ;orkers: &elfare fund 1:0319 6-,0)8 E Security deposits from dealers > note 33." )90):9 "6,")6 E Unclaimed dividend )+*039) 77,0#- E Union Pakistan Provident %und > related party ))01:9 > Unilever Pension Plan > related party ))0121 > <iability for s!are>based compensation plans > note 33.) :;01;: > 4t!ers ):05;: "+,86) E 30;3103:3 +,6-3,#38 E 55.) T!is represents security deposits obtained by former Pakistan ,ndustrial Promoters DPrivateE <imited against freeBer cabinets placed &it! dealers. 33.3 Amounts due to related parties included in trade and ot!er payables are as follo&s' 5++2 3##6 DRupees in t!ousandE Ultimate parent company 53*0;+9 ")#,+38 E Associated companies 2390*;) ",+)#,)"+ E T!ird parties &!ose manufacturing processes are dependent on Unilever 9305)2 -),688 E Company in &!ic! close family member of a director is !olding directors!ip 5203)2 03,"#" E "#8
55.: S'are@.ased #"pensa$i#n p!ans As at 1ecember )", 3##8 t!e /roup !ad follo&ing s!are>based compensation plans' /lobal Performance S!are Plan D/PSPE and <eaders!ip Performance S!are Plan D<PSPE' Under t!e plans, employees eligible as per policy can be a&arded conditional s!ares of Unilever P<C or Unilever .* &!ic! &ill vest t!ree years later depending on Unilevers ac!ievement of set targets for Underlying Sales /ro&t! DUS/E, Ungeared %ree Cas! %lo& DU%C%E and Total S!are!older Return DTSRE ranking over t!e t!ree>year performance period. T!e details of t!e arrangement are as follo&s ' /PSP <PSP S!are of Unilever P<C Unilever .* Unilever P<C Unilever .* 1ate of grant 3##0 (arc! 3", 3##0 (arc! 3", 3##0 (arc! 3", 3##0 (arc! 3", 3##0 3##6 (arc! 3", 3##6 (arc! 3", 3##6 (ay 33, 3##6 (ay 33, 3##6 3##8 (arc! 3", 3##8 > (arc! 3#, 3##8 (arc! 3#, 3##8 Total number of s!ares granted 3##0 "+,768 -8- ",++6 ",++# 3##6 "#,+8# "8# ",-)# ",-)# 3##8 0,+7+ > ",33- ",33- )",7-3 60- +,3#3 +,"7- %air value @ S!are price on ").#" "7.#) ").#" "7.#) grant date 3##0 V V 3##6 "+.88 3".)) "-.83 33.3# V V 3##8 "0.63 > "0.63 3".36 V V Contractual life DyearsE ) ) ) ) *esting conditions Performance Performance Performance and Performance and conditions conditions market conditions market conditions Settlement S!ares S!ares S!ares S!ares =9pected lapse per year 3#$ 3#$ 3#$ 3#$ =9pected outcome of meeting t!e performance criteria Dat t!e grant dateE 3##7 by (arc! 3", 3##7 by (arc! 3", 3##7 by (arc! 3", 3##7 by (arc! 3", 3##7 3#"# by (arc! 3", 3#"# by (arc! 3", 3#"# by (ay 33, 3#"# by (ay 33, 3#"# 3#"" by (arc! 3#, 3#"" > by (arc! 3#, 3#"" by (arc! 3#, 3#"" .o dividend payments &ere e9pectedL conseKuently, t!e measurement of t!e fair value did not consider dividends. 55.:.) De$ai!s #/ p!an $'a$ 4es$ed durin& $'e year are% GPSP S!are of Unilever P<C Unilever .* 1ate of grant (ay "8, 3##- (ay "8, 3##- *esting date (ay "8, 3##8 (ay "8, 3##8 "".76 "6.-6 %air value @ s!are price on grant date V "6.33 3#.77 %air value @ s!are price on vesting date V -.3- ).+3 1ifference of grant date and settlement date fair value V ) ) Contractual life DyearsE *esting conditions Performance Performance conditions conditions Settlement Cas! Cas! =9pense arising on settlement "#,"#0 67" ,n vie& of rec!arge arrangements and payments in cas!, t!e /roup !as treated t!ese s!are>based plans as liability. "#7
5:. SHORT TERM BORROWINGS S!ort term running finance > secured T!e facilities for running finance available from various banks amount to Rs -.77 billion D3##6' Rs +.+3 billionE. T!e rates of markup range bet&een ").7#$ to "0.30$ per annum D3##6' 7.0#$ to "#."+$ per annumE. T!e arrangements are secured by &ay of pari passu c!arge against !ypot!ecation of /roup:s stock in trade. T!e facilities for opening letters of credit and guarantees as at 1ecember )", 3##8 amounted to Rs 3.)6 billion D3##6' Rs +.0- billionE, of &!ic! t!e amount remaining unutilised at year end &as Rs ".)+ billion D3##6' Rs ).-3 billionE. 5++2 3##6 DRupees in t!ousandE 53. PRO8ISIONS Provision for cess less payments > note 3-." )+20:3) > Res$ru$urin& 2alance as at Canuary " :9)0+59 ""#,### E Provision during t!e year > note 3+." 321052+ )63,3)+ Utilised during t!e year ,:9;0+21- D""",3#6E 2alance as at 1ecember )" 32;05)2 )6",#36 ;1:0;;1 )6",#36 53.) T!e provision booked in 3##6 in respect of staff redundancy for beverages business and relocation @ dismantling cost of a factory !as been fully utilised during t!e year. (ore over, t!e /roup !as also raised provisions for planned staff redundaney for some factory employees and management staff. T!e full amount of provision is e9pected to be utilised during 3##7. 5;. CONTINGENCY AND COMMITMENTS 5;.) C#n$in&eny /overnment of Sind! t!roug! %inance Act, "77+ levied fee for services rendered in respect of development and maintenance of infrastructure on t!e import and e9port of goods. 5o&ever, t!e /roup filed a constitutional petition against t!e levy of suc! fee in t!e 5ig! Court of Sind! and t!e Court granted stay for t!e payment of t!e fee. 1uring t!e year 3##", t!e /overnment of Sind! introduced Cess in place of infrastructure fee &it! retrospective effect. As a result, Unilever:s petition became infractuous and a fres! suit &as filed by Unilever to c!allenge t!e levy. A stay against recovery of t!e aforesaid levy of Cess &as also obtained from t!e Court. ,n 3##) t!e 5ig! Court decided t!e issue against t!e /roup. Against t!is order an intra court appeal &as filed &it! t!e 5ig! Court. T!e appeal &as disposed of in August 3##8, &!ereby t!e levy imposed and collected &it! effect from 1ecember 38, 3##0 &as declared valid and all impostion and collection before suc! date as invalid. T!e Court furt!er ordered t!at all bank guarantees @ securities furnis!ed for transaction before 1ecember 38, 3##0 stand disc!arged and are liable to be returned back and t!ose furnis!ed in respect of transactions after 1ecember 38, 3##0
are liable to be encas!ed. T!e /roup as &ell as t!e /overnment of Sind! !ave filed appeals in t!e Supreme Court against t!e said order. A provision amounting to Rs "3#.78 million concerning t!e levy &it! respect from 1ecember 38, 3##0 !as been recognised in t!e financial statements. (oreover, t!e /roup !as paid an amount of Rs "3.0+ million under protest against t!e said order. As a matter of prudence, a total of Rs )3".+6 million as at 1ecember )", 3##8 DRs )0)."" million as at 1ecember )", 3##6E out of t!e revenue reserves !as been earmarked as contingency reserve for t!e levy uptil 1ecember 3##0. 5;.5 C#""i$"en$s Aggregate commitments for capital e9penditure and for&ard purc!ases as at 1ecember )", 3##8 amounted to Rs "30.3) million D3##6' Rs 0#6.0# millionE and Rs -)#.6+ million D3##6' Rs 806.0+ millionE respectively. Aggregate commitments for operating lease rentals as at 1ecember )", 3##8 amounts to' 5++2 3##6 DRupees in t!ousandE .ot later t!an one year 1:0::+ -",6#" 4ver one year to five years )+90)+5 36,-)7 5++03:5 67,3+# T!e above includes uRra! payments for ,Rara! financing of motor ve!icles bearing a mark up of si9 mont!s ?,24R W ".)-$ for rentals payable semi annually. 5*. SEGMENT INFORMATION Segmental results and ot!er information is provided belo& on t!e basis of product categories. T!ese categories are' 5ome and Personal Care > represents laundry and a &ide range of cleaning, skin cleansing, skin care, !air care, deodorants, oral care and ot!er personal care products 2everages > represents tea ,ce Cream > represents ice cream 4t!er > represents margarine
5*.) Se&"en$ ana!ysis HOME AND BE8ERAGES ICE CREAM OTHER TOTA7 PERSONA7 CARE DRupees in t!ousandE Se&"en$ resu!$s /#r $'e year ended Dee".er :)0 5++2 /ross sales 3",-3+,7-3 "",6"-,68# -,#-8,7++ 6-6,+70 )7,#-6,"63 Sales ta9 D),#6-,"30E D",6"0,0--E D8+0,387E > D-,0)8,#6#E %ederal e9cise duty D673,76+E D76,--7E D+",)30E > D7)",8-7E D),808,"##E D",8"+,3"+E D886,0"-E > D0,-07,737E Sales e9cluding sales ta9 and federal e9cise duty "6,0-0,8-3 7,7#",-00 +,"6",)37 6-6,+70 )3,+86,3+) Rebates and allo&ances D8+6,783E D)#7,7#)E D)+0,63+E D3-,67-E D",-)#,+#+E "0,8#8,86# 7,-7",00) ),83+,0#- 6)",6#" )#,7-0,8)7 Cost of sales D7,0)3,)3"E D6,))8,7++E D3,-+),08)E D-#0,3""E D3#,#3","-7E /ross profit 6,"60,-+7 3,3-3,6"7 ",38#,733 33-,+7# "#,7)-,08# 1istribution costs D),)+8,877E D","7",-#3E D",#07,#6"E D338,""#E D-,8)6,-83E Administrative and restructuring cost allocated to segments D863,)8#E D+#3,373E D33-,""+E D)-,)80E D",-)-,"63E Segment result 3,7--,36# 0-8,73- D"),30)E D)8,##0E ),-03,730 Administrative and restructuring cost unallocated D"0-,)-0E 4t!er operating e9penses D3+6,300E 4t!er operating income 3-),#67 Profit from operations ),+#),)8) %inance costs D+00,"00E Profit before ta9ation 3,7)6,3"6 Ta9ation D7++,83"E Profit after ta9ation ",773,)70 E Se&"en$ resu!$s /#r $'e year ended Dee".er :)0 5++9 /ross sales "-,-#-,078 7,683,0+" ),7-#,8"6 0"-,0-" 37,8-+,8#6 Sales ta9 D3,3"-,6+)E D",+#3,787E D0+0,0#-E > D+,30-,))6E %ederal e9cise duty D-6#,7-+E D)),00"E D"),+#)E > D0"8,#"8E D3,680,076E D",+)0,0-#E D00#,##8E > D+,88),)--E Sales e9cluding sales ta9 and federal e9cise duty "3,6"7,##" 8,)+-,77" ),37#,8#7 0"-,0-" 3+,76",+-3 Rebates and allo&ances D7"6,+76E D+8-,7#8E D3"6,"8)E D"7,"78E D",0)7,680E "",8#",-#+ E 6,80#,#8) E ),#6),030 E -70,+-) E 3),))",000 E Cost of sales D0,)63,+66E D-,0)0,+")E D",88",670E D)-6,87-E D"+,3+8,-8"E /ross profit -,+37,#36 E 3,33),06# E ","7",8)# E 3)8,--8 E 7,#8),#8- E 1istribution costs D3,8)8,+#0E D",38#,-0)E D66+,83+E D"36,)8+E D-,#3","66E Administrative and directly attributable restructuring cost D+++,"03E D0+3,6#-E D3)6,00#E D"7,86-E D")++,+#3E Segment result 3,"+0,+-7 E )##,+#3 E "67,)+0 E 7",377 E 3,6"6,-#0 E Administrative and restructuring cost not directly related to segments 4t!er operating e9penses D-#,606E 4t!er operating income D3"7,")#E 3#0,3)- Profit from operations 3,0-),8++ %inance costs D"#7,336E Profit before ta9ation 3,-++,0"6 E Ta9ation D8+0,#78E Profit after ta9ation ",078,-"7 E ""3
5*.) Se&"en$ ana!ysis @ #n$inued HOME AND BE8ERAGES ICE CREAM OTHER TOTA7 PERSONA7 CARE DRupees in t!ousandE O$'er se&"en$ in/#r"a$i#n As a$ Dee".er :)0 5++2 Segment assets ),++8,-3# ",667,"-+ ),+07,7#3 00,)-0 8,60),7)3 Unallocated assets 3,0-+,-#6 "",+"8,+)7 Segment liabilities ",6+",)#7 6)-,3"8 )73,378 ")","60 ),###,##" Unallocated liabilities 0,"-7,6#- 7,"-7,6#0 F#r $'e year ended Dee".er :)0 5++2 Capital e9penditure )00,-#0 +",8+" 8-#,7#6 )-,-"8 ",37+,663 Cost of goods manufactured 7,#33,"8" 6,0+6,68) 3,-00,##8 +#","7+ "7,0)6,"00 4t!er segment items Staff costs 83+,)6) -80,"+0 +"#,"03 )",7+7 ",8-3,0)# Advertising ",67#,#)) +#7,+"0 )67,-0# "-3,3## 3,6)",3#7 (arketing and selling 66,-)8 +-,7#0 )#,#0- +,6+6 "-8,3-0 4ut&ard freig!t and !andling +33,--0 "+6,8)6 3#7,)7" 3#,0## 8##,)8+ Royalty and tec!nical services fee 0#+,6)7 )"8,8+" "+7,78# 33,08) ",#70,3+) 1epreciation "38,"#6 +8,0-6 36#,707 -,7)8 +-),06" As a$ Dee".er :)0 5++9 Segment assets 3,)+),+37 ",)70,0#) 3,7)),87" 0),78) 0,6)6,7#0 Unallocated assets ",)07,78) 8,"#6,887 Segment liabilities ",+68,--" ",8)+,666 373,766 7),+#6 ),077,6"3 Unallocated liabilities 3,)73,676 0,#73,-#7 F#r $'e year ended Dee".er :)0 5++9 Capital e9penditure "-7,0+6 "#+,+07 ",-#-,6+) 6,#83 ",660,7+" Cost of goods manufactured 0,#8-,60- -,6"",3)) ",860,)#- 306,6"- "),7+",#"8 4t!er segment items Staff costs 6"0,+7) -73,"7# )--,+)6 "7,+0- ",08),-8- Advertising ",08),"7- -06,808 387,0#8 6-,8+) 3,0"0,-"+ (arketing and selling 03,+"# -",#0) 3-,-)" 3,8)6 "+",8+" 4ut&ard freig!t and !andling )"0,+#+ "30,37# "3",+3- "-,#)3 -67,"-" Royalty and tec!nical services fee )67,#0# 3"#,3"# "##,6-# "-,+3# 6#-,++# 1epreciation ""8,0)) 0#,8+0 "7#,830 3,000 )63,76" 4t!er operating e9penses and income represent unallocated corporate e9penses and income. Segment assets consist primarily of property, plant and eKuipment, intangibles, stores and spares, stock in trade and trade and ot!er debts. Segment liabilities comprise operating liabilities and e9clude items suc! as ta9ation and corporate borro&ings. 4t!er segment items comprise directly attributable segment costs. "")
59. OPERATING COSTS C#s$ #/ Sa!es Dis$ri.u$i#n C#s$s Ad"inis$ra$i4e T#$a! E(penses 5++2 3##6 5++2 3##6 5++2 3##6 5++2 3##6 DRupees in t!ousandE Ra& and packing material consumed )90);)021+ "",730,#+" E @ > @ > )90);)021+ "",730,#+" E (anufacturing c!arges paid to t!ird parties ;:;0*:+ +3+,"+"E @ > @ > ;:;0*:+ +3+,"+"E Stores and spares consumed )+20*:3 7-,+)-E @ > @> )+20*:3 7-,+)-E Advertising @> 509:)05+1 3,0"0,-"+E @> 509:)05+1 3,0"0,-"+E (arketing and selling @> );205;* "+",8+"E @ > );205;* "+",8+"E 4ut&ard freig!t and !andling @> 2++0:23 -67,"-"E @ > 2++0:23 -67,"-"E Royalty and tec!nical services fee @ > )0+1*053: 6#-,++#E @> )0+1*053: 6#-,++#E Staff costs > note 36." 91;0)93 6"#,)36E ;9;05:; -)),63+E 325055) +)7,-)+E )02;50*:+ ",08),-8-E Utilities :1903:: 36+,+67E 20:*9 +,808E :5052* )#,6)0E 3:20+2* )"#,#8)E Repairs and maintenance )9905*3 "+),87)E 5302;3 0,780E 5:0221 3#,+0+E 55*0++9 "6",)+)E Rent, rates and ta9es :;0*2* 3-,"#7E ):50*9; 83,36"E )+:013; -#,06)E 5950:+* "-8,#-)E 1epreciation :3+0*2) 3)7,0)-E *:059; 6+,008E 3109); -8,008E 3;:0*9) )63,76"E 3,636 Amortisation of computer soft&are @ > 50959 E 50)3: 3,"+)E 3029+ +,86#E Travelling and entertainment 3;0*+; +0,70-E 1:0;*2 "3+,737E *10)51 60,)7"E 5+20:+5 3+8,38-E Stationery and office e9penses :903+) +#,7"0E 3*0):9 +-,0#+E *9099: 6+,"63E );)0:)) "0#,073E =9penses on information tec!nology )0:5* --E )0229 )#8E )*30;95 "3",#76E )*9092; "3",+0#E Auditors remuneration > note 36.) @ > @ > )50)+1 "#,70+ )50)+1 "#,70+ Provision for doubtful debts > ot!ers @ > @ > )+0+++ ),8#) )+0+++ ),8#) Provision for doubtful debts > trade @ > > > :0539 > :0539 > 4t!er e9penses 3*09)* )0,-)0 )+509*; "#3,"+0E )1+05)1 ")+,37#E ::109++ 363,+#)E )10*9:033+ "),70),-)3 E ;02:90;25 -,#3","66E )05))0532 ",#33,7)-E 5*0955059+ 3#,##6,#6- E 4pening &ork in process **0)15 +),068E )109:10*:5 "+,##6,3"# E Closing &ork in process ,)+503**- D00,"73E Cost of goods manufactured )10*:90)** "),7+",#"8 E 4pening stock of finis!ed goods including by product glycerine )0+++0*33 076,)8"E %inis!ed goods purc!ased 29+0;92 0"#,830E Closing stock of finis!ed goods including by product glycerine ,)03290551- D",###,0++E 5+0+5)0);1 "+,3+8,-8" E ""+
59.) S$a// #s$s Cost of Sales 1istribution Costs Administrative Total =9penses 5++2 3##6 5++2 3##6 5++2 3##6 5++2 3##6 DRupees in t!ousandE Salaries and &ages 9;30+2306",00+ ;+)0+;2 +0+,)78 :92011* )+",7)# )0*:30):2 ",+66,773 (edical 5)0))533,008 53: -) )202*; 3#,37" 3+055+ +),#"3 S!are based payments ,93- "08 ):05+1 8,7)) )10;5: "#,37" :50*;2 "7,)73 Pension costs > defined benefit plan 1059: -,07" )505+3 "+,+07 );0;:5 "8,-38 :90++1 )8,088 /ratuity costs > defined benefit plan 50)*+)+- )90;33 "6,668 550:51 33,068 350+:: +#,8#" Pensioner:s medical plan 50*32 ),678 ;0;): -,78) 90+)9 8,+86 );0)92 "8,308 Provident fund cost > defined contribution plan ;019) -,77) 5;03*3 33,""# )101;1 "6,)37 ;)0:13 +-,+)3 91;0)93 6"#,)36 ;9;05:; -)),63+ 325055) +)7,-)+ )02;50*:+ ",08),-8- 59.5 <ease rentals amounting to Rs )77.-- million D3##6' Rs 3+#.83 millionE !ave been c!arged in operating cost for arrangements identified as operating leases upon application of ,%R,C + I N1etermining &!et!er an Arrangement contains a <easeM. T!ese arrangements include leases of property including offices, cold storage, depots and ot!er arrangements for use of plant and mac!inery &!ere fulfillment of t!e arrangement is dependent on t!e use of suc! assets and t!e arrangement conveys a rig!t to use t!e asset. 5++2 3##6 DRupees in t!ousandE 59.: Audi$#rsE re"unera$i#n Audit fee :0)3+ ),#+# E Ta9ation services 30))1 3,773 E <imited revie&, audit of consolidated financial statements, pension, provident and gratuity funds, t!ird party e9pense verifications and certifications for various government agencies 30;++ +,-8" E 4ut of pocket e9penses :;+ )-" E )50)+1 "#,70+ 52. OTHER OPERATING EKPENSES 1onations and Corporate Social Responsibility > note 38." :+0312 )",-") E ;orkers profits participation fund > note "+." );90+92 ")-,80" E ;orkers &elfare fund ;10*1+ -",6-0 E 53905** 3"7,")# E ""-
52.) D#na$i#ns and #rp#ra$e s#ia! resp#nsi.i!i$y 5++2 3##6 DRupees in t!ousandE 1onations include t!e follo&ing in &!om a director is interested' Na"e #/ Dire$#r,s- In$eres$ in D#nee Na"e and address #/ D#nee ". (r. =!san A. (alik 2oard (ember T!e ?idney Centre "63 @ R, RafiKui S!a!eed Road , ?arac!i. 50+*; ",8## 3. (r. =!san A. (alik Trustee <a!ore University of & Syed 2abar AliJ Pro>C!ancellor (anagement Sciences, 15A, <a!ore. 50;11 ","00 Corporate (ember ;orld ;ide %und for .ature, President>=meritus %eroBepur Road, <a!ore. > ",3## ). Syed 2abar AliJ Trustee T!e <ayton Ra!matulla! 2enevolent Trust S>"0, P!ase ,,, 15A, ?arac!i. )01++ ",03# JSyed 2abar Ali &as a director till April "8, 3##8 51. OTHER OPERATING INCOME In#"e /r#" in4es$"en$ in re!a$ed par$y 1ividend from %ute!ally C!emicals DPrivateE <imited )5 "3 Re$urn /r#" #$'er /inania! asse$s Return on savings accounts and term deposits > note 37." )3055* 3+,33) In#"e /r#" n#n@/inania! asse$s Salvage sales 590:)5 +3,7") Profit on disposal of property, plant and eKuipment 5102+; "),)") Sundry 3+0)+: 8,-8+ O$'ers Service fee from related party > note 37.3 :90+3+ )#,"-) Reversal of impairment loss @ ))0 Reversal of provision for doubtful debts > trade @ ",-"- <iabilities no longer payable &ritten back )+30;2) 8","7" =9cise duty refund @ ),77- 5;:0+91 3#0,3)- 51.) (arkup on savings accounts and term deposits &as earned at t!e rate ranging from "$ to ").8$ per annum D3##6' #."$ to "#$E. 51.5 T!is includes amount c!arged by t!e /roup for certain management and ot!er services rendered to its related party > Unilever Pakistan %oods <imited, in accordance &it! t!e Service Agreement based on commercial terms bet&een t!em. ""0
5++2 3##6 DRupees in t!ousandE :+. FINANCE COSTS In$eres$ #n !#an /r#" re!a$ed par$y ,nterest on s!ort term loan > note )#." )1039) > O$'ers (ark up on s!ort term borro&ings ):209+; 3),"+# E 2ank c!arges :*092+ 3),"6" E =9c!ange loss 5;205+: --,0)6 E %inance c!arge on finance leases )502)3 6,")8 E 4t!ers )1: "+" E 33*0*1; "#7,336 3**0)** "#7,336 :+.) 1uring t!e year, t!e /roup obtained an unsecured loan amounting to US1 "- million borro&ed from Unilever %inance ,nternational 2.*., Rotterdam, .et!erlands, an associated undertaking on (ay 36, 3##8, at a markup rate not e9ceeding si9 mont!s <,24R W "$ to meet &orking capital reKuirements. T!e loan &as repaid in US1 at t!e end of loan term on .ovember 3", 3##8. E :). TAKATION 5++2 3##6 DRupees in t!ousandE Current > for t!e year Pakistan 2*:0:39 636,7"8 E ABad ?as!mir 5+02*; "3,6)" E 22305)5 6+#,0+7 E 1eferred ta9 c!arge *+0*+1 "#-,++7 133025) 8+0,#78 E :).) Re!a$i#ns'ip .e$=een $a( e(pense and a#un$in& pr#/i$ Accounting profit before ta9 501:905)9 3,-++,0"6 Ta9 at t!e applicable ta9 rate of )-$ D3##6' )-$E )0+520+5* 87#,0"0 Ta9 effect on inadmissible e9penses and presumptive ta9 ,2:05+;- D++,-"8E Ta9 e9pense for t!e year 133025) 8+0,#78 E :5. EARNINGS PER SHARE T!ere is no dilutive effect on t!e basic earnings per s!are of t!e /roup, &!ic! is based on' Profit after ta9 )01150:1* ",078,-"7 Preference dividend on cumulative preference s!ares ,5:1- D3)7E Profit after ta9ation attributable to ordinary s!are!olders )01150);9 ",078,38# ;eig!ted average number of s!ares in issue during t!e year Din t!ousandsE ):0513 "),37+ =arnings per s!are DRupeesE );+ "38 ""6
::. PROPOSED AND DEC7ARED DI8IDENDS On #rdinary s'ares At t!e 2oard meeting on %ebruary 0, 3##7 a final dividend in respect of 3##8 of Rs -6 per s!are amounting to a total dividend of Rs 6-6.6- million is proposed D3##6' Rs 0) per s!are amounting to a total dividend of Rs 8)6.-" millionE. T!e interim dividend declared and already paid in respect of 3##8 &as Rs 00 per s!are amounting to a total dividend of Rs 866.+# million D3##6' Rs 0# per s!are amounting to a total dividend of Rs 676.0) millionE. On u"u!a$i4e pre/erene s'ares At t!e 2oard meeting on %ebruary 0, 3##7 dividend in respect of 3##8 of Rs 3)7 t!ousand !as been declared D3##6' Rs 3)7 t!ousandE. T!ese financial statements do not reflect t!e proposed final ordinary dividend and t!e dividend declared on cumulative preference s!ares as payable, &!ic! &ill be accounted for in t!e statement of c!anges in eKuity as an appropriation from t!e unappropriated profit in t!e year ending 1ecember )", 3##7. :3. RE7ATED PARTY TRANSACTIONS T!e follo&ing transactions &ere carried out &it! related parties during t!e year' 5++2 3##6 DRupees in t!ousandE Re!a$i#ns'ip =i$' Na$ure #/ $ransa$i#ns $'e Gr#up i. Ultimate parent company Royalty and tec!nical services fee )0+)+09+1 6#-,++# ii. Associated companies Purc!ase of goods *05190:19 -,))#,+33 Purc!ase of services :+0+13 )),"3- Sale of goods 5;5 386 Reciprocal arrangements for s!aring of common costs )+05*: 7,6"8 Sale of services 220112 0#,#6- Purc!ase of fi9ed assets @ "7,8-+ Sales of fi9ed assets 90*93 +,""- S!ort term loan received )0+5:0+++ > S!ort term loan repaid )0+*50*++ > ,nterest on s!ort term loan )1039) > iii. T!ird parties &!ose manufacturing processes are dependent on Unilever Toll manufacturing 3:)0;5* )6",6+8 Purc!ase of operating assets )5;0193 > 1ividend income )5 "3 iv. Company in &!ic! close family member of a 1irector is !olding directors!ip Purc!ase of goods 993039: ",+#8,-08 v. Company in &!ic! close family member of a key management personnel !olds a key management position Purc!ase of services @ "7 vi. ?ey management personnel Salaries and ot!er s!ort>term employee benefits 9;0;); 00,)06 Post>employment benefits *0929 -,6-7 Consideration received for ve!icle sold 99: > vii. 4t!ers 1onations *0;*; -,680 Corporate & social responsibility )0)93 > ""8
Royalty and tec!nical services fee is paid at t!e rates ackno&ledged by t!e State 2ank of Pakistan. 4t!er transactions &it! related parties are carried out on commercial terms, at market prices and are settled in t!e ordinary course of business. T!e related party status of outstanding balances as at 1ecember )", 3##8 are included in trade debts, ot!er receivables and trade and ot!er payables respectively. Arrangements &it! parent company and an associated company for granting of t!eir s!ares to employees of Unilever Pakistan <imited are disclosed in note ")." and note 33.). :;. REMUNERATION OF DIRECTORS0 CHIEF EKECUTI8E AND EKECUTI8ES T!e aggregate amounts c!arged in t!e financial statements of t!e year for remuneration including all benefits to directors, c!ief e9ecutive and e9ecutives of t!e /roup are as follo&s' =9ecutive 1irectors C!ief =9ecutive =9ecutives 5++2 3##6 5++2 3##6 5++2 3##6 DRupees in t!ousandE (anagerial remuneration and allo&ances 5:05:+ 3#,0-# )50352 "",0#- ::90*2: )3-,+"- S!are based compensation )+0)55 +,#80 )+0;;+ ",+#" ))0129 "),7#- Retirement benefitsJ :0)39 ",3"- )099: ",0-6 ;902*+ -6,-6- Rent and utilities :02;9 +,3#7 )035: ",)+# )+201*+ "#",3+" (edical e9penses 3*5 ")+ 5:3 )00 90+11 6,--+ 4t!er e9penses @ > )0355 ",)78 50332 -,0-# 3+02)2 )#,37+ 5902:+ "6,606 ;5*0+:9 -"",)+# .umber of persons 3CC + ) " :++ 308 JJ 1uring t!e year, (r. ,mran 5usain and (s. S!aBia Syed &ere appointed as directors of Unilever Pakistan <imited &it! effect from April ", 3##8 and April "7, 3##8 respectively in place of (r. Peter 5arvey and (r. Amar .aseer. T!e c!arge reflects t!e respective period of e9ecutive directors!ip !eld by t!em. ,n addition to t!is, a lump sum amount of Rs "-6.#0 million D3##6' Rs "+#."# millionE on account of variable pay !as been recognised in t!e financial statements for t!e current year payable in 3##7 after verification of target ac!ievement. 4ut of t!e variable pay recognised for 3##6 and 3##0 follo&ing payments &ere made' Paid in Paid in 5++2 re!a$in& 3##6 relating $# 5++9 to 3##0 DRupees in t!ousandE =9ecutive 1irectors 301+: +,37- E C!ief =9ecutive 30))9 -,+80 E =9ecutives 2+05)+ "#-,0+# E 4t!er employees 5309+* )-,3"- E )):01:* "-#,0)0 E J Retirement benefits represent amount contributed to&ards various retirement benefit plans. T!e e9ecutive directors, c!ief e9ecutive and certain e9ecutives of t!e /roup are provided &it! free use of cars and !ouse!old eKuipment. Aggregate amount c!arged in t!ese financial statements for t!e year for fee to - non>e9ecutive directors &as Rs "0- t!ousand D3##6' 0 non>e9ecutive directors Rs 3-- t!ousandE. ""7
Aggregate amount c!arged in t!ese financial statements for t!e year for remuneration of directors is Rs +#.78 million D3##6' Rs )#.-- millionE. :*. CAPACITY Annua! Capai$y A$ua! Pr#du$i#n 5++2 3##6 5++2 3##6 (etric Tons O=n "anu/a$ure 5ome and Personal Care ;9093) -6,7") 350)9; +",+70 2everages ;+0+++ 68,333 :*0*29 )6,860 (illion <itres ,ce Cream 99 07 :1 )+ Annual capacity of beverages &as reduced due to s!ut do&n of t!e ?arac!i Tea %actory. T!e current capacity &as still under utilised as t!e production &as )0.07 metric tons on account of lo&er demand. ;!ereas t!e production capacity of ,ce Cream %actory &as increased due to anticipated !ig!er sales in t!e subseKuent years. Actual production &as )7 million litres only due to lo&er demand. :9. FINANCIA7 INSTRUMENTS Finania! asse$s and !ia.i!i$ies% In$eres$ I Mar< up .earin& N#n@in$eres$ I N#n@"ar< up .earin& TOTA7 Ma$uri$y up Ma$uri$y Su.@$#$a! Ma$uri$y up Ma$uri$y Su.@$#$a! $# #ne year a/$er #ne year $# #ne year a/$er #ne year DRupees in t!ousandE FINANCIA7 ASSETS ,nvestments > > > > 3## 3## 3## <oans and advances to employees > > > -6,"3" "3#,-+- "66,000 "66,000 1eposits > > > ")#,8#8 +,+8# ")-,388 ")-,388 Trade debts > > > 338,60) > 338,60) 338,60) Accrued interest @ mark up > > > ),86+ > ),86+ ),86+ 4t!er receivables > > > "03,086 > "03,086 "03,086 Cas! and bank balances "3),33# > "3),33# "#0,687 > "#0,687 3)#,##7 "3),33# > "3),33# 07#,#+3 "3-,33- 8"-,306 7)8,+86 1ecember )", 3##6 38),0"3 > 38),0"3 -66,))3 "3#,))8 076,06# 78",383 FINANCIA7 7IABI7ITIES Trade and ot!er payables > > > +,"80,8#) > +,"80,8#) +,"80,8#) Accrued interest @ mark up > > > 0+,#6- > 0+,#6- 0+,#6- <iabilities against assets subRect to finance leases )3,)33 66,)36 "#7,0+7 > > > "#7,0+7 S!ort term borro&ings ),3)3,-3) > ),3)3,-3) > > > ),3)3,-3) ),30+,8+- 66,)36 ),)+3,"63 +,3-#,868 > +,3-#,868 6,-7),#-# 1ecember )", 3##6 ++#,8)# -3,7)3 +7),603 +,-#3,373 > +,-#3,373 +,770,#-+ OFF BA7ANCE SHEET ITEMS %inancial Commitments' 4pen letters of credit @ guarantee > > > ",#37,706 > ",#37,706 ",#37,706 > > > ",#37,706 > ",#37,706 ",#37,706 1ecember )", 3##6 > > > ",")#,### > ",")#,### ",")#,### T!e effective interest @ mark up rates for t!e monetary financial assets and liabilities are mentioned in respective notes to t!e financial statements. "3#
Finania! ris< "ana&e"en$ #.Ge$i4es and p#!iies Capi$a! Ris< Mana&e"en$ T!e /roup:s obRectives &!en managing capital are to safeguard t!e /roup:s ability to continue as a going concern in order to provide returns for s!are!olders and benefit for ot!er stake!olders and to maintain an optimal capital structure to reduce t!e cost of capital. 1uring 3##8 t!e /roup:s strategy &as to maintain leveraged gearing. T!e gearing ratios as at 1ecember )", 3##8 and 3##6 &ere as follo&s' 5++2 3##6 DRupees in t!ousandE Total borro&ings :0:350)95 +7),603 E Cas! and 2ank ,5:+0++1- D)#-,##3E .et debt :0))50)*: "88,60# Total eKuity 5053;0)5+ 3,##",""7 /earing ratio ;2B 7$ T!e /roup finances its operations t!roug! eKuity, borro&ings and management of &orking capital &it! a vie& to maintaining an appropriate mi9 bet&een various sources of finance. ,n addition t!e /roup !as been investing !eavily in capital e9penditure &!ic! !as been financed t!roug! debt. i. In$eres$ I "ar< up ra$e ris< T!e /roups income and operating cas! flo&s are substantially independent of c!anges in market interest rates. T!e /roup !as no significant interest bearing assets. /roups liabilities against finance leases and s!ort term borro&ings are at fi9ed @ variable rates. ii. C#nen$ra$i#n #/ redi$ ris< Credit risk represents t!e accounting loss t!at &ould be recognised at t!e reporting date if counter parties failed to perform as contracted. 4ut of t!e total financial assets of Rs 7)8 million D3##6' Rs 78" millionE, t!e financial assets t!at are subRect to credit risk amounted to Rs 337 million D3##6' Rs 3)7 millionE. T!e /roup believes t!at it is not e9posed to maRor concentration of credit risk. To manage e9posure to credit risk, t!e /roup applies credit limits to t!eir customers. iii. 7iAuidi$y ris< Prudent liKuidity risk management implies maintaining sufficient cas! and marketable securities and t!e availability of funding t!roug! an adeKuate amount of committed credit facilities. /roup treasury aims at maintaining fle9ibility in funding by keeping committed credit lines available. "3"
i4. F#rei&n e('an&e ris< "ana&e"en$ %oreign currency risk arises mainly &!ere payables e9ist due to t!e transactions &it! foreign undertakings, specially associated companies. Payables are e9posed to foreign currency risks as currently t!ere is no instrument available in t!e market to !edge t!e foreign currency e9posure. 4. Fair 4a!ues #/ /inania! asse$s and !ia.i!i$ies T!e maRor portion of t!e /roup:s financial instruments is of a s!ort term nature and &ould be settled in t!e near future. T!e carrying values of all financial assets and liabilities reflected in t!e financial statements appro9imate t!eir fair values. %air value is determined on t!e basis of obRective evidence at eac! reporting date. 5++2 3##6 DRupees in t!ousandE :2. CASH AND CASH EFUI8A7ENTS Cas! and bank balances 5:+0++1 )#-,##3 S!ort term borro&ings > s!ort term running finance ,:05:50;5:- D+3),--6E ,:0++50;)3- D""8,---E "33
:1. DETAI7S OF PROPERTY0 P7ANT AND EFUIPMENT DISPOSA7S T!e details of property, plant and eKuipment disposed of during t!e year are given belo&' C#s$ Au"u!a$ed B##< 8a!ue Sa!e M#de #/ Par$iu!ars #/ Pur'aser Depreia$i#nI Pr#eeds Disp#sa! I"pair"en$ DRupees in t!ousandE Plant and mac!inery 8,+-) ),7++ +,-#7 6,06+ .egotiation PT Unilever ,ndonesia Tbk /ra!a Unilever, C.,. Cend /atot Subroto ?av. "-, Cakarta, ,ndonesia. 6-,"-" 07,"#0 0,#+- +7# 4pen 2idding ,mran Ak!tar ?abaria ?ot Abdul (alik <a!ore Road, S!eik!upura. "#,"+# 7,-)) 0#6 06- N (a!boob 2rot!ers, 4pp. T!ana .a&a ?ot, (ain 1!olan&al 2aBar, .ear Qateem ?!ana, <a!ore. +,7#0 +,++0 +0# )"6 N N ),83# ),+80 ))+ 37+ N (r. %aBal ?!an C@o (@S Aadir ?!an 4ld (ac!inery & Scrap 1ealer, <ocated at Plot O 2>30, Street O3, Sector .o.", 5aidery (arket, ?!yaban>e>Sir Syed, Ra&alpindi ),+)6 3,863 -0- "08 N (r. .aeem A!mad, =agel Pak 4verseas (otor, 5ouse O 2@)7), As!raf .agar, .ear Re!mania (asRid, Papos! .agar, ?arac!i. ),)"- 3,)77 7"0 "0) N N 3,783 3,8+# "+3 "70 N (a!boob 2rot!ers, 4pp. T!ana .a&a ?ot, (ain 1!olan&al 2aBar, .ear Qateem ?!ana, <a!ore. 3,+77 3,)#+ "7- "73 P (r. %aBal ?!an C@o (@S Aadir ?!an 4ld (ac!inery & Scrap 1ealer, <ocated at Plot O 2>30, Street O3, Sector .o.", 5aidery (arket, ?!yaban>e>Sir Syed, Ra&alpindi. 3,)83 3,#36 )-- "") P (r. .aeem A!mad, =agel Pak 4verseas (otor, 5ouse O 2@)7), As!raf .agar, .ear Re!mania (asRid, Papos! .agar, ?arac!i. 2alance carried for&ard ""6,#8- "#3,7-6 "+,"38 "#,383 "3)
C#s$ Au"u!a$ed B##< 8a!ue Sa!e M#de #/ Par$iu!ars #/ Pur'aser Depreia$i#nI Pr#eeds Disp#sa! I"pair"en$ DRupees in t!ousandE Plant and mac!inery 2alance broug!t for&ard ""6,#8- "#3,7-6 "+,"38 "#,383 ",8+) ",0+0 "76 ")- 4pen 2idding (r. %aBal ?!an C@o (@S Aadir ?!an 4ld (ac!inery & Scrap 1ealer, <ocated at Plot O 2>30, Street O3, Sector .o.", 5aidery (arket, ?!ayaban>e>Sir Syed, Ra&alpindi 7)8 7)8 > +60 N So!ail A!med & 2rot!ers /odo&n O 36), 1arul A!san To&n Sammundari Road, %aisalabad. ),#0" 73# 3,"+" 3,"+" Claim .P1 %roBen %oods, Plot O A>"" S.,.T.=., Super 5ig!&ay, ?arac!i. "33,736 "#0,+0" "0,+00 "),#)+ =lectrical, (ec!anical and office eKuipment 8),)-3 6#,-#+ "3,8+8 "0,+0+ .egotiation 5e&lett>Packard Pakistan DPvt.E <td. 0+, .aBimuddin Road, %>8, ,slamabad. 3,886 3,-6" )"0 "7 4pen 2idding ,mran Ak!tar ?abaria ?ot Abdul (alik, <a!ore Road, S!eikupura. 80,3)7 6),#6- "),"0+ "0,+8) %urniture and %ittings 3++ )+ 3"# 3"# Company Policy (r. Ayendra Cayesing!e > =9>=9cutive (otor *e!icles 08,#67 "8,8+3 +7,3)6 +7,3)6 .egotiation 5abib 2ank <imited ,.,. C!undrigar Road, ?arac!i ",677 ",#") 680 ",33# Company Policy (r. ?!an ?as!if ?!an > =9>=9ecutive ",-#0 )66 ","37 ",3#- N (r. .aBir A!med > =9>=9ecutive ",)7+ 30" ",")) ",3)) N (r. Ayub *o!ra > =9>=9ecutive ",)7+ 86 ",)#6 ",)3+ N Syed Ga!id 5ussain > =9>=9ecutive ",)60 088 088 7)0 N (r. Umar ?!alid > =9ecutive ",)-- 8+ ",36" ",363 N (r. (ustafa A. ?!an > =9>=9ecutive ",388 88+ +#+ 66) N (r. ,mran 5usain > =9ecutive ",367 +8# 677 70# N (r. Gubair 5asnain > =9ecutive ",3+8 ","6) 6- +0# N (r. Ra!eel A!med Aures!i>=9ecutive ",3"7 0#7 0"# 0-" N (r. Ga!id 5ussain > =9>=9ecutive ",#+) -80 +-6 > N (s. %areena (a!mud 5ameed > =9>=9ecutive 776 7+# -6 +-# N (r. Amin RaBBaK > =9ecutive 8)- 030 3#7 +8# N (r. 5as!im S!ouket > =9ecutive -7- +#7 "80 "6" N (r. 2as!arat A!med > =9 =9ecutive +,### 3,776 ",##) ",0#3 Auction (r. A!med Ali ?!an, 5ouse O 1>8, 2lock 2, .ort! .aBimabad, ?arac!i )0- 3) )+3 )0# ,nsurance Claim .e& Cubilee ,nsurance Company <imited .C, 5ouse, ,.,. C!undrigar Road, ?arac!i. )0- 376 08 )3- N N +#7 -" )-8 +#7 N N 7#,-+0 )#,+36 0#,""7 0),#08 Asse$s 'a4in& .##< 4a!ue !ess $'an Rs. ;+0+++ =lectical and (ec!anica ! ),30" ),3)) 38 ""# (otor *e!icles 0#,3#3 -7,667 +3) 36,63- ;rite off Plant and (ac!inery ","80 ",#68 "#8 > =lectrical, mec!anical and office eKuipment ",--6 ",+)) "3+ > %urniture and %ittings 3,-38 3,)+- "8) > )08,07# 366,80- 7#,83- "3#,0)# "3+
3+. MONOPO7Y CONTRO7 AUTHORITY ORDER ;it! respect to t!e (onopoly Control Aut!ority 4rder dated 1ecember "7, 3##0, terminating t!e non>competition agreement and reKuiring t!e /roup to refund t!e amount of Rs 3-# million to 1alda %oods DPrivateE <imited D1%<E &it!in fifteen days of receipt of t!e 4rder, as disclosed in t!e previous annual financial statements, t!e management, based on legal advice, is of t!e vie& t!at t!e agreement bet&een t!e /roup and 1%< is not in t!e violation of t!e (onopolies and Restrictive Trade Practices 4rdinance "76#. T!e /roup filed an appeal in t!e 5ig! Court against t!e 4rder &!ic! &as admitted and t!e operation of (CA:s order &as stayed. At present, t!e appeal is pending for !earing. 3). CORRESPONDING FIGURES 3).) Prior year:s figures !ave been reclassified for t!e purpose of better presentation and comparison. C!anges made during t!e year are as follo&s' Re!assi/ia$i#n /r#" Re!assi/ia$i#n $# A"#un$ #"p#nen$ #"p#nen$ ,Rupees in $'#usand- Stores and Spares Capital &ork in progress "6,#6) 2ills payable Accrued liabilities +#8,)"6 Creditors Accrued liabilities ""6,38) Auditors remuneration and provision for doubtful debts > trade and ot!ers from ot!er operating e9penses to administrative e9penses' Auditors remuneration Auditors remuneration "#,70+ Provision for doubtful debts Provision for doubtful debts > trade and ot!ers > trade and ot!ers ),8#) 35. DATE OF AUTHORISATION T!ese financial statements &ere aut!orised for issue on %ebruary 0, 3##7 by t!e 2oard of 1irectors of t!e /roup. E'san A. Ma!i< I"ran Husain C!airman & C!ief =9ecutive 1irector "3-
F#r" #/ Pr#(y T'e Sere$ary Uni!e4er Pa<is$an 7i"i$ed A4ari P!aMa0 Fa$i"a Linna' R#ad ?ara'i@9;;:+ ,@ ;e YYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYYson@ daug!ter@ &ife of YYYYYYYYYYYYY, s!are!older of Unilever Pakistan <imited, !olding YYYYYYordinary @ preferences s!ares !ereby appoint YYYYYYYYYYY&!o is my YYYYYYYYYYYY Fstate relations!ip Dif anyE &it! t!e pro9yL reKuired by /overnment regulationsH and t!e son @ daug!ter@ &ife of YYYYYYYYYYYYYYY, D!olding YYYYYYYYYY ordinary @ preference s!ares in t!e Company under %olio .o. YYYYYYYE FreKuired by /overnmentL delete if pro9y is not t!e Companys s!are!oldersH as my @ our pro9y, to attend and vote for me @ us and on my @ our be!alf at t!e Annual /eneral (eeting of t!e Company to be !eld on 8 April, 3##7 and @ or any adRournment t!ereof. Signed t!is YYYYYYYYYY day of YYYYYYYYY 3##7. DSignature s!ould agree &it! t!e specimen signature registered &it! t!e CompanyE Wi$nesses% ".YYYYYYYYYYYYYYYYYY Sign across Rs -@> Revenue Stamp 3.YYYYYYYYYYYYYYYYYY Signature of (emberDsE S!are!olders %olio .o.YYYYYYYYYYYYYYYY and @ or C1C Participant ,.1. .o.YYYYYYY and Sub> Account .o. YYYYYYYYYYYYYYY N#$e% ". T!e (ember is reKuested' DaE to affi9 Revenue Stamp of Rs. -@> at t!e place indicated above. DbE to sign across t!e Revenue Stamp in t!e same style of signature as is registered &it! t!e Company. DcE to &rite do&n !is %olio .umber. 3. ,n order to be valid, t!is pro9y must be received at t!e registered office of t!e company at least +8 !ours before t!e time fi9ed for t!e (eeting, duly completed in all respects. ). C1C S!are!olders or t!eir pro9ies s!ould bring t!eir original .ational ,dentity Card or Passport along &it! t!e Participants ,1 .umber and t!eir Account .umber to facilitate t!eir identification. 1etailed procedure is given in t!e .otes to t!e .otice of A/(.