Rafhan AR 2010

Quality
10 Years at a Glance
Solutions
Team Work
Technology
Innovation
Cu
st
o
Ingredients
er
ac
isf
t
a
n
tio
2010 2009 2008 2007 2006 2005 2004 2003 2002* 2001

Net Sales
13,913
11,428
10,747 7,578 6,127 5,194 4,534 4,031 4,390 3,126
Rs. Million

Cost of Sales
10,615 8,993 8,006 5,480 4,556 3,997 3,259 3,001 3,329 2,345
Rs. Million

Gross Profit
3,298 2,435 2,741 2,098 1,571 1,198 1,275 1,030 1,061 781
Rs. Million

%age of Sales
24 21 26 28 26 23 28 26 24 25

Profit After Tax 1,838
1,297
1,492
1,089 809 615 670 521 527 347
Rs. Million

Capital Expenditure 582 848 606 114 122 302 448 415 239 121
Rs. Million

Dividend Amount 924 831 924 831 647 323 286 259 259 134
Rs. Million

Dividend Percentage 1,000 900
1,000 900 700 350 310 280 280 145

Earnings per Share 198.99 140.43 161.57 117.92 87.62 66.57 72.51 56.43 57.06 37.62
Rupees

* Data for 15 months
Annual Report
for the year ended December 31, 2010
In the name of Allah The Most Merciful, The Compassionate
Contents
02 Company Information
03 Notice of Meeting
06 Chief Executives Review
15 Major Events 2010
16 Horizontal Analysis - P&L and B / S
17 Vertical Analysis - P&L and B / S
18 Directors Report
24 Forward Looking Statements
26 Stakeholders Information
27 Summary of Cash Flow Statements
28 Statement of Value Added & its Distribution
29 Review Report
30 Statement of Compliance
31 Auditors Report
32 Balance Sheet
34 Profit and Loss Account
35 Statement of Comprehensive Income
36 Cash Flow Statement
37 Statement of Changes in Equity
38 Notes to the Financial Statements
61 Pattern of Shareholding

Proxy Form
|1
Company Information
Chairman
John F. Saucier

Vice Chairman
Rashid Ali
-
-
Non-Executive
Non-Executive
Chief Executive & Managing Director

Ansar Yahya
Executive
Directors
Cheryl K. Beebe
-
Mary A. Hynes
-
Zulfikar Mannoo
-
Mian M. Adil Mannoo -
Wisal A. Mannoo
-
Anis A. Khan
-
Sh. Gulzar Hussain -

Chief Financial Officer
Non-Executive
Non-Executive
Non-Executive
Non-Executive
Non-Executive
Executive
Non-Executive
Anis A. Khan

Secretary
Audit Committee
2|
John F. Saucier
Rashid Ali
Ansar Yahya
Anis A. Khan

Shares Transfer Committee
Rashid Ali
Ansar Yahya
Anis A. Khan
Sh. Gulzar Hussain
Bankers
Citibank, N.A.
Habib Bank Ltd.
Meezan Bank Ltd.
MCB Bank Ltd.
National Bank of Pakistan
Standard Chartered Bank (Pakistan) Ltd.

Auditors
KPMG Taseer Hadi & Co.
Chartered Accountants
Lahore Karachi
M. Yasin Anwar
Cheryl K. Beebe
Rashid Ali
Zulfikar Mannoo
Sh. Gulzar Hussain
Business Strategy and

Planning Committee
-
-
-
-
Non-Executive
Non-Executive
Non-Executive
Non-Executive
Legal Advisor
M. Ali Seena
C/o Surridge & Beecheno,
Karachi
Shares Registrar
FAMCO Associates (Pvt.) Ltd.
1st Floor, State Life Building 1-A,
I.I. Chundrigar Road, Karachi-74000:
Tel: (92-21) 32427012 - 32425467
Fax: (92-21) 32426752 - 32428310
Registered Office
1st Floor, Finlay House,
I.I. Chundrigar Road,
Karachi-74000, Pakistan
Ph: (92-21) 32442516 32410848
Fax: (92-21) 32428651
Head Office & Shares Department
Rakh Canal East Road, Faisalabad,
Pakistan
Ph: (92-41) 8540121-22-23
Fax: (92-41) 8711016 - 8502197
Website: www.rafhanmaize.com
E-mail: corporate@rafhanmaize.com
Annual Report
Notice of Meeting
Notice is hereby given that the 118th General Meeting (Annual

Ordinary) of the shareholders of Rafhan Maize Products Co. Ltd.
will be held on Tuesday, March 29, 2011 at 10:00 a.m. at the
Overseas Investors Chamber of Commerce and Industrys Hall,
Talpur Road, Karachi to transact the following business:
1.
To confirm minutes of the last General Meeting (Annual

Ordinary) of the shareholders of the Company held on
Monday, March 29, 2010 at Karachi.
Notes:
1.
The Share Transfer Book of the Company will remain

closed from 21st to 29th March, 2011 (both days
inclusive) and no transfer will be accepted for registration
during this period.
2.
A member entitled to attend, speak and vote at the

meeting shall be entitled to appoint another person as
his/her proxy to attend, speak and vote instead of him/
her, and a proxy so appointed shall have such rights
with respect to attending, speaking and voting at the
meeting as are available to a member. Proxies in order
to be effective must be received by the Company not
less than 48 hours before the meeting. A proxy need
not be a member of the Company. Form of proxy is
attached.
3.
Shareholders are requested to notify change of address,

if any, to Companys Shares Registrar immediately.
4.
CDC shareholders desiring to attend the meeting are

requested to bring their original Computerized National
Identity Cards, Account and Participants ID numbers,
for identification purpose, and in case of proxy, to
enclose an attested copy of his/her CNIC.
2. To receive, consider and adopt the Audited Accounts

of the Company for the year ended December 31,
2010 together with the Directors and Auditors Reports
thereon.
3.
To approve final cash dividend @550% for the year

ended December 31, 2010 as recommended by the
Board of Directors.
4.
To appoint auditors and fix their remuneration. The

present auditors Messrs KPMG Taseer Hadi & Co.,
Chartered Accountants, retire and being eligible, offer
themselves for re-appointment. The Board of Directors,
on recommendations of the Audit Committee, has
proposed appointment of Messrs KPMG Taseer Hadi &
Co., Chartered Accountants for the year 2011.

Karachi
March 7, 2011
By order of the Board

M. Yasin Anwar
Company Secretary
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Vision
To be the Premier Provider of
Refined Agriculturally Based
Products and Ingredients
in the Region.
Mission Statement
To grow business consistently through
positive relationship with customers to
attain full customer satisfaction and to
bring continual improvement by adopting
only those business practices which add
value to our customers, employees and
shareholders.
4|
Annual Report
Safety
Integrity
Quality
Respect
Excellence
Our Core Values
Safety:
Nothing is more important than safety. We have a simple goal: Zero accidents. We have developed
a company-wide safety program that applies to all of our facilities around the world, and we
monitor and measure our safety performance. We will create and maintain an environment where
our people come to work every day trusting that they will be safe, and where our neighbors trust
us to act as a responsible member of their communities.
Quality:
Our focus every day is on quality: Quality of the ingredients we make; of the services we provide;
and of the relationships that we build. When we do things right, our customers and our colleagues
have confidence in us, and that gives us the foundation on which we will continue to build our
Company.
Integrity:
Honesty and trust are the foundations of our business. The people of Corn Products International
will maintain the highest standards of business conduct, not only because it is expected of them,
but because it is the right thing to do. Our customers, employees, shareholders, partners and
neighbors can be confident that they are working with people who stand by their products, live
up to their promises, keep their word, and do business in an honorable fashion.
Respect:
We operate in an environment of openness, teamwork, trust and mutual cooperation. The global
nature of our business and the diversity of our employees are important factors behind our
ongoing success. We will create and maintain a culture where our people listen to and learn from
one another, and where we treat one another with the dignity that all people deserve.
Excellence:
We will relentlessly pursue excellence in all that we do, continuing to find new, innovative solutions
for our customers. We will provide our employees with the tools, training and resources they need
to excel.
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Chief Executives Review
It gives me great pleasure to present the Annual Report

and review of the performance of your Company for
the financial year ended Dec 31, 2010. By the grace of
Almighty Allah, your Company has continued its journey
on the road to excellence during the year 2010 although
the countrys overall economic situation and business
environment made business growth difficult.
ECONOMIC ENVIRONMENT
The year 2010 proved to be very challenging for the
economy of Pakistan. In the beginning of the year, the
economy was on track and performed better than in the
previous year. However, the worst flooding ever damaged
about one fourth of the countrys agriculture heartland
and destroyed over three million bales of cotton resulting
in a cumulative loss of about 1.5% to GDP. The severe
energy crisis continued to impact the manufacturing
sector and overall business activities. Consequently, the
countrys economy continued to remain under stress and
according to the State Banks projections will miss three
targets - GDP growth, fiscal deficit and inflation. Despite
better performance of the services sector, GDP growth is
expected between 2 to 3% against growth target of 4.5%.
Higher cost of imports, energy, commodities products and
rising demand significantly contributed to raise the inflation
to 16%. The task of economic recovery is difficult but the
government is making efforts to restore macroeconomic
stability and the confidence of business.
6|
OPERATING RESULTS

Year ended December 31
2010 2009
Net Sales
Rs. (Million)
13,913
11,428
Net Income after Tax
Rs. (Million)
1,838
1,297
Earnings per Share
Rupees
198.99
140.43
By the grace of Almighty Allah, your Company has made

steady progress in its financial performance and managed
to improve its net sales by 22% as compared to last year.
The profit after tax improved to Rs.1,838 million against
Rs.1,297 million of last year. Your Company retained its
strong position as the supplier of choice by focusing on
good management practices, commitment to quality and
better marketing mix.
BUSINESS REVIEW
Your Company has been engaged in a long journey during
the last several years to achieve excellence and consistent
growth in its business. A major key to our success has
been continuous development of innovative ingredients
to meet our customers requirements while reducing their
cost. Our product portfolio spans three major categories Industrial, Food and Animal Nutrition & Health Ingredients
which are supplied to multiple industries.
Annual Report
Our brands are our customers preferred choices in the

respective categories due to your Companys focus on
the changing needs of our customers. We aim to be real
business partners and solution providers to our customers
through strong business relationships and our continued
quest for innovative ways of doing business in order to
expand into new markets and product applications.
INDUSTRIAL BUSINESS
The Company offers a diversified range of products to the
Industrial sector. The growth in this sector is the result
of sharpening our focus on customers needs, exploring
growth opportunities and promoting timely delivery of
our products across the country. Our diversified range of
regular and modified starches under the brand names of
Rafhan , Penetrose , Amisol , Tex-o-Film and Coratex
are consumed in textile weaving and processing as most
favored ingredients. The textile mills sector has shown
recovery from the global demand recession due to progress
in its export base. However, short availability of cotton
coupled with a drastic increase in prices of cotton yarn, the
liquidity crunch and frequent disruptions in electricity and
gas supply affected the operation of downstream textile
units. Paper and paperboard demand in Pakistan has grown
in line with the overall improvement in educational and
industrial consumption. Large investments are being made
by manufacturers in this sector to enhance the domestic
capacities of quality paper and paperboard to meet the
growing demand, which in turn helped to generate demand
for your Companys Q-Tac starches. The corrugation and

paper sack industries also operated at a normal pace to
cover demand for packaging of industrial, electronics and
food products; creating demand for the sale of Tex-o-Film
and Coragum starches and Dextrins.
We consider diversification of our product-line to be a major
factor for growth and viability in the ever changing market
scenario. Over the years, the Company has continued to
focus on innovation in its product line for the industrial
sector to fulfill the modern needs of our customers for new
applications.
FOOD BUSINESS
Despite a challenging market situation, your Company
was successful in growing the food ingredient business
with proactive strategies, service excellence and efforts
to expand our customer base. The Company successfully
continued to deliver supplies of sweeteners to our
customers despite logistical constraints, through our
coordinated supply chain. The major part of demand came
from the export-led sugar confectionery segment for liquid
glucose. However, small and medium confectioners were
impacted by growing inflationary pressure on input costs,
a rise in utilities prices and frequent power breakdowns.
Our food business is characterized by a diversified portfolio
of customers. Our product-line covers a wide range of
products including Globe and Snowflake starches,
|7
Rafhan Liquid Glucose, Cerelose Dextrose Monohydrate,

Rafhan Liquid Caramel and Golden Syrup. Despite adverse
economic factors, demand from major food industries has
shown marginal improvement. Your Company continued as
a trusted supplier to the food segment. Innovative solutions
provided to the food sector have opened the door for other
opportunities. Your Company remains committed to further
expanding its product-lines for different applications in
food products.
ANIMAL NUTRITION AND HEALTH BUSINESS
The Animal Nutrition ingredients include Prairie Gold
and Rafhan Maize Gluten Meals, Buffalo Maize Bran,
Rafhan Maize Germ Cake, Enzose Hydrol and Rafhan
Crude Corn Oil. This segment delivered good performance
because of stable demand from poultry, livestock and
aquaculture segments. The poultry business has shown
strength despite high inflation. Similarly growth in fish
farming and dairy cattle segments continued to drive
demand.
During the past few years, the dairy sector has shown
progress due to the governments incentives to promote
dairy farming to meet a growing demand for milk and milkbased products. Consequently, the use of formula feed
rations has shown an upward trend.
EXPORTS
Your Company continues to align its strategic plans to take
advantage of emerging global trends and opportunities. In
2010, the Company has made continuous efforts to increase
sales by enhancing its presence in the export markets. At
the same time, we remained focused on fresh challenges
and opportunities within and beyond the territorial
limits of the country. We believe that your Company is
well positioned to take advantage of its experience and
diversified product-line to explore regional markets. At the
same time, our people are constantly engaged in assessing
customers needs and market dynamics in export markets
to develop our core competencies.
RAW MATERIAL - MAIZE
For the past 57 years, your Company has won as one of
the most recognized and respected name among agrobased industries in Pakistan. We were the first Company to
conceptualize and execute the unique idea of spring maize
(corn) cultivation. Throughout this long history, the story of
success still continues. Your Company is committed to play
a leading role in agricultural advancement in Pakistan by
providing integrated solutions and agronomical assistance
to the farming community to meet growing maize
consumption demand in the country. We provide to the
farmers expert advice free of cost through our agricultural
experts who are based in the field. Our maize production
and purchase teams proactively play an integral role by
helping farmers to improve crop yield and productivity by
sharing best practices. Through our agricultural efforts,
we have strategically been able to increase the area under
cultivation in addition to improving the crop yields.
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Annual Report
In our quest for professional excellence, your Company is

striving for continuous improvement in the procurement
process to cope with the present challenging economic
environment where strategic procurement is as important
as strategic selling. With growing demand of maize from
different sectors, the need for quality raw material and
enhancement in yields has become all the more important
for a stable supply chain.
The year under review was not good for maize cultivation.
The spring crop was impacted by unfavorable weather at
the time of pollination, and less availability of water for
irrigation due to power load-shedding. The winter crop was
partly damaged in KP and southern Punjab due to floods.
Lower than target production against strong demand from
livestock and other sectors pushed the price of maize to all
time high level during the year 2010.
INVESTMENT
Your Company has always followed its policy to invest into
new technologies and product innovation which is the core
strength of its business. We are well cognizant of market
needs and changing business dynamics to continuously
enhance our competencies to meet customers needs with
higher product standards. Our goal is to provide customized
solutions to our customers to support market growth.
We are determined to optimize our manufacturing capabilities
and to maintain Companys position as one of the leading
ingredient suppliers. Over the years, the plant capacity
has gradually been increased and your Company now
operates from two locations with sufficient manufacturing
capacity to meet market demand. Construction work on
our third plant in the South region is in progress to meet
the growing demand and potential growth in the Southern
markets. Your Company has embarked upon an expansion
program and spent an amount of Rs. 582 million during the
year 2010.
We are confident that continued investment in our people

and technologies would enable us to achieve our strategic
goals. We shall continue to pursue our expansion and
diversification projects in an anticipation to meet the
growing demand from local resources.
OPERATIONS
Our strategies have repeatedly proven effective at achieving
sustained and quality output from our plants. This is a
result of our commitment towards operational efficiency
of manufacturing facilities. Our plants have shown a
solid production performance over the years driven by
continuous production enhancement, process optimization
and efficiency improvements in all plants. We have
equipped our plants with state-of-the-art facilities which
combine competent people, technology and management
system to achieve profitable growth in line with our growth
strategy from year over year.
Multiple steps were taken to recover production losses due
to energy shortage in the country and several energy saving
measures were taken to improve energy optimization.
Processes were reengineered and employees trained for
coordinated efforts and teamwork to enhance productivity.
Extended electricity and gas load-shedding affected
the overall productivity. Each rupee of the investment
was spent in the right place. However, your Company
maintained its momentum to produce according to market
demand and customer needs which helped maintain market
leadership. The management developed a system for close
monitoring of critical and important operations and took
timely versatile measures to reduce production losses and
improve/maintain efficiency of machines.
INTEGRATED QUALITY AND ENVIRONMENTAL
MANAGEMENT SYSTEM
Quality and Safety are key indicators in our core values
and, therefore, are of high priority at all levels. Quality
|9
management is an integral part of our business strategy.

We have been able to consistently achieve the level of
quality required to satisfy our customers and to pursue
further improvements.
Our quality policy reflects our
commitment to quality. The satisfaction of our customers
is the measure for the quality of our products and services.
We recognize that our strength lies in the strength of
our customers and are committed to provide them with
best quality and service. Product quality is consistently
maintained and monitored at every stage. All processes
are consistently monitored, measured and evaluated to
guarantee a consistent high level of performance. The
Company has already implemented ISO certification at all
departments and facilities. During this year, certification
of QMS to its new version ISO-9001:2008 was achieved
and also qualified for Surveillance Audits of EMS, OHSAS
and Halal certification. Recertification was also achieved
without any non conformity for OHSAS 18001. We endeavor
to maintain this record in the future. The working on
implementation of FSMS ISO-22000 has been completed
and certification process is targeted to be completed by
the end of the current year. Furthermore, in-house training
session and seminars on GMP and HACCP implementation
were held, a step forward to achieve ISO-22000:2005 Food
Safety Management System certification. Besides, we
qualified a number of customers audits from multinational
pharmaceutical and food companies and obtained excellent
ranking which clearly indicate Companys commitment to
its quality management systems.
PRODUCT DEVELOPMENT
Innovation is a key to our success. We consider
diversification of our product-line as a major factor to
continue to compete effectively. There is a constant
endeavor at all levels of the organization to enhance
Companys performance by offering upgraded range of
its products and services. Research and Development is
an integral part of our operations designed to keep pace
with the technological advancement and maintain the
10 |
Companys competitiveness in the market. Our production

facilities are supported by our research and development
team to meet the particular requirements of our customers.
Company R&D capability is one of the principal reasons
for the Companys strong business relationship with our
valued customers. We want our customers to get the best
value of their money spent. Our R&D expertise allows
us to actively engage in business development activities
and makes us enable to identify and enhance the product
portfolio to remain a supplier of choice for our customers.
O C C U PAT I O N A L
HEALTH & SAFETY
Your Company continues
to strive for excellence in
Occupational Health and
Safety. Safety is the most
important and first core
value of the Company.
We are committed to
provide clean, healthy
and
safe
conditions
to
our
employees,
contractors, visitors and
the community in which
we operate. A safety
culture is inculcated
through
employees
participation in training sessions, inspections, audits,
competitions, other activities in compliance with safety
procedures and monthly meetings of Safety Committees.
The landmarks achieved during the year 2010 are as under:

The goal of zero loss time accident during 2010 was

successfully achieved. Over 8.3 million exposure
hours without a lost workday accident were achieved
for Company employees and 6.8 million hours for
contractors employees at Rakh Canal Plant. Over
Annual Report
13.5 million exposure hours without a lost workday

accident have been achieved at Cornwala Plant for
Company and contractors employees.
The following additional actions were taken in the area of

CSR and Sustainability:
The Company contributed Rs.1.9 million to the fund

Safety and Environment Month was observed in
for rehabilitation of flood affected people.
October. Safety slogan for the year was Safety Your
Contributed in the uplift of countrys economy by
Lifes Value - Someone is waiting for You. Practical
providing free agricultural advisory service to the
demonstrations and drills on fire fighting, rescue, firstfarmers of various provinces.
aid and confined space entry were arranged by full
New plant is being set up in the South region for socio
participation of employees in coordination with the
economic uplift of the area.
Civil Defence Department.

Green belts of 49,182 and 32,400 square feet
ENVIRONMENT STEWARDSHIP PROGRAM
developed outside the plants were maintained for

Environment Stewardship Program was continued during

the year 2010. The management maintained its strong
commitment for safe environment in its operations
throughout the years. We continued to demonstrate
our strong sense of responsibility to the society and
environment. Environment slogan for the year was Many
Species, One Planet, One Future. For the second time, the
Company received the Environment Excellence Award
from National Forum for Environment and Health (NFEH)
on account of its excellent environmental initiatives and
successful implementation of environmental management
system. Environment stewardship program was extended
to offices, plants and warehouses to improve overall the
environment.
public use.

248 plants were planted in the green fields of

neighboring farmers during 2010 making the total
1,098 plants.
Public primary school and post office built on your

Companys donated land are being maintained.
37 students of different professional institutions were

provided internship training and trained professionally
and ethically.
CORPORATE SOCIAL RESPONSIBILITY (CSR) AND

SUSTAINABILITY
Your Company is fully conscious of its responsibility
towards communities and sustainable environment. The
most important part of this responsibility is training of
employees on ethical practices, CSR and sustainability to
make them good citizens, act as role model for others and
ambassadors of good practices in the society.
| 11

HR MANAGEMENT AND EMPLOYEES RELATIONS
Our people are our identity and most precious asset. Our
employees team consists of a very dynamic and vibrant
workforce with a positive attitude to face the emerging
challenges. These people are highly professional, ethical
and result oriented. We acknowledge that sustained growth
and excellence depends on the recruitment, development
and retention of competent human resources.
SAP Go Live 5th July 2010
Your Company is recognized as the employer of equal

opportunity in the area with fairly good compensation
and benefits and working conditions.
Employees participation in the community welfare

activities is encouraged.
Green Chemistry - introducing new environment

friendly and bio degradable products for supply to
customers as replacement of synthetic products.
Awareness and participation of employees was

enhanced by observing Earth Day, World Hepatitis
Day and World Environment Day.
A fully equipped dispensary is also maintained to face

any emergency and general health care of employees
and their dependants.
Apprenticeship training is provided to school/college

leaving students for 2 to 3 years - 13 apprentices are
on roll for practical training.
INFORMATION TECHNOLOGY
The Company recognizes information technology is an
essential tool for future progress. Marked efforts have
been made to introduce a streamlined and integrated
IT infrastructure within the organization to support our
growing business needs. We make full use of IT resources
available. The production facilities and our offices in
different locations are connected through dedicated
communication channels.
In line with our Companys vision and the long term
strategy, your Company achieved another milestone by
implementing the world renowned SAP/ERP System.
The project was started in January 2010 and completed
within the seven months planned time. The scope of the
new SAP System covers majority of the business areas like
Financial Accounting, Sales, General Purchase, Materials
Management, Materials Requirement Planning, Production
Planning, Quality Management and Plant Maintenance. The
new system will provide support to the related business
areas to manage and achieve Company goals in more
effective way.
12 |
Focusing on teamwork in all areas of our business is the

key driving force in achieving high performance. Your
Companys workforce works tirelessly to translate its
strength into tangible results. The workforce is spread all
across the country and playing concrete roles to achieve
the Companys goals and targets. The ultimate objective is
to have the right people in the right place, at the right time
with the right pay, and make the Company an employer of
choice.
The Company has taken a number of measures to develop
its employees to meet the challenges of todays competitive
business world. We maintain a robust leadership strategy to
identify and use a systematic approach by providing growth
oriented and varied career opportunities to employees,
thereby obtaining exceptional performance. We recognize
that continuous improvement in management capability is
a vital ingredient for growth.
The Company rewarded its 152 employees for their long
service ranging from 10-40 years. This year, a number
of education scholarships were also given to deserving
children of employees to recognize their efforts in achieving
excellence in education.
TRAINING & MANAGEMENT DEVELOPMENT
Over the years, the Company has maintained a distinctive
corporate culture driven and influenced by our dedicated
and energetic workforce. All Company employees are
given appropriate opportunities for self-development
and career growth. We strongly believe that training and
development is an investment rather than an expense.
Formal assessments are carried out for training needs and
the employees are exposed to various kinds of training,
including, as appropriate, technical courses, management
courses, workshops and seminars both at home and
abroad. Extensive in-house training and development
programs are one of the tools used for development of our
winning team. A number of in-house courses and workshops
were held including
environment
and
safety.
The training program
of the Company is
designed on annual
basis focusing on
the customer and
business needs and
One day Seminar on GMP & HACCP conducted
by Corporate Hygienist, Nestle Pakistan Ltd
Annual Report
challenges. As the year 2010 was full of challenges due to

escalating costs of energy, raw materials and spares, full
emphasis was focused on the cost savings in designing our
in-house training programs by including following topics:
fast growing challenges. Our team members are aware of

their corporate and social responsibilities to promote your
Companys reputation as a model corporate citizen.
VALUES AND BUSINESS CONDUCT POLICIES
1.
2.
3.
4.
5.
6.
Standard Operating Procedures

Control of Critical Parameters
Personal Hygiene at Plant
Data Logging and Analysis
Energy, Water Conservation and Waste Control
Control of Manufacturing Supplies Material
Consumptions
7. Development of Spares and Enhancing their Working
Life
8. Re-engineering of Processes
9. Root Cause Analysis to Improve Efficiency of Equipment
About 200 in-house training sessions were conducted
for 2,144 operators/workers at Faisalabad and Cornwala
Plants. The above mentioned training programs helped
our employees to partially off-set the impact of escalating
costs of inputs by cutting down the manufacturing and
other costs. Training was provided to management and
non-management employees on the following topics:
1.
2.
3.
4.
5.
6.
Management and Technical Skills Development

HACCP and GMP
Zero Defect Production Program
Product Yield Control
Food Product Safety
Vibration Monitoring and Balancing of Rotary
Equipment
7. Electrical Safety and Arc Flash
Your Company is committed to providing its employees
with opportunities for professional skills development
and to enhance their personal capabilities to meet the
Your Companys Core Values and Business Conduct

Policies are critical in establishing an ethical and honest
culture. The training program titled PILLARS-VALUES AND
BUSINESS CONDUCT WORKSHOP continued during the
year and a number of sessions were held to promote the
understanding of the Core Values and their compliance
by employees. The training included all employees, at all
levels of the Company.
BUSINESS RISKS, CHALLENGES AND FUTURE
PROSPECTS
The economic outlook for 2011 remains problematic. Some
of the major challenges are: low growth, high inflation,
rising unemployment, continued fiscal indiscipline, surging
food and energy prices, expensive credit to private sector
and low foreign investment. Whereas a sustained flow of
home remittances from overseas Pakistanis happens to
be a consolation, food and oil imports are likely to put
pressure on the balance of payments. The State Bank of
Pakistan has already revised the inflation rate to 16% which
would continue to impact the cost of production. However,
the performance of the commodity producing sectors of
the economy is expected to improve in the months ahead.
Large scale manufacturing growth is expected to turn
positive as strong agri-prices support demand and with
the additional capacities coming on line in some major
industries. As such the macroeconomic imbalances in the
economy are still manageable provided immediate steps
are taken to implement critical structural adjustments.
Pakistans economy has always shown resilience during
unfavorable business environments and we are hopeful
that the initiatives being taken by the Government and the
| 13

political parties on the agenda for economic reforms would
be helpful in reviving economic growth.
In view of the prevalent market circumstances, the
performance of consuming segments may remain
depressed which may impact overall demand for our
products
especially
from
downstream
consuming
industries. Inflationary pressure on the cost of maize,
utilities and other overhead will continue, however, it may
be difficult to include the total impact of cost increases in
the prices of our products.
The management of your Company is fully aware of
the challenges ahead and is taking measures to face
those challenges by adopting market driven strategies,
optimizing
manufacturing
capabilities,
striving
for
continued differentiation of our products and services and
continuing our operational excellence and prudent use of
our resources. We are confident that our journey on the
track of progress will continue and we will continue to
create value for all our stakeholders.
CORPORATE DISTINCTIONS
Your Company continued to be recognized for high
performance by receiving the Top 25 Companies of
Pakistan Award from the Karachi Stock Exchange for
the fourteenth year in a row. The same was the case with
the Best Corporate Reports Award from the Institute of
Chartered Accountants of Pakistan and Institute of Cost
& Management Accountants of Pakistan, which your
Company has received for the tenth consecutive year.
The Special Merit Trophy Award from the Federation of
Pakistan Chambers of Commerce & Industry for export of
maize derived products was another landmark. In addition
to the above, your Company also received the following
awards and distinctions during the year:
14 |
Corporate Social Responsibility National Excellence

Award 2009.
Annual Award on Best Practices in Occupational

Health, Safety and Environment (OHSE) in a competition
arranged by Employers Federation of Pakistan.
7th Environment Excellence Award 2010 in

a competition arranged by National Forum for
Environment and Health.
1st Global HR Recognition Award 2010 in a

competition arranged by Global Media Links. We
also received special Award for Best Employee
Engagement Strategy.
5th Corporate Social Responsibility National

Excellence Award 2010 in a competition arranged
by Help International.
Corporate Excellence Award from The Management Association of Pakistan
ACKNOWLEDGEMENT
We take this opportunity to thank our valued customers who
have shown great confidence in our products and continue
to provide sustained support in ensuring the progress of
the Company. We also would like to take advantage of
this opportunity to thank our business partners and those
who continue to lead the Company forward with their
support and conviction. We are grateful to the Board of
Directors for their guidance, trust and support in steering
the Company to grow. We also acknowledge the support
and cooperation received from our esteemed suppliers,
dealers, bankers and other stakeholders.
We are also thankful for trust reposed by the shareholders
on the management and the Board of Directors of the
Company. Your Company is immensely proud of its
employees, I would like to take this opportunity to extend
my compliments and gratitude for the devoted and sincere
efforts of employees of the Company at all levels. The
Companys achievement and impressive results have not
been possible without their contributions.
Looking forward, the coming days would be more
challenging. The uncompromising commitment of our
dedicated employees and their efforts will continue, Insha
Allah, to make your Company as one of the PREMIER
PROVIDER OF REFINED AGRICULTURALLY BASED
PRODUCTS AND INGREDIENTS IN THE REGION.
Please join me in praying Almighty Allah to give us courage
and wisdom to face those challenges and work with more
zeal for the prosperity of the Company and to create value
for its stakeholders. Ameen!

Faisalabad
February 14, 2011
Ansar Yahya
Chief Executive and
Managing Director
Annual Report
Rafhan Calendar of Major Events - 2010

January 11
SAP Kick-off Meeting.
March 20
In-house Seminar on Six Sigma for employees.
March 24
Safety Training Program for employees and contractors at Cornwala Plant.
April 23 24
In-house Training Program on Awareness, Implementation & Auditing of ISO 2000:2005 Food Safety
Management System (FSMS) at Cornwala Plant.
April 28
Best Practices in Occupational Safety, Health & Environment (OHSE) Award 2009 from the Employers
Federation of Pakistan and International Labour Organization.
May 27 29
IMS Audit by Moody International Certification for Rakh Canal and Cornwala Plants.
June 14
Hajj balloting was held where 17 lucky winners amongst staff and workers were selected to perform Hajj.
June 30
Safety & Environment Training Program for employees and contractors was held at Cornwala Plant.
July 05
SAP Go-Live Day.
July 08
Global HR Recognition Award 2010 by Global Media Links and Better Pakistan Forum and Special
Award for Best Employee Engagement Strategy.
July 27
Referendum for election of Collective Bargaining Agents (CBA).
August 02
Environment Excellence Award - 2010 from the National Forum for Environment & Health (NFEH).
September 08
Nomination for Top 25 Companies Award by the Karachi Stock Exchange (Guarantee) Ltd.
October 05
Special Merit Export Trophy Award from the Federation of Pakistan Chambers of Commerce & Industry
on export of Corn (Maize) derived products.
October 13
One day seminar on GMP & HACCP Implementation Guidelines (ISO-22000 FSMS) was conducted at
Cornwala Plant.
October 22
Best Corporate Report Award 2009 and got Ist Position in Miscellaneous Sector from the Joint
Committee of Institute of Chartered Accountants of Pakistan and Institute of Cost & Management
Accountants of Pakistan.
October
October was observed as Safety Month at both plants. The safety slogan for the year was Safety,
Your Lifes Value someone is waiting for You.
July November
Pillars - Values and Business Conduct Policies Workshops.
November 17
The Board of Directors of CPI adopted a Resolution in favour of Rafhan Maize Products Co. Ltd.,
Faisalabad Plant for achieving the safety milestone of THREE YEARS without a Lost Workday accident.
November 23
Corporate Excellence Award (Certificate of Excellence in Food Producers Sector) from The
Management Association of Pakistan.
December 05
December 15
Picnic Party of managers/officers and staff.

Nominated for 5th Corporate Social Responsibility National Excellence Award 2010 by CSR
Association of Pakistan.
| 15
Horizontal Analysis of Profit and Loss Account

2010 2009 2008 2007 2006 2005
Sales
122%
106%
142%
124%
Cost of sales
118%
112%
146%
120%
Gross profit
135%
89%
131%
134%
Distribution cost
113%
73%
84%
179%
Administrative expenses
113%
113%
108%
107%
Operating profit
139%
88%
138%
133%
Other operating income
105%
87%
145%
141%
Finance cost
65%
135%
306%
58%
Other operating expenses
138%
88%
137%
135%
Profit before taxation
139%
88%
137%
134%
Taxation
135%
89%
136%
134%
Profit after taxation
142%
87%
137%
135%

(Note: 2004 has been taken as base year and percentage variations have been worked out on year on year basis.)
118%
114%
131%
128%
105%
135%
95%
247%
145%
131%
131%
132%
115%
123%
94%
142%
119%
89%
147%
162%
82%
91%
89%
92%
Horizontal Analysis of Balance Sheet

2010 2009 2008 2007 2006 2005
NON CURRENT ASSETS

Property, plant and equipment
Intangible assets
Capital work-in-progress

Employees retirement benefits
Long term loans
123%

98%
114%

196%
103%

566%
112%

33%
113%

55%
91%
38%
411%
82%
22%
451%
75%
54%
290%
58%
94%
103%
90%
112%
268%
120%
1055%
115%
191%
6%
99%
48%
92%
48%
85%
102%
4905%
128%
177%
105%
143%
123%
1609%
4%
125%
117%
123%
197%
84%
104%
129%
109%
84%
123%
152%
100%
48%
1631%
114%
116%
130%
72%
75%
300%
44%
138%
100%
134%
112%
100%
113%
151%
96%

96%
101%

130%
13970%

107%
3%

99%
61%

113%
1245%
102%
86%
143%
188%
143%
84%
201%
Deferred taxation

SHARE CAPITAL AND RESERVES
135%
111%
93%
133%
132%
94%
Share capital
Reserves

TOTAL LIABILITIES

100%
124%
100%
112%
100%
119%
100%
111%
100%
107%
100%
114%
138%
100%
134%
112%
100%
113%
CURRENT ASSETS
Stores and spares
Stock in trade
Trade debts
Loans and advances
Trade deposits and prepayments
Other receivables
Cash and bank balances

TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Mark up accrued on short term running finances
Short term running finances - secured
(Refer note below)
Provision for taxation
NON CURRENT LIABILITIES
Note:
1. No percentage has been worked out where there were no figures in current or corresponding year.
2.
16 |
2004 has been taken as base year and percentage variations have been worked out on year on year basis.
Annual Report
Vertical Analysis of Profit and Loss Account

Sales
Cost of sales
Gross profit
Distribution cost
Operating profit
Finance cost
Taxation
2010 2009 2008 2007 2006 2005

100.0%
76.3%
23.7%
0.9%
1.5%
21.2%
0.6%
0.2%
1.5%
20.1%
6.9%
13.2%
100.0%
78.7%
21.3%
1.0%
1.6%
18.6%
0.7%
0.4%
1.3%
17.6%
6.3%
11.3%
100.0%
74.5%
25.5%
1.5%
1.5%
22.5%
0.8%
0.3%
1.6%
21.4%
7.5%
13.9%
100.0%
72.3%
27.7%
2.5%
2.0%
23.2%
0.8%
0.2%
1.6%
22.2%
7.8%
14.4%
100.0%
74.4%
25.6%
1.7%
2.3%
21.6%
0.7%
0.3%
1.5%
20.4%
7.2%
13.2%
100.0%
76.9%
23.1%
1.6%
2.6%
18.8%
0.9%
0.2%
1.2%
18.3%
6.5%
11.8%
Vertical Analysis of Balance Sheet

NON CURRENT ASSETS

Intangible assets

Long term loans

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

TOTAL ASSETS
CURRENT LIABILITIES
Short term running finances - secured

Deferred taxation

SHARE CAPITAL AND RESERVES
Share capital
Reserves

TOTAL LIABILITIES
2010 2009 2008 2007 2006 2005
29.9%
0.4%
13.4%
33.3%

18.6%
29.4%

9.5%
38.1%

2.3%
38.2%

7.7%
33.6%
14.0%
0.9%
0.0%
0.3%
0.1%
1.4%
0.0%
2.4%
0.0%
0.9%
0.1%
1.0%
0.1%
4.3%
43.1%
5.2%
1.7%
0.4%
0.2%
0.5%
5.2%
22.0%
5.9%
0.2%
0.4%
1.2%
12.7%
5.3%
45.5%
6.5%
0.5%
0.5%
1.2%
0.3%
5.5%
34.5%
8.3%
0.4%
0.5%
0.1%
7.7%
5.0%
32.8%
7.6%
0.2%
0.7%
0.1%
6.7%
4.6%
39.1%
6.1%
0.2%
0.7%
0.2%
0.4%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
15.3%
0.1%
8.7%
2.8%
14.0%
0.2%
0.0%
5.5%
14.6%
0.2%
9.3%
3.9%
14.8%
0.0%
0.0%
2.0%
15.7%
0.1%
0.0%
1.5%
15.8%
0.1%
5.4%
1.8%
4.8%
5.0%
4.5%
6.4%
5.4%
4.1%
1.3%
67.0%
1.8%
74.6%
1.8%
66.7%
2.3%
74.4%
2.6%
74.7%
2.6%
70.1%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
| 17
Directors Report
The Directors of your Company feel pleasure in presenting the annual audited accounts
along with auditors report thereon for the year ended December 31, 2010.
Financial Results
Profit and Appropriations

Year ended December 31
2010


Actuarial gains/(losses) of employees
retirement benefits
2009
(Rupees in Thousands)
1,837,937
1,297,080
31,861
(36,513)
Un-appropriated profit brought forward
3,877,272 3,447,983
5,747,070
4,708,550
Appropriations

Final Dividend 2009 @400%
(2008: @400%)
369,457
369,457
1st Interim Dividend 2010 @350%
(2009: @250%)
323,275
230,911
2nd Interim Dividend 2010 @250% (2009: @250%)
230,911
230,910
923,643
831,278
4,823,427
3,877,272
Un-appropriated Profit
Earnings per Share (Rupees)

198.99
140.43
The Directors of the Company endorse the contents of the Chief Executives Review
which cover your Companys business review, salient activities in different fields of
operations, outlook and investment plans for strategic growth.
Distribution of Sales
(Percentage)
8.40%
73.40%
Corporate Governance
Your Company is committed to maintain high standards of good corporate governance
without any exception. The Directors are pleased to state that your Company is compliant
with the provisions of the Code of Corporate Governance as required by SECP and
formed as part of stock exchanges listing regulations. The statement of compliance with
Code of Corporate Governance is annexed.
Disclosures under Code of Corporate Governance
Corporate and Financial Reporting Framework
(a) The financial statements prepared by the management of the Company, fairly present
state of its affairs, the result of its operations, cash flow and changes in equity.
(b) Proper books of accounts of the Company have been maintained.
(c) Appropriate accounting policies have been consistently applied in preparation of
financial statements and accounting estimates are based on reasonable and prudent
judgment.
13.21%
4.75%
0.01%
0.23%
(d) International Accounting Standards, as applicable in Pakistan, have been followed in

preparation of financial statements and any departure there from has been adequately
disclosed.
(e) The system of internal control is sound in design and has been effectively implemented
and monitored.
(f)
Material & Services

Taxation
Dividend & Retention
18 |
Employee Cost
Finance Cost
Society Welfare
There are no significant doubts upon the Companys ability to continue as a going
concern.
(g) There has been no material departure from the best practices of corporate governance
as detailed in the listing regulations.
Annual Report
Key operating and financial data of last six years are as follows:

2010
2009 2008 2007 2006 2005

Net Sales
(RsMio)
13,913
11,428
10,747
7,578
6,127
5,194
Cost of Sales
(RsMio)
10,615
8,993
8,006
5,480
4,556
3,997
Gross Profit
(RsMio)
3,298
2,435
2,741
2,098
1,571
1,198
%age of Sales
24
21
26
28
26
23
Operating Profit
(RsMio)
2,955
2,131
2,415
1,755
1,321
978
%age of Sales
21
19
22
23
22
19
Profit Before Tax
(RsMio)
2,800
2,012
2,299
1,681
1,252
953
Profit After Tax
(RsMio)
1,838
1,297
1,492
1,089
809
615
Earnings per Share
Rupees
198.99
140.43
161.57
117.92
87.62
66.57
Dividend Amount
(RsMio)
924
831
924
831
647
323
1,000
900
1,000
900
700
350
582
848
606
114
122 302
Dividend Percentage
Capital Expenditure
(RsMio)
Ten Years Performance showing key indicators has been given on the inside cover sheet of this report.
Sales
(Rupees in Million)
2010
13,913
2009
11,428
2008
10,747
2007
7,578
2006
6,127
2005
5,194
0
3000
6000
9000
12000
15000
Profit after Tax

(Rupees in Million)
2010
1.838
2009
1,297
2008
1,492
2007
1,089
2006
809
2005
615
0
500
1000
1500
2000
| 19
Directors Report
Value of investments of employees retirement funds:

Provident Fund
Gratuity Fund
Superannuation Fund

2010
2009
Rs. in million
as at June 30
as at December 31
as at December 31
622.891
507.583
298.473
683.457
464.553
271.036
Board of Directors
The Board of Directors comprises two executive and eight non-executive directors. The
current members of the Board of Directors have been listed in the Company Information.
During the year under review, no casual vacancy occurred on the Board.
Attendance at Board Meetings
During the year ended December 31, 2010, four meetings of Board of Directors were held
and attended as follows:
Name of
No. of meetings

Name of Director
Alternate Director
John F. Saucier
M. Maqbool Ahmad
Rashid Ali
Ansar Yahya
Cheryl K. Beebe
S. Yousuf Hashmi
Mary A. Hynes
Abdul Khalil
Zulfikar Mannoo

Mian M. Adil Mannoo
Wisal A. Mannoo
Anis A. Khan
Sh. Gulzar Hussain
attended
4
3
4
3
4
4
2
3
4
3
Transactions in Companys Shares

CEO, Directors, CFO, Company Secretary and their spouses and minor children have
made no transactions in the Companys shares during the year except as stated below:

No. of Shares
Purchased
Mr. Rashid Ali

Mr. Zulfikar Mannoo
Mian M. Adil Mannoo
Mr. Wisal A. Mannoo
Sh. Gulzar Hussain
Vice Chairman
Director
Director
Director
Director
Parent Company
Corn Products International, Inc., USA is holding majority shares of the Company.
20 |
265
100
1,451
3,055
924
Annual Report
Directors Report
Earnings Per Share
(Rupees)
2010
198.99
2009
140.43
2008
161.57
2007
117.92
2006
87.62
66.57
2005
0
50
100
150
200
Capital Expenditure
(Rupees in Million)
2010
582
2009
848
2008
606
2007
114
2006
122
302
2005
0
200
400
Auditors
The retiring auditors, Messrs KPMG Taseer Hadi & Co., Chartered
Accountants, being eligible, offer themselves for re-appointment.
The Board of Directors, on recommendations of Audit Committee,
has proposed appointment of Messrs KPMG Taseer Hadi & Co.,
Chartered Accountants for the year 2011.
Audit Committee
The Board of Directors has established an Audit Committee in
compliance with the Code of Corporate Governance with the
following members Cheryl K. Beebe
Chairperson
Rashid Ali
Member
Zulfikar Mannoo Member
Sh. Gulzar Hussain Member
(Non Executive Director)

Four meetings of the Audit Committee were held during the year.
The Audit Committee reviewed the quarterly, half yearly and annual
financial statements before submission to the Board and their
publication. CFO, Head of Internal Audit and a representative of
external auditors attended all the meetings where issues relating
600
800
1000
to accounts and audit were discussed. The Audit Committee

also reviewed internal audit findings and held separate meetings
with internal and external auditors as required under the Code
of Corporate Governance. The Audit Committee also discussed
with the external auditors their letter to the management. Related
Parties Transactions were also placed before the Audit Committee.
The Audit Committee has fully adopted the terms of reference as
specified in Code of Corporate Governance.
Business Strategy & Planning Committee
The Board of Directors has established Business Strategy &
Planning Committee comprising of following Board members John F. Saucier Chairman
Rashid Ali
Vice Chairman
Ansar Yahya Member
Anis A. Khan Member
During the year, three meetings of the Committee were held.
The Committee has to keep a vigilant eye on the Companys
performance and work out strategy for enhancement of its
business.
| 21
Directors Report
Shares Transfer Committee
The Board of Directors has established Shares Transfer Committee
comprising of following Board members Rashid Ali Chairman
Ansar Yahya Member
Anis A. Khan Member
Sh. Gulzar Hussain Member
Ten meetings of the Shares Transfer Committee were held during
the year. The Committee met from time to time to consider
and approve valid transfers and transmissions of shares or any
business related thereto.
Corporate Executive Management Committees
In order to strengthen team spirit and encourage participation
in management decisions, following Corporate Executive
Management Committees have been formed Executive Management Committee
Ansar Yahya
Anis A. Khan
M. Saleem Rana

Chief Financial Officer & Director
Director Operations, Safety & Environment
All business decisions are finalized by this team. This committee

collaborates to achieve and improve overall performance of
the Company, develop and implement approved business plan
objectives and strategies, identify potential problems, monitor
investment projects, review expenditures, identify opportunities/
projects and implement good governance throughout Rafhan
Maize.
Business Strategy Committee
Ansar Yahya
Anis A. Khan
M. Saleem Rana
Abdul Khalil
Deputy Director Finance
Muhammad Sarwar Deputy Director Marketing &

Business Development
Terms of Reference:

To consider all matters pertaining to Companys operations,

day-to-day affairs requiring collective wisdom of the senior
management.
Preparation of annual business plan, budget, operational
model and structure.
Evaluate market, financial and operational risks, threats and
opportunities and devise ways to mitigate the effects of risks
on Companys performance efficiently and effectively.
Monitor performance against achievement of goals.
Provides inputs on new initiatives, products and projects.
Remuneration & Compensation Committee:

Ansar Yahya
Anis A. Khan
22 |

M. Saleem Rana
M. A. Haq Siddiqui Senior Manager HR & Admin.
Terms of Reference:
The Company believes in happy and satisfied workforce. In order
to ensure recruitment of dedicated and devoted employees and
also retain existing ones, the responsibility of this committee is to
formulate and implement packages for new employees, consider
promotions of existing workforce through prescribed appraisal
forms and review their remunerations.
Crisis Management Committee:
Ansar Yahya
Anis A. Khan
M. Saleem Rana
Director Operations, Safety & Evironment
Muhammad Sarwar Deputy Director Marketing & Business
Development
S. Raza Haider
Plant Manager
Iftikhar Anwer Khan P&A & Commercial ManagerSouth Region
M. A. Haq Siddiqui Senior Manager HR & Admin.
M. Yasin Anwar
Company Secretary & Compliance Officer
M. Farooq A. Mian Manager Warehouses & Stores
Terms of Reference:

To assure that Rafhan Maize can effectively manage any

unexpected crisis.
To prepare Company as thoroughly as possible in advance
for any crisis; whether involving personnel, plant, product,
natural disaster or any unexpected event of similar nature.
Compliance of Crisis Management Procedures as per
Companys Crisis Management Manual and Emergency
Action Plans.
Systems & Information Technology Committee

Ansar Yahya
Anis A. Khan
M. Saleem Rana
M. Tayyab Raza

Chief Information Manager (IT)
Terms of Reference:
Rapid changes and improvements are taking place in the IT
world. The role of the committee is to adopt latest technologies
and modern systems for overall improvement in the IT area.
Policies on Business Conduct Compliance Committee:
Ansar Yahya
Anis A. Khan
M. Saleem Rana
Muhammad Sarwar

M. A. Haq Siddiqui
M. Yasin Anwar
Iftikhar Hussain

Deputy Director Marketing &
Business Development
Senior Manager HR & Admin.
Company Secretary & Complaince Officer
Internal Auditor
Annual Report
Terms of Reference:

Effective communication of Policies on Business Conduct

and Core Values.
Review of implementation and compliance of Company
policies.
Promote compliance and investigate violation of policies, if
any.
Recommend appropriate disciplinary actions for violation of
policies, if any.
In addition to Corporate Executive Committees, Divisional

Committees have also been formed which meet once in a month to
review the performance of the respective divisions and find ways and
means to further improve and achieve even better results. The Team
Leaders are responsible to hold the meetings of the Committees.
Divisional Committees include 1. Finance & IT Committee
2. CAPEX & Projects Review Committee
3. Human Resources Committee
4. Manufacturing Optimization and Regulatory Affairs
Committee
5. Supply Chain Task Force
6. Quality Excellence Committee
7. Business Segmentation & New Ingredients Development
Committee
One sub-committee under Finance & IT and one under Manufacturing
Optimization and Regulatory Affairs have been formed. Moreover,
following three additional sub-committees have also been formed to
include the bottom line management in decisions making
1. Logistics & Inventory Control
2. Quality
3. Products Development
Provided sites to a local bank, government primary school

and a post office to facilitate service to the general public.
- Provides financial support to the government school.
-
Fully equipped dispensaries at Rakh Canal Plant, Faisalabad
and Cornwala Plant, Jaranwala are being maintained.
- Plantation drive at the plants and surrounding agri fields to
protect the environment.
- Scholarships provided to various talented students to
promote higher education.
- Promoting maize cultivation in Punjab, Sindh and KP to
enhance agri-based contribution to national economy.
-
Several cost and energy savings measures have been taken.
- Integrated Management System (IMS) has four international
certifications which include QMS, EMA, OHSMS and HALAL
2009.
-
Safety slogan for 2010 was Safety, Your Lifes Value. Safety
month was observed during 2010.
- Rs.1.5 million donated to Chief Ministers Fund for Flood
Relief and Rehabilitation.
- Internship provided to 37 students from professional
institutions during 2010.
- Installation of water pumps alongside Rakh Canal for free
supply of drinking water to the local community.
Dividend
The Company has already paid two interim dividends of 350% and
250%. The Directors now propose a final dividend of 550% making
the total 1150% for the year.

Faisalabad
February 14, 2011
On behalf of the Board
Ansar Yahya
Chief Executive and
Managing Director
Pattern of Shareholding
Pattern of Shareholding as on December 31, 2010 according to
requirements of Code of Corporate Governance and a statement
reflecting distribution of shareholding appears at the end of this
report.
Contribution to National Exchequer
Your Company has contributed Rs.1,773 million (2009:Rs.1,299
million) during the year 2010 to the national exchequer on payments
towards sales tax, income tax, import duties and statutory levies.
An amount of Rs.129 million (2009: Rs.131million) was also paid as
withholding income tax deducted by the Company from shareholders,
employees, suppliers and contractors.
Corporate Social Responsibility
Your Company is fully aware of its responsibilities being a responsible
corporate citizen. Detailed steps with figures have been mentioned in
the Chief Executives Review. A few steps taken by the Company are
being given below
| 23
24
Forward Looking Statements
24 |
This Annual Report contains or may contain forward looking
in worldwide markets for corn and other commodities, and the
statements.
forward-looking
associated risks of hedging against such fluctuations; fluctuations
statements to be covered by the safe harbor provisions for such
in the markets and prices for our co-products, particularly
statements. These statements include, among other things, any
corn oil; fluctuations in aggregate industry supply and market
The
Company
intends
these
predictions regarding the Companys prospects or future financial
demand; the behavior of financial markets, including foreign
condition, earnings, revenues, tax rates, capital expenditures,
currency fluctuations and fluctuations in interest and exchange
expenses or other financial items, any statements concerning
rates; continued volatility and turmoil in the capital markets; the
the Companys prospects or future operations, including
commercial and consumer credit environment; general political,
managements plans or strategies and objectives therefor and any
economic, business, market and weather conditions in the various
assumptions, expectations or beliefs underlying the foregoing.
geographic regions and countries in which we manufacture and/or
These statements can sometimes be identified by the use of
sell our products; future financial performance of major industries
forward looking words such as may, will, should, anticipate,
which we serve, including, without limitation, the food and
believe,
beverage, pharmaceuticals, paper, corrugated, textile and brewing
plan,
project,
estimate,
expect,
intend,
continue, pro forma, forecast or other similar expressions
industries; energy costs and availability, freight
or the negative thereof. All statements other than statements of
costs, and changes in regulatory controls regarding quotas, tariffs,
historical facts in this report or referred to in or incorporated by
duties, taxes and income tax rates; operating difficulties; boiler
and shipping
reference into this report are forward-looking statements. These
reliability; our ability to effectively integrate and operate acquired
statements are based on current expectations, but are subject to
businesses, including National Starch; labor disputes; genetic and
certain inherent risks and uncertainties, many of which are difficult
biotechnology issues; changing consumption preferences and
to predict and are beyond our control. Although we believe our
trends; increased competitive and/or customer pressure in the
expectations reflected in these forward-looking statements are
corn-refining industry; and the outbreak or continuation of serious
based on reasonable assumptions, stockholders are cautioned
communicable disease or hostilities including acts of terrorism. Our
that no assurance can be given that our expectations will prove
forward-looking statements speak only as of the date on which
correct. Actual results and developments may differ materially from
they are made and we do not undertake any obligation to update
the expectations expressed in or implied by these statements,
any forward-looking statement to reflect events or circumstances
based on various factors, including the effects of global economic
after the date of the statement as a result of new information or
conditions and their impact on our sales volumes and pricing of
future events or developments. If we do update or correct one
our products, our ability to collect our receivables from customers
or more of these statements, investors and others should not
and our ability to raise funds at reasonable rates; fluctuations
conclude that we will make additional updates or corrections.
| 25
Stakeholders Information
Six Years Summary
2010 2009 2008 2007 2006 2005
Investors Information
Gross profit ratio
Percentage
23.70
21.31
25.51
27.69
25.64
23.06
EBITDA margin to Sales
Percentage
21.48
19.35
23.03
24.14
23.84
21.76
Net profit to Sales
Percentage
13.21
11.35
13.89
14.37
13.21
11.84
Return on assets
Percentage
25.32
24.73
28.54
27.60
22.95
17.44
Return on equity
Percentage
41.02
34.20
45.20
37.87
30.59
25.52
Return on capital employed
Percentage
34.64
30.39
39.13
33.23
27.75
22.69
Weighted average cost of debt
Percentage
13.35
13.73
12.66
8.91
9.28
6.17
Inventory turnover ratio
Times
3.09
6.23
2.98
3.47
3.41
2.60
No. of days in inventory
Days
118.12
58.59
122.48
105.19
107.04
140.38
Debtors turnover ratio
Times
36.91
36.24
31.28
23.08
22.97
24.01
No. of days in receivables
Days
9.89
10.07
11.67
15.81
15.89
15.20
Creditors turnover ratio
Times
9.58
12.25
10.45
9.30
8.24
7.18
No. of days in payables
Days
38.10
29.80
34.93
39.25
44.30
50.84
Operating cycle
Days
61.31
63.89
77.78
73.43
85.11
96.38
Total assets turnover ratio
Times
1.92
2.18
2.06
1.92
1.74
1.47
Fixed assets turnover ratio
Times
6.40
6.47
6.92
5.05
4.56
4.38
Current ratio
Times
2.05
2.53
2.19
3.38
3.08
2.21
Quick/ Acid test ratio
Times
0.30
1.05
0.29
1.01
0.89
0.33
Price earning ratio
Times
10.60
10.57
14.74
19.12
10.27
10.52
100.00
90.00
100.00
90.00
70.00
35.00
Cash dividend per share
Rupees
Bonus shares issued
Percentage
Dividend yield ratio
Percentage
5.00
6.00
4.00
4.00
8.00
5.00
Dividend payout ratio
Percentage
50.25
64.09
61.89
76.32
79.89
52.58
Dividend cover ratio
Times
1.99
1.56
1.62
1.31
1.25
1.90
Debt : Equity ratio

Interest cover
Times
-
89.75
-
42.26
-
64.65
-
143.38
-
62.38
116.33
Break-up value per share - Refer note below

- Without surplus on revaluation of fixed assets Rupees
536.34
433.91
387.43
327.58
295.21
277.72
- Including the effect of surplus on revaluation

of fixed assets
Rupees
536.34
433.91
387.43
327.58
295.21
277.72
Market value per share
Rupees
2,109.87
1,485.00
2,381.42
2,255.00
900.00
700.00
Market value per share during the year (High)
Rupees
2,298.00
2,262.35
2,940.00
2,415.00
918.00
700.00
Market value per share during the year (Low)
Rupees
1,100.00
1,286.87
2,300.00
945.00
700.00
594.00
Earnings before interest, taxes, depreciation

and amortization (EBITDA)
Rs. Mio
2,989.07
2,211.54
2,475.27
1,829.73

Note: The Company has not carried out any revaluation, hence there is no surplus on revaluation of fixed assets.
26 |
1,460.72
1,130.22
Annual Report
Summary of Cash Flow Statement

2010 2009 2008 2007 2006 2005

Cash flow from operating activities
(Rupees in Thousand)
232,457
2,830,047
741,549
1,011,781
1,179,228
599,956

Cash flow from investing activities
(577,499)
(846,392)
(604,368)
(111,239)
(119,926)
(299,500)

Cash flow from financing activities
(288,480)
(1,324,451)
(429,291)
(831,423)
(837,449)
(318,987)
(633,522)
659,204
(292,110)
69,119
221,853
(18,531)
Opening cash and cash equivalents
673,409
13,730
305,420
236,295
14,484
33,062

Effect of exchange rate fluctuations
(146)
475
420
(42)
(47)

Closing cash and cash equivalents
39,741
673,409
13,730
305,420
236,295
14,484
| 27
Statement of Value Added and its Distribution

2010
2009
(Rupees in thousand)

VALUE ADDED
Net sales
Material and services
Other income

DISTRIBUTION
13,912,769
11,428,104
(10,137,486)
(8,536,013)
83,104
79,259
3,858,387
2,971,350
661,374
17.1
608,737
20.5
31,548
0.8
48,766
1.6
Tax
962,052
24.9
714,784
24.0
Workers profit participation fund
150,198
3.9
108,072
3.6
EMPLOYEES AS REMUNERATION
Salaries, wages and amenities
FINANCIAL CHARGES TO PROVIDERS OF FINANCE

Finance Cost
GOVERNMENT AS TAXES
Workers welfare fund

56,245
1.5
47,500
1.4
1,168,495
30.3
864,356
29.0
923,643
23.9
831,278
28.0
1,500
0.1
1,500
157,533
4.1
150,911
SHAREHOLDERS AS DIVIDEND
Cash dividend
SOCIETY WELFARE
Donation to flood / earthquake victims
0.1
RETAINED WITHIN THE BUSINESS

Depreciation / amortization
Retained profit
28 |
5.1
914,294
23.7
465,802
15.7
1,071,827
27.8
616,713
20.8
3,858,387
100
2,971,350
100
Annual Report
Review Report to the Members
on Statement of Compliance with Best Practices of Code of Corporate Governance
We have reviewed the Statement of Compliance with the best
terms equivalent to those that prevail in arms length transactions
practices contained in the Code of Corporate Governance
and transactions which are not executed at arms length price
prepared by the Board of Directors of Rafhan Maize Products
recording proper justification for using such alternate pricing
Company Limited (the Company) to comply with the Listing
mechanism. Further, all such transactions are also required to be
Regulations of Karachi and Lahore Stock Exchanges.
separately placed before the audit committee.
The responsibility for compliance with the Code of Corporate
We are only required and have ensured compliance of requirement
Governance is that of the Board of Directors of the Company. Our
to the extent of approval of related party transactions by the Board
responsibility is to review, to the extent where such compliance
of Directors and placement of such transactions before the audit
can be objectively verified, whether the Statement of Compliance
committee. We have not carried out any procedures to determine
reflects the status of the Companys compliance with the provisions
whether the related party transactions were under taken at arms
of the Code of Corporate Governance and report if it does not. A
length price.
review is limited primarily to inquiries of the Company personnel

and review of various documents prepared by the Company to
Based on our review nothing has come to our attention which
comply with the Code. As part of our audit of financial statements
causes us to believe that the Statement of Compliance does not
we are required to obtain an understanding of the accounting and
appropriately reflect the Companys compliance, in all material
internal control systems sufficient to plan the audit and develop
respects, with the best practices contained in the Code of
an effective audit approach. We have not carried out any special
Corporate Governance as applicable to the Company for the year
review of the internal control system to enable us to express an
ended 31 December 2010.
opinion as to whether the Boards statement on internal control

covers all controls and the effectiveness of such internal controls.
Further, Sub-Regulation (xiii a) of Listing Regulation No.35
(previously Regulation No.37) notified by The Karachi Stock
Exchange (Guarantee) Limited vide circular KSE/N-269 dated 19
Lahore
January 2009 requires the Company to place before the Board
February 14, 2011
of Director for their consideration and approval of related party

(Bilal Ali)
transactions distinguishing between transactions carried out on

| 29
Statement of Compliance
with the Code of Corporate Governance -Year ended December 31, 2010
This statement is being presented to comply with the Code of

Corporate Governance contained in Listing Regulation No.35
of Karachi Stock Exchange (Guarantee) Limited and Chapter XI
of Lahore Stock Exchange (Guarantee) Limited for the purpose
of establishing a framework of good governance, whereby the
company is managed in compliance with the best practices of
corporate governance.
The Company has applied the principles contained in the Code in
the following manner:
1. The Company encourages representation of independent
non-executive directors and the Board has 8 independent
non-executive directors including 3 directors representing
minority shareholders.
2.
The directors of the Company have confirmed that none

of them is serving as a director in more than ten listed
companies, including this Company.
3. All the resident directors of the Company are registered as

taxpayers and none of them has defaulted in payment of
any loan to a banking company. None of our directors is a
member of Stock Exchange.
4. No casual vacancy occurred in the Board during the year
under review.
5. The Company has prepared a Statement of Ethics and
Business Practices, which has been signed by all the
directors and employees of the Company.
6.
The Board has developed a vision/mission statement, overall

corporate strategy and significant policies of the Company.
A complete record of particulars of significant policies along
with the dates on which they were approved or amended has
been maintained.
7. All the powers of the Board have been duly exercised and
decisions on material transactions, including appointment
and determination of remuneration and terms and conditions
of employment of the CEO and other executive directors,
have been taken by the Board.
13. The CEO, directors, and executives do not hold any interest
in the shares of the Company other than that disclosed in the
pattern of shareholding.
14. The Company has complied with all the corporate and
financial reporting requirements of the Code.
15. The Board has formed an audit committee comprising of four
non-executive directors as members including the chairman
of the committee.
16. The meetings of the audit committee were held at least once
every quarter prior to approval of interim and final results of
the Company and as required by the Code. The terms of
reference of the committee have been formed and advised to
the committee for compliance. The related party transactions
were placed before the audit committee and approved by the
board of directors. All transactions were made at arms length
basis under Comparable Uncontrolled Price Method.
17. The related party transactions have been placed before the
audit committee and approved by the board of directors
to comply with the requirements of Listing Regulations of
Karachi and Lahore Stock Exchanges.
18. The Board has set-up an effective internal audit function. The
Internal Auditor is suitably qualified and experienced for the
purpose and is conversant with the policies and procedures
of the Company. The Internal Auditor is involved in internal
audit function on a full time basis.
19. The statutory auditors of the Company have confirmed
that they have been given a satisfactory rating under the
Quality Control Review program of the Institute of Chartered
Accountants of Pakistan, that they or any of the partners of
the firm, their spouses and minor children do not hold shares
of the Company and that the firm and all its partners are in
compliance with International Federation of Accountants
(IFAC) guidelines on code of ethics as adopted by Institute of
Chartered Accountants of Pakistan.
8. The meetings of the Board were presided over by the

Chairman, and in his absence, by the Vice Chairman, and
in their absence by a director elected by the Board for this
purpose and the Board met at least once in every quarter.
Written notices of the Board meetings, along with agenda
and working papers, were circulated at least seven days
before the meetings. The minutes of the meetings were
appropriately recorded and circulated within stipulated time.
20. The statutory auditors or the persons associated with them

have not been appointed to provide other services except
in accordance with the listing regulations and the auditors
have confirmed that they have observed IFAC guidelines in
this regard.
9. The Directors of the Board were apprised of their duties and

responsibilities from time to time during Board meetings.
10. The Board approves appointment of CFO, Company Secretary

and Head of Internal Audit, including their remuneration and
terms and conditions of employment, as determined by the
CEO. However, there was no new appointment against these
posts during the year.
11. The directors report for the year has been prepared in
compliance with the requirements of the Code and fully
describes the salient matters required to be disclosed.
30 |
12. The financial statements of the Company were duly endorsed

by CEO and CFO before approval of the Board.
21. We confirm that all other material principles contained in the

Code have been complied with.

Faisalabad
February 14, 2011
On behalf of the Board
Ansar Yahya
Chief Executive and
Managing Director
Annual Report
Auditors Report to the Members

We have audited the annexed balance sheet of Rafhan Maize
profit and loss account, cash flow statement, statement of
Products Co. Ltd. (the company) as at 31 December 2010
comprehensive income and statement of changes in equity
and the related profit and loss account, cash flow statement,
together with the notes forming part thereof conform with
statement of comprehensive income and statement of changes
approved accounting standards as applicable in Pakistan,
in equity, together with the notes forming part thereof, for the year
and, give the information required by the Companies
then ended and we state that we have obtained all the information
Ordinance, 1984, in the manner so required and respectively
and explanations which, to the best of our knowledge and belief,
give a true and fair view of the state of the Companys affairs
were necessary for the purposes of our audit.
as at 31 December 2010 and of the profit, its comprehensive

income, its cash flows and changes in equity for the year then
It is the responsibility of the Companys management to establish
ended; and
and maintain a system of internal control, and prepare and present

the above said statements in conformity with the approved
d) in our opinion Zakat deductible at source under the Zakat
accounting standards and the requirements of the Companies
and Ushr Ordinance, 1980(XVIII of 1980), was deducted
Ordinance, 1984. Our responsibility is to express an opinion on
by the Company and deposited in the Central Zakat Fund
these statements based on our audit.
established under section 7 of that Ordinance.

We conducted our audit in accordance with auditing standards as

applicable in Pakistan. These standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the above said statements are free of any material misstatement.
Lahore
An audit includes examining, on a test basis, evidence supporting
February 14, 2011
the amounts and disclosures in the above said statements.

(Bilal Ali)
An audit also includes assessing the accounting policies and

significant estimates made by management, as well as, evaluating
the overall presentation of the above said statements. We believe
that our audit provides a reasonable basis for our opinion and,
after due verification, we report that:
a)
in our opinion, proper books of account have been kept by

the Company as required by the Companies Ordinance,
1984;
b)
in our opinion:
i)
the balance sheet and profit and loss account together

with the notes thereon have been drawn up in conformity
with the Companies Ordinance, 1984, and are in
agreement with the books of account and are further
in accordance with accounting policies consistently
applied;
ii)
the expenditure incurred during the year was for the

purpose of the Companys business; and
iii) the business conducted, investments made and the

expenditure incurred during the year were in accordance
with the objects of the Company;
c) in our opinion and to the best of our information and

according to the explanations given to us, the balance sheet,
| 31
Balance Sheet
As at 31 December 2010
Note 2010
2009
( Rupees in thousands)
NON CURRENT ASSETS

2,174,145
1,765,365
Intangible assets
29,392
Capital work in progress
973,017
987,851
3,176,554
2,753,216
64,800
15,784
Long term loans secured
2,920
3,564

Current assets

Stores and spares
10
310,521
277,972
Stock in trade
11
3,125,746
1,166,118
Trade debts
12
376,923
315,365
Loans and advances
13
124,966
11,840
Trade deposits and short term prepayments
14
25,522
22,227
Other receivables
15
12,254
6,416
16
39,741
673,409
4,015,673
2,473,347
1,108,503
734,202
8,298
8,601
634,460
Current liabilities

Short term running finances secured
17

18
203,047
235,057
1,954,308
977,860
Working capital
2,061,365
1,495,487
5,305,639
4,268,051
351,754
260,321
4,953,885
4,007,730

Total capital employed


Deferred taxation
19

NET CAPITAL EMPLOYED
The annexed notes 1 to 39 form an integral part of these financial statements.

Anis Ahmad Khan

Director
32 |
Ansar Yahya
Chief Executive &
Managing Director
Zulfikar Mannoo
Director
Annual Report
Note 2010
2009
Represented by:

Share capital and reserves

Share capital
20
92,364
92,364
Reserves
21
4,861,521
3,915,366

Contingencies and commitments
22
4,953,885
4,007,730

Anis Ahmad Khan

Director
Ansar Yahya
Chief Executive &
Managing Director
Zulfikar Mannoo
Director
| 33
Profit and Loss Account

for the year ended 31 December 2010
Note
2010
2009
Sales - Net
23
13,912,769
11,428,104
Cost of sales
24
(10,615,033)
(8,992,742)
3,297,736
2,435,362
Gross profit

Distribution cost
25
(131,768)
(116,884)
26
(211,092)
(187,535)
(342,860)
(304,419)
Operating profit
2,954,876
2,130,943
27

Finance cost
28
83,104
79,259
3,037,980
2,210,202
(31,548)
(48,766)
29
(206,443)
(149,572)
(237,991)
(198,338)
2,799,989
2,011,864
30
(962,052)
(714,784)
1,837,937
1,297,080
Taxation

Earnings per share - Basic and diluted (Rupees)
31 198.99 140.43

Anis Ahmad Khan

Director
34 |
Ansar Yahya
Chief Executive &
Managing Director
Zulfikar Mannoo
Director
Annual Report
Statement of Comprehensive Income

Note 2010
2009
Profit for the year 1,837,937 1,297,080

Other comprehensive Income:

Acturial gain / (loss) of retirement benefits recognized directly in equity
49,016
(56,173)
Deferred tax on acturial gain / (loss) recognized directly in equity
(17,155)
19,660
Total comprehensive income for the year 1,869,798 1,260,567

Anis Ahmad Khan

Director
Ansar Yahya
Chief Executive &
Managing Director
Zulfikar Mannoo
Director
| 35
Cash Flow Statement

Note
2010
2009
Cash flows from operating activities

Profit before tax

2,799,989
2,011,864
Adjustment for non-cash charges and other items:

Depreciation
157,026
150,911

Amortisation of intangible asset
507

Provision for employees retirement benefits

23,438
18,089

Provision for doubtful debts
2,471
780

Provision for obsolete inventory
8,210
3,579

Profit on sale of property, plant and equipment

(2,561)
(4,727)

Interest income
(6,685)
(4,303)

Finance cost
31,548
48,766

Gain on foreign exchange transactions
146
(475)

Markup capitalized
20,751
35,458
Operating profit before working capital changes
3,034,840
2,259,942

(Increase) / decrease in current assets:

Stores and spares
(40,759)
(1,783)

Stock in trade
(1,959,628)
1,239,944

Trade debts
(64,029)
27,459

Loans and advances
(113,293)
13,587

(3,295)
4,029

Other receivables
(5,838)
(1,034)

(2,186,842)
1,282,202

Increase / (decrease) in current liabilities:

373,598
(32,258)
Net (increase) / decrease in working capital (1,813,244) 1,249,944

Cash generated from operations

1,221,596
3,509,886

Taxes paid
(919,784)
(581,908)

Employees retirement benefits paid

(23,438)
(18,089)

Interest received
6,685
4,303

Finance cost paid
(52,602)
(84,145)

(989,139)
(679,839)
Net cash generated from operating activities
232,457
2,830,047
Cash flows from investing activities

Capital expenditure incurred
(581,897)
(847,507)

Sale proceeds from sale of property, plant and equipment
3,587
4,822

Long term loans disbursed
(1,500)
(4,826)

Repayment from long term loans
2,311
1,119
Net cash used in investing activities (577,499) (846,392)

Cash flows from financing activities

Dividend paid
(922,940)
(830,742)


634,460
(493,709)
Net cash used in financing activities
(288,480) (1,324,451)
Net (decrease)/increase in cash and cash equivalents (633,522) 659,204
Cash and cash equivalents at the beginning of the year
673,409
13,730
Effect of exchange rate fluctuations on cash and cash equivalents
(146) 475
Cash and cash equivalents at the end of the year
16 39,741
673,409

Anis Ahmad Khan

Director
36 |
Ansar Yahya
Chief Executive &
Managing Director
Zulfikar Mannoo
Director
Annual Report
Statement of Changes in Equity

Capital Reserves
Share
capital
Unappropriated Total
Share
premium
Balance as at 31 December 2008
Revenue Reserves
Other
General
profit
92,364
36,946
941
207
3,447,983
3,578,441

Total comprehensive income for the year
1,260,567
1,260,567
92,364
36,946
941
207
4,708,550
4,839,008
Final dividend 2008 @ Rs. 40 per share
(369,457)
(369,457)
Ist interim dividend @ Rs. 25 per share
(230,911)
(230,911)
2nd interim dividend @ Rs. 25 per share
(230,910)
(230,910)
(831,278)
(831,278)
92,364
36,946
941
207
3,877,272
4,007,730

Transactions with owners of the Company,
recognised directly in equity

Total comprehensive income for the year

1,869,798
1,869,798
92,364
36,946
941
207
5,747,070
5,877,728
Transactions with owners of the Company,

recognised directly in equity
Final dividend 2009 @ Rs. 40 per share
(369,457)
(369,457)
Ist interim dividend @ Rs. 35 per share
(323,275)
(323,275)
2nd interim dividend @ Rs. 25 per share
(230,911)
(230,911)
(923,643)
(923,643)
92,364
36,946
941
207
4,823,427
4,953,885

Anis Ahmad Khan

Director
Ansar Yahya
Chief Executive &
Managing Director
Zulfikar Mannoo
Director
| 37
Notes to the Financial Statements

The Company and its operations
Rafhan Maize Products Company Limited (the Company) is incorporated in Pakistan and is listed on the Karachi and Lahore
Stock Exchanges. Corn Products International Inc. Chicago, U.S.A, holds majority shares of the Company. The registered office of
the Company is located at Finlay House, I.I. Chundrigar Road, Karachi.
The Company uses maize as the basic raw material to manufacture and sell a number of industrial products, principal ones
being industrial starches, liquid glucose, dextrose, dextrin and gluten meals.

Basis of preparation
2.1
Statement of compliance
These financial statements have been prepared in accordance with approved accounting standards as applicable
in Pakistan and the requirements of Companies Ordinance, 1984. Approved accounting standards comprise of such
International Financial Reporting Standards (IFRSs) issued by the International Accounting Standard Board and Islamic
Financial Reporting Standards (IFAs) issued by the Institute of Chartered Accountants of Pakistan as are notified under
the provisions of the Companies Ordinance, 1984. Wherever, the requirements of the Companies Ordinance, 1984 or
directives issued by the Securities and Exchange Commission of Pakistan differ with the requirements of these standards,
the requirements of Companies Ordinance, 1984 or the requirements of the said directives shall prevail.

Standards and amendments to published approved International Financial Reporting Standards not yet
effective
2.2

The following standards, amendments and interpretations of approved accounting standards will be effective for accounting
periods beginning on or after January 01, 2011. These standards are either not relevant to the Companys operations or
are not expected to have a significant impact on the Companys financial statements other then increase in disclosures in
certain cases:
Amendment to IAS 32 - Financial Instruments: Presentation Classification of Rights Issues (effective for annual periods
beginning on or after February 01, 2010). The IASB amended IAS 32 to allow rights, options or warrants to acquire a fixed
number of the entitys own equity instruments for a fixed amount of any currency to be classified as equity instruments
provided the entity offers the rights, options or warrants pro rata to all of its existing owners of the same class of its own
non-derivative equity instruments. This interpretation has no impact on the Companys financial statements.

IFRIC 19 - Extinguishing Financial Liabilities with Equity Instruments (effective for annual periods beginning on or after July
01, 2010). This interpretation provides guidance on the accounting for debt for equity swaps. This interpretation has no
impact on Companys financial statements.

IAS 24 - Related Party Disclosures (revised 2009) effective for annual periods beginning on or after January 01, 2011. The
revision amends the definition of a related party and modifies certain related party disclosure requirements for governmentrelated entities. The amendment would result in certain changes in disclosures.

Amendments to IFRIC 14 IAS 19 - The Limit on a Defined Benefit Assets, Minimum Funding Requirements and their
Interaction (effective for annual periods beginning on or after January 01, 2011). These amendments remove unintended
consequences arising from the treatment of prepayments where there is a minimum funding requirement. These
amendments result in prepayments of contributions in certain circumstances being recognised as an asset rather than an
expense. This amendment is not likely to have any impact on Companys financial statements.

Improvements to IFRSs 2010 In May 2010, the IASB issued improvements to IFRSs 2010, which comprise of 11
amendments to 7 standards. Effective dates, early application and transitional requirements are addressed on a standard
by standard basis. The majority of amendments are effective for annual periods beginning on or after January 1, 2011. The
amendments include list of events or transactions that require disclosure in the interim financial statements and fair value
of award credits under the customer loyalty programmes to take into account the amount of discounts or incentives that
otherwise would be offered to customers that have not earned the award credits. Certain of these amendments will result
in increased disclosures in the financial statements.
38 |
Amendments to IFRS 7 - Disclosures Transfers of Financial Assets (effective for annual periods beginning on or after July
1, 2011). The amendments introduce new disclosure requirements about transfers of financial assets including disclosures
for financial assets that are not derecognised in their entirety; and financial assets that are derecognised in their entirety but
Annual Report

for which the entity retains continuing involvement. This amendment is not likely to have any impact on Companys financial
statements.
3
Basis of measurement
These financial statements have been prepared under the historical cost convention, except for recognition of certain employees
retirement benefits at present value.

4
Summary of significant accounting policies

4.1
Trade debts
Trade debts are carried at original invoice amount less an estimate made for doubtful debts based on a review of all
outstanding amounts at the year end. Bad debts are written off when identified.

4.2
Revenue recognition
Sale of goods
Revenue represents the fair value of the consideration received or receivable for goods sold, net of discounts and sales
tax. Revenue is recognized when it is probable that the economic benefits associated with the transaction will flow
to the Company and the amount of revenue, and the associated cost incurred, or to be incurred, can be measured
reliably.
Revenue from sales is recognized upon transfer of significant risks and rewards of ownership of the goods to buyers i.e.
dispatch of goods to customers.

Interest
Income from bank deposits and loans is recognized on accrual basis.

Taxation

4.3
Income tax expense comprises current and deferred tax. Income tax is recognized in profit and loss except to the extent
that it relates to items recognized directly in equity, in which case it is recognized in equity.

Current

Provision of current tax is based on the taxable income for the year determined in accordance with the prevailing law for
taxation of income. The charge for current tax is calculated using prevailing tax rates or tax rates expected to apply to the
profit for the year if enacted after taking into account tax credits, rebates and exemptions, if any. The charge for current
tax also includes adjustments, where considered necessary, to provision for tax made in previous years arising from
assessments framed during the year for such years.

Deferred

Deferred tax is accounted for using the balance sheet liability method in respect of all temporary differences arising from
differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax
bases used in the computation of the taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary
differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available
against which the deductible temporary differences, unused tax losses and tax credits can be utilised.

Deferred tax assets and liabilities are calculated at the rates that are expected to apply to the period when the asset is
realized or the liability is settled, based on the tax rates (and tax laws) that have been enacted or substantively enacted by
the balance sheet date. Deferred tax is charged or credited in the income statement, except in the case of items credited
or charged to equity in which case it is included in equity.

4.4
Earning per share
The Company presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by
dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary
shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary
shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential
ordinary shares.
| 39

4.5
Operating segments
The financial statements have been prepared on the basis of a single reportable segment.

96.46% (2009: 97.46%) out of total sales of the Company relates to customers in Pakistan.
All non current assets of the Company as at 31 December 2010 are located in Pakistan.

4.6
Property, plant and equipment except freehold land are stated at cost less accumulated depreciation and any identified
impairment loss. Freehold land is stated at cost less any identified impairment loss. Cost in relation to certain property, plant
and equipment signifies historical cost and borrowing costs as referred to in note 4.16.

Depreciation on property, plant and equipment is provided on a straight-line-basis. Rates of depreciation, which are
disclosed in note 5, are designed to write off the cost over the estimated useful lives of the assets. Depreciation methods,
residual values and useful lives of the assets are reviewed at least at each financial year end and adjusted if impact on
depreciation is significant.

Depreciation on additions to property, plant and equipment is charged from the month in which the asset is acquired or
capitalised, while no depreciation is charged for the month in which the asset is disposed off.

The Company assesses at each balance sheet date whether there is any indication that property, plant and equipment
may be impaired. If such indication exists, the carrying amounts of such assets are reviewed to assess whether they are
recorded in excess of their recoverable amount. Where carrying values exceed the respective recoverable amount, assets
are written down to their recoverable amounts and the resulting impairment loss is recognised in income currently. The
recoverable amount is the higher of an assets fair value less costs to sell and value in use. Where an impairment loss
is recognised, the depreciation charge is adjusted in the future periods to allocate the assets revised carrying amount
over its estimated useful life.

Subsequent costs are included in the assets carrying amount or recognised as a separate asset, as appropriate, only
when it is probable that future economic benefits associated with the item will flow to the company and the cost of the item
can be measured reliably. All other repair and maintenance costs are charged to income during the period in which they
are incurred.

The gain or loss on disposal or retirement of an asset represented by the difference between the sale proceeds and the
carrying amount of the asset is recognised as an income or expense.

4.7
Intangible assets
4.8

4.9
40 |
The Company reviews the rate of amortization and value of intangible assets for possible impairment on an annual basis.
Any change in the estimates in future years might affect the carrying amounts of intangible assets with a corresponding
affect on the amortization charge and impairment.

Capital work in progress and stores held for capital expenditure are stated at cost less any identified impairment loss
and represents expenditure incurred on property, plant and equipment during the construction and installation. Cost also
includes applicable borrowing costs. Transfers are made to relevant property, plant and equipment category as and when
assets are available for use.

Retirement and termination benefits
Defined contributions scheme
The Company operates a defined contribution approved provident fund for all its eligible employees, in which the Company
and the employees make equal monthly contributions at the rate of 14% of basic salary including dearness allowance of
employees.
Defined benefits schemes
The Company also maintains an approved gratuity fund for all its employees and an approved pension fund for officers and
above-grade employees, having a service period of minimum 10 years.

Annual Report

The contributions are made to pension and gratuity funds in accordance with the actuarys recommendations based on
the actuarial valuation of these funds as at 31 December 2010.

The future contribution rates of these funds include allowances for deficit and surplus. Projected unit credit method is used
for valuation of these funds based on the following significant assumptions:

Gratuity Fund
Pension Fund

2010
2009
2010
2009

Discount rate
14.50%
12.75%
14.50%
12.75%

Expected return on plan assets
13.50%
13%
13.50%
13%

Contribution rates (% of basic salaries)
6%
6%
16%
11%

Annual increase in pension rate

5%
5%

Expected rate of growth per annum in

future salaries
14.50%
12.75%
14.50%
12.75%

The actuarial gains and losses are recognized in the period in which they occur directly in shareholders equity and
presented in the statement of comprehensive income.

4.10 Compensated absences

The Company accounts for compensated absences on the basis of unavailed earned leave balance of each employee at
the end of the year.

4.11 Stores and spares

These are valued at lower of cost, which is calculated according to moving average method, and net realizable value.
Stores in transit are valued at invoice value including other charges, if any, incurred thereon.

4.12 Stocks in trade

Stocks in trade have been valued at the lower of cost and net realizable value. Net realizable value signifies the estimated
selling price in the ordinary course of the business less estimated costs to complete and to make the sale.

Cost has been determined as follows:

Raw materials
Moving average cost

Work in process
Moving average cost

Finished goods
Moving average cost

The variance between standard and actual cost on work in process and finished goods is charged to cost of sales.

4.13 Research and development cost

Research and development costs are charged to profit and loss account in the year in which these are incurred.

4.14 Foreign currencies

All monetary assets and liabilities in foreign currencies are translated into rupees at exchange rates prevailing at the
balance sheet date. Transactions in foreign currencies are translated into rupees at exchange rates prevailing at the date
of transaction. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency
are translated into rupees at exchange rates prevailing at the date of transaction. Non-monetary assets and liabilities
denominated in foreign currency that are stated at fair value are translated into rupees at exchange rates prevailing at the
date when fair values are determined. Exchange gains and losses are included in the income currently.
4.15 Cash and cash equivalents

For the purpose of cash flow statement, cash and cash equivalents comprise of cheques in hand, cash and bank
balances.
| 41

4.16 Borrowing costs

Borrowing costs incurred on related property, plant and equipment are capitalized till the date of commissioning. All other
borrowing costs are included in the profit and loss of the period on an accrual basis.
4.17 Provisions

Provisions are recognized when the Company has a legal or constructive obligation as a result of past events and it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable
estimate of the amount can be made. However, provisions are reviewed at each balance sheet date and adjusted to reflect
current best estimate.
4.18 Financial assets and liabilities

Financial assets and liabilities are recognized when the Company becomes a party to the contractual provisions of the
instrument. All financial assets and liabilities are initially measured at cost, which is the fair value of the consideration given
and received respectively. These financial assets and liabilities are subsequently measured at fair value, amortised cost or
cost, as the case may be. The particular measurement methods adopted are disclosed in the individual policy statements
associated with each item.

4.19 Off-setting of financial assets and financial liabilities

A financial asset and a financial liability is offset and the net amount is reported in the balance sheet if the Company has a
legally enforceable right to set-off the recognized amounts and intends either to settle on a net basis or to realize the asset
and settle the liability simultaneously.
4.20 Trade and other payables

Financial liabilities are initially recognized at fair value plus directly attributable cost, if any, and subsequently at amortized
cost using effective interest rate method.
Other amounts payable are carried at cost which is the fair value of the consideration to be paid in future for goods and
services.
4.21 Impairment losses

Financial assets
A financial asset is considered to be impaired if objective evidence indicate that one or more events had a negative effect
on the estimated future cash flow of that asset.

An impairment loss in respect of a financial asset measured at amortized cost is calculated as a difference between
its carrying amount and the present value of the estimated future cash flows discounted at the original effective interest
rate. An impairment loss in respect of an available-for-sale financial asset is calculated by reference to its current fair
value.

Individually significant financial assets are tested for impairment on a individual basis. The remaining financial assets are
assessed collectively in groups that share similar credit risk characteristics.
Non financial assets
The carrying amounts of the Companys non-financial assets, other than biological assets, investment property, inventories
and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If
any such indication exists then the assets recoverable amount is estimated. For goodwill and intangible assets that have
indefinite lives or that are not yet available for use, recoverable amount is estimated at each reporting date.

An impairment loss is recognized if the carrying amount of an asset or its cash-generating unit exceeds its recoverable
amount. A cash-generating unit is the smallest identifiable asset group that generates cash flows that largely are independent
from other assets and groups.
42 |
Annual Report

Impairment losses are recognized in profit and loss. Impairment losses recognized in respect of cash-generating units are
allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount
of the other assets of the unit on a pro-rata basis.
4.22 Derivative financial instruments

These are initially recorded at fair value on the date a derivative contract is entered into and are re-measured to fair value
at subsequent reporting dates. The method of recognizing the resulting gain or loss depends on whether the derivative
is designated as a hedging instrument, and if so, the nature of the item being hedged. The Company designates certain
derivatives as cash flow hedges.

The Company documents at the inception of the transaction the relationship between the hedging instruments and hedged
items, as well as its risk management objective and strategy for undertaking various hedge transactions. The Company
also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used
in hedging transactions are highly effective in offsetting changes in cash flow of hedged items. Derivatives are carried as
assets when fair value is positive and liabilities when the fair value is negative.
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges are
recognized in equity. The gain or loss relating to the ineffective portion is recognized immediately in the profit and loss
account.
Amounts accumulated in equity are recognized in profit and loss account in the periods when the hedging items will effect
profit or loss. However, when the forecast hedged transaction results in the recognition of a non-financial asset or a liability,
the gains and losses previously deferred in equity are transferred from equity and included in the initial measurement of the
cost of the asset or liability.
Any gain or loss from change in fair value of derivatives that do not qualify for hedge accounting are taken directly
to profit and loss account.

4.23 Related party transactions

Transactions with related parties are priced at comparable uncontrolled market price except for the assets sold to
employees under the employees car scheme as approved by the board of directors.
Parties are said to be related if they are able to influence the operating and financial decisions of the Company and vice
versa.
4.24 Dividends

Dividend distribution to the shareholders is recognized as a liability in the period in which it is approved by the shareholders.
| 43


Reconciliation of net carrying value
Particulars

Reconciliation of gross carrying value
Net book value

Disposals (at
Depreciation
as at 1 January
Additions

NBV)
charge
2010
Net book value

Accumulated
Net book value Depreciation
Cost as at 31
as at 31
depreciation as at
as at 31
rate (% per
December 2010
December 2010
31 December 2010 December 2010
annum)
Rupees in thousands
Rupees in thousands

Freehold land
265,322
86,865
352,187
352,187
352,187
Factory building on freehold land
317,652
35,737
(55,435)
297,954
747,294
(449,340)
297,954
10
Plant, machinery and equipment
1,105,812
424,690
(83,172)
1,447,330
2,729,757
(1,282,427)
1,447,330
Other machinery and equipment
26,530
1,202
(1,220)
26,512
53,079
(26,567)
26,512
Furniture, fixture and office
equipment
14,307
9,519
(4,921)
18,905
59,459
(40,554)
18,905
20
Automobiles
35,742
8,819
(1,026)
(12,278)
31,257
85,564
(54,307)
31,257
20
1,765,365
566,832
(1,026)
(157,026)
2,174,145
4,027,340
(1,853,195)
2010
Reconciliation of net carrying value
Particulars

Reconciliation of gross carrying value
Net book value

Disposals (at
Depreciation
as at 1 January
Additions

NBV)
charge
2009
2,174,145
Net book value

Accumulated
Net book value Depreciation
Cost as at 31
as at 31
depreciation as at
as at 31
rate (% per
December 2009
December 2009
31 December 2009 December 2009
annum)
Rupees in thousands
Rupees in thousands

Freehold land
265,322
265,322
265,322
265,322
Factory building on freehold land
260,595
108,218
(51,161)
317,652
711,557
(393,905)
317,652
10
Plant, machinery and equipment
960,842
227,585
(82,615)
1,105,812
2,313,782
(1,207,970)
1,105,812
Other machinery and equipment
23,599
4,643
(1)
(1,711)
26,530
51,877
(25,347)
26,530
Furniture, fixture and office
equipment
10,170
8,099
(3)
(3,959)
14,307
49,941
(35,634)
14,307
20
Automobiles
32,628
14,670
(91)
(11,465)
35,742
82,973
(47,231)
35,742
20
1,553,156
363,215
(95)
(150,911)
1,765,365
3,475,452
(1,710,087)
1,765,365
2009

5.1
The cost of fully depreciated assets which are still in use is Rs. (thousands) 689,858 (2009: Rs. (thousands) 701,077).

Note
2010
5.2 Depreciation charge for the year has been allocated as follows:
Cost of sales
Distribution cost
24
25
26
2009
5.3
145,768
4,859
6,399
140,628
4,503
5,780
157,026
150,911
Disposal of property, plant and equipment

Book Sale

Description
Sold to
Cost
value
Proceeds
Profit
Mode of disposal
Automobile New Jubilee Insurance Company
3rd Floor, Jubilee Insurance House
I.I. Chundrigar Road, Karachi.
1,239
1,002
237
1,239 1,002 1,239
Above represents sale of assets with book value of more than Rs. (thousand) 50.
Note
1,239
Claim
237
2010
2009
6 Intagible assets

SAP computer software and implementation
Gross carrying value basis

Cost
29,899

Amortisation
6.1
(507)

29,392

Rate of amortisation
20%
44 |
6.1
The software represents financial accounting software which has been acquired during the current year. The
amortisation of the software represents the total amortisation charged during the current year which is equal to
accumulated amortisation.
Annual Report

7.
Capital work in progress

Cornwala/
Mehran
projects
Plant
expansion
projects
Others
2010
2009
Civil works and buildings
306,015
327
306,342
235,702
Plant and machinery
653,375
6,486
659,861
472,929

Project stores

272,406
Advance for land - note 7.2
6,814
6,814
6,814
2010
959,390
6,813
6,814
973,017
987,851
2009
978,769
2,268
6,814

7.1
Cornwala/Mehran projects include markup amounting to Rs. (thousands) 20,751 (2009: Rs. (thousands) 35,458)
capitalized during the year at the rate ranging from 12.63% to 14.84% per annum (2009: 11.64% to 16.75%).

7.2
This represents full payment of Rs. (thousands) 1,814 (2009: Rs. (thousands) 1,814) and legal cost incurred
Rs. (thousands) 5,000 (2009: Rs. (thousands) 5,000) for the Companys factory land in Faisalabad which was acquired
from the government in 1953 but registration of title is still pending in the name of Company.
8.

2010
Note
Gratuity
8.1
Pension
8.1
92,030
2009
8.1
(27,230)
64,800
83,988
(68,204)
15,784
Movements in the net assets/(liabilities) recognized in the balance sheet are as follows:
Gratuity
2010 2009
Pension
2010 2009
Net assets/(liabilities) at the
beginning of the year
83,988
89,746
(68,204)
(17,789)
Expenses recognized
(8,043)
(8,090)
(15,395)
(9,999)
Contribution paid
8,043
8,090
15,395
9,999
Actuarial loss recognized
8,042
(5,758)
40,974
(50,415)
Net assets/(liabilities)
92,030
83,988
(27,230)
(68,204)
at the end of the year
8.2
The amounts recognized in the profit and
loss account are as follows:
Current service cost
19,185
20,613
7,852
7,517
Interest cost
48,341
60,633
42,482
38,679
(59,483)
(73,156)
(34,939)
(36,197)
8,043
8,090
15,395
9,999
| 45

Gratuity
2010 2009
8.3
The amounts recognized in the balance

sheet are as follows:

8.4

Present value of the obligation

Fair value of plan assets
Net asset/(liability)

8.5
Present value of defined benefit obligation

as at the beginning of the year

8.6
Fair value of plan asset as at the

beginning of the year
Expected return on assets
Actual contribution by the employer
Actual paid during the year
Actuarial gain on plan asset
Fair value of plan asset as at the
end of the year
(415,553)
507,583
92,030
(380,565)
464,553
83,988
(325,703)
298,473
(27,230)
(339,240)
271,036
(68,204)
380,565
492,403
339,240
260,636
19,185
48,341
(23,257)
(9,281)
20,613
60,633
(195,573)
2,489
7,852
42,482
(19,986)
(43,885)
7,517
38,679
(11,471)
43,879
415,553
380,565
325,703
339,240
464,553
59,483
8,043
(23,257)
(1,239)
582,149
73,156
8,090
(195,573)
(3,269)
271,036
34,939
15,395
(19,986)
(2,911)
242,847
36,197
9,999
(11,471)
(6,536)
507,583
464,553
298,473
271,036
59,483
(1,239)
58,244
73,156
(3,269)
69,887
34,939
(2,911)
32,028
36,197
(6,536)
29,661
Movement in present value of defined

benefit obligation
Current service cost

Interest cost
Actual benefits paid during the period
Actuarial (gain)/loss on obligation.
Present value of defined benefit
obligation as at the end of the year
Movement in fair value of plan assets
Actual return on plan assets


Actuarial loss on plan assets

8.7
Plan assets consist of the following
(Percentage)
(Percentage)
2010 2009 2010 2009

Debt instruments

Cash and other deposits

8.8
Historical information-gratuity
79%
21%

46 |
Pension
2010 2009
Present value of defined

benefit obligation
Surplus in the plan
2010
86%
14%
77%
23%
84%
16%
2009 2008 2007 2006

(Rupees in thousands)
(415,553)
507,583
92,030
(380,565)
464,553
83,988
(492,403)
582,149
89,746
(416,871)
507,134
90,263
(393,382)
445,285
51,903
Experience adjustment arising

on plan liabilities
(9,281)
2,489
37,155
(408)
60,504

on plan assets
(1,239)
(3,269)
36,638
37,952
41,150
Annual Report


8.9
Historical informationpension
2010
Present value of defined benefit obligation (325,703)

298,473
Surplus/(deficit) in the plan
(27,230)

on plan liabilities
on plan assets
2009 2008 2007 2006

(339,240)
271,036
(68,204)
(260,636)
242,847
(17,789)
(205,827)
212,101
6,274
(201,449)
182,781
(18,668)
(43,885)
43,879
33,073
(13,183)
(5,572)
(2,911)
(6,536)
9,010
11,759
11,183
Note
2010
2009
Long term loans - secured considered good
Staff loans outstanding for periods less than three years to:

Executives
Other employees
9.4
3,000
3,073
1,470
2,208
5,281
4,470
Less: Current maturity
13
1,550
1,717
2,920
3,564
9.1
Loans to other employees represent house building loans provided to employees in accordance with Companys
policy and are repayable over a period of five years. These loans are secured against the employees provident
fund. Loans to employees carry interest at the rate of approximately 8% per annum (2009: 8 % per annum).
9.2
Maximum aggregate balance during the year, at the end of any month, of loans to executives was
Rs. (thousands) 3,682 (2009: Rs. (thousands) 3,073).
9.3
No loans were granted to the directors and chief executive of the Company.

Note 2010 2009

9.4

Loans to executives
Opening balance
Disbursement during the year
Recoveries during the year
Closing balance
10
Stores and spares

Stores

Spares

Less: Provision for slow moving and obsolete items
10.1

Stores in transit

10.1
Provision for slow moving and obsolete items

Opening balance

Provision for the year

Closing balance
3,073
1,500
(1,573)
3,000
885
2,830
(642)
3,073
223,568
116,765
340,333
(42,808)
297,525
12,996
310,521
186,744
109,406
296,150
(34,598)
261,552
16,420
277,972
34,598
8,210
31,019
3,579
42,808
34,598

| 47

Note
2010
2009
11
Stock in trade
Raw materials - corn & cobs
2,333,955
656,527
Work in process
51,816
34,715
Finished goods
739,975
474,876
3,125,746
1,166,118
280,414
216,381
Related parties
19,926
34,874
12
Trade debts
Secured - against security deposits and bank guarantees
Unsecured - considered good
Others
76,583
64,110
96,509
98,984
Considered doubtful
13,899
11,428
110,408
110,412
(13,899)
(11,428)
Less: Provision for doubtful balances
12.1
96,509
98,984
376,923
315,365
12.1
Provision for doubtful balances
Opening balance
11,428
10,651
2,471
780
Bad debts written off
(3)
Closing balance
13,899
11,428
118,585
6,477
13.1
4,831
3,646
1,550
1,717
124,966
11,840

13
Loans and advances
Loans and advances - considered good
Suppliers of goods and services
Employees
Current maturity of long term loans
13.1
No advances were given to executives, directors and chief executive of the Company during the year.
Note
48 |
2010
2009
14
Security Deposits
12,727
L/C margin
1,001
546
Prepayments
11,794
12,811
25,522
22,227
8,870
Annual Report

Note
15
2009
Other receivables

Other receivables - Farmers balances
Considered good
Considered doubtful

Less: Provision for doubtful balances
15.1

Due from related parties

15.2

Others

15.1
Provision for doubtful balances

Opening balance

Closing balance

15.2


Opening balance
28
Payment to the fund
Closing balance
16
2010
9,485
1,675
11,160
(1,675)
9,485
1,574

1,195
12,254
1,675

1,675
428
(150,198)
149,572
(198)
1,566
1,675
3,241
(1,675)
1,566
1,119
428
3,303
6,416
1,675
1,675
1,177
(108,072)
107,323
428

Cash at banks
on current accounts
on PLS accounts
16.1

Cash in hand

Cheques in hand

1,516
17,134
18,650
45,547
606,870
652,417
1,134
19,957
21,091
2,358
18,634
20,992
39,741
673,409
16.1
These carry profit at rates ranging from 5% to 11.5% per annum (2009: 5% to 12% per annum).
Note
2010
2009
17
Creditors
Advances from customers
Security deposits from dealers and contractors
17.1
Other deposits
17.2
Accrued liabilities
28
15.2
Employees provident fund
Sales tax payable
Special excise duty payable
Unclaimed dividend

328,796
140,386
299,713
855
244,536
57,075
198
6,588
22,441
3,554
4,361
138,187
78,320
174,219
857
277,131
41,067
1,071
16,777
2,915
3,658
1,108,503
734,202

| 49

17.1

As per the terms of agreement between dealers and contractors, the Company can utilize these deposits in the normal
course of business.
17.2
These represent deposits held against tenders for the sale of scrap.
18
Short term running finance - secured
18.1
The aggregate financing facility available from commercial banks is Rs. (thousands) 3,000,000 (2009: Rs. (thousands)
3,000,000).
18.2
The rate of markup ranges from 12.63% to 14.84% per annum (2009: 11.64% to 16.75% per annum). These facilities
are secured by joint pari passu hypothecation charge on current assets of the Company and are subject to repricing
on monthly/quarterly basis.
18.3
The unutilized facility for letters of credit as on 31 December 2010 amounts to Rs. (thousands) 648,622 (2009:
Rs. (thousands) 592,901).
Note
2010
2009
19
Deferred taxation
The details of the tax effect of taxable and deductible temporary differences are as follows:

Taxable temporary difference on:
Accelerated tax depreciation
350,795
271,959
22,680
5,525
373,475
277,484
(21,721)
(17,163)
351,754
260,321
Deductible temporary difference on:
Others

2010
Charged to

Opening

Charged to
Prifit and
loss
Other
comprehensive
income
Closing
19.1
Taxable temporary difference
271,959
78,836
5,525

17,155
350,795
22,680
Deductible temporary difference

Others
(17,163)
(4,558)
260,321
74,278

17,155
(21,721)
351,754

2009
Charged to

Opening

Charged to
Prifit and
loss
Other
comprehensive
income
Closing
Taxable temporary difference
225,971
45,988
25,185

(19,660)
271,959
5,525
Deductible temporary difference

50 |
Others
(15,883)
(1,280)
235,273
44,708

(19,660)
(17,163)
260,321
Annual Report


20

2010 2009 2010 2009

(Number of shares)
Authorized, issued, subscribed and

paid up capital

Authorized share capital

Ordinary shares of Rs.10 each

20.1
Issued, subscribed and

paid up capital
20,000,000
20,000,000
200,000
200,000
1,858,991
1,858,991
18,590
18,590
Ordinary shares of Rs. 10 each

fully paid up for cash

Issued other than cash - plant
and machinery
36,294
36,294
363
363
Issued as fully paid bonus shares
7,341,143
7,341,143
73,411
73,411

9,236,428
9,236,428
92,364
92,364
20.2
Corn Products International Inc., USA holds 6,494,243 (2009: 6,494,243) ordinary shares of Rs. 10 each as at
31 December 2010.
Note
2010
2009
21 Reserves

Capital
Share premium
21.1
Other
21.2
36,946
941
37,887
36,946
941
37,887
Revenue
General reserve
Unappropriated Profit
207
207
4,823,427
3,877,272
4,823,634
3,877,479

4,861,521
3,915,366

21.1
This reserve can be utilized in accordance with the provision of section 83(2) of the Companies Ordinance, 1984.

21.2
This reserve was created under section 15BB of the Income Tax Act, 1922 to avail the tax exemption in prior
years.

22
Contingencies and commitments

a)
b)
c)
d)
e)
Certain labour cases are pending before the labour courts and their financial effect cannot be reasonably determined
due to their nature and uncertainty surrounding them. The possibility of any outflow for settlement of these claims is
considered remote.

Land registration fee as per Note 7.2.
Commitments in respect of capital expenditure contracted but not provided amounts to Rs. (thousands) 476,247
(2009: Rs. (thousands) 474,254).

Commitments in respect of purchase of corn amounts to Rs. (thousands) 3,488,519 (2009: Rs. (thousands)
4,028,200).
Commitments in respect of counter guarantees given to banks in consideration of their guarantees in the normal
course of business amount to Rs. (thousands) 120,370 (2009: Rs. (thousands) 105,972).

| 51

2010 2009

23
Note
Sales - net
Domestic

Export
14,120,519
11,684,655
518,656
304,567
14,639,175
11,989,222
674,803
516,762
Special excise duty
42,022
33,182
Trade discount and commission
9,581
11,174
Less:
Sales tax

24
Cost of sales
Raw material consumed:
Corn
Stores
Packing material
726,406
561,118
13,912,769
11,428,104
7,744,004
6,490,974
263,587
254,649
270,444
224,387
8,278,035
6,970,010
469,325
420,824
Factory expenses:
Salaries, wages and amenities
Spares consumed
118,629
102,523
Fuel and power
1,667,190
1,163,108
Rent, rates and taxes
3,819
25,525
Repairs and maintenance
9,527
13,519
145,768
140,628
10,942
10,231
24.1
Depreciation
Insurance
5.2
Factory general expenses
193,998
142,116
2,619,198
2,018,474
10,897,233
8,988,484
Opening work in process stock
34,715
28,785
Add:
10,931,948
9,017,269
Closing work in process stock
(51,816)
(34,715)
Cost of production
10,880,132
8,982,554
Add:
Less:
474,876
11,355,008
9,467,618
(739,975)
(474,876)
10,615,033
8,992,742
Less:
Opening finished goods stock

Closing finished goods stock
24.1
485,064
Salaries, wages and amenities include Rs. (thousands) 11,355 (2009: Rs. (thousands) 8,248) in respect of contribution
to pension and gratuity fund and Rs. (thousands) 11,660 (2009: Rs. (thousands) 10,264) in respect of contributions
to provident fund.
52 |
Annual Report

Note
2010
2009
25
Distribution cost
Salaries and amenities
44,803
47,306
Traveling and automobile expenses
6,950
8,559
Freight and distribution
66,019
48,044
Insurance
1,991
2,485
1,113
1,007
Repair and maintenance
438
345
Electricity charges
113
93
Printing and stationery
379
486
Telephone and postage
1,713
1,475
Advertising and sales promotion
332
625
Depreciation
4,859
4,503
Market research and development
46
58
Provision for doubtful debts
2,471
780
Miscellaneous expenses
541
1,118
131,768
116,884
25.1
25.1
5.2
12.1
Salaries and amenities include Rs. (thousands) 2,780 (2009: Rs. (thousands) 2,380) in respect of contribution to
pension and gratuity fund and Rs. (thousands) 1,951 (2009: Rs. (thousands) 1,951) in respect of contributions to
provident fund.

Note
26
2009

Salaries and amenities
26.1

Traveling and automobile expenses

Insurance


IT, networking and data communication

Repair and maintenance

Electricity charges

Printing and stationery

Telephone and postage

Legal and professional charges

Depreciation
5.2

Amortisation on intangible assets
6.1

Auditors remuneration
26.2

Miscellaneous expenses

Donation and charity
26.3

2010
26.1
147,246
11,460
811
1,421
22,186
1,061
1,975
1,595
3,439
7,397
6,399
507
1,874
2,221
1,500
211,092
140,608
10,852
881
1,361
8,378
2,140
1,489
936
3,132
5,524
5,780
1,704
3,250
1,500
187,535
Salaries and amenities include Rs. (thousands) 9,303 (2009: Rs. (thousands) 7,461) in respect of contribution to
pension and gratuity fund and Rs. (thousands) 5,891 (2009: Rs. (thousands) 6,637) in respect of contributions to
provident fund.
| 53

2010
2009
26.2
Auditors remuneration
Statutory audit fee
730
670
250
230
accounts to CPI Inc.
Review of half yearly accounts
Services in connection with review and reporting of
690
635
Audit of gratuity and pension funds
84
84
Miscellaneous certification
30
Out of pocket expenses reimbursed
90
85
1,874
1,704
26.3
This represents donation to Government for rehabilitation of flood victims and none of the Directors has any
interest in the donee.

Note 2010 2009

27
Mark up on staff loans and profit on bank deposits
6,685
Profit on sale of scrap
56,647
54,835
Profit on sale of property, plant and equipment
2,561
4,727
Profit on sale of pesticides and seeds
7,127
2,992
4,303
Commission received
1,108
1,210
Foreign exchange (loss) / gain
(146)
1,200
Miscellaneous income
9,122
9,992
83,104
79,259
24,166
42,401

28
Finance cost
Mark up on short term running finances
Bank charges and commission
7,382
6,365
31,548
48,766
150,198
108,072
29
15.2

56,245
41,500
206,443
149,572
670,076
30 Taxation
54 |
Current
887,774
Deferred
74,278
44,708
962,052
714,784
30.1
The Income Tax Department has charged tax of Rs. (thousands) 81,078 for the assessment year 2001-2002
(financial year ended 30 September 2000) under section 12(9A) of the Income Tax Ordinance, 1979 (Repealed) on the
allegation that the dividend distribution by the Company was less than 40% of its after tax profits. Against this levy,
the Company filed an appeal with the Commissioner of Income Tax (Appeals), which was rejected. The Company
preferred an appeal with the Income Tax Appellate Tribunal (ITAT) against the order of CIT (Appeals). The ITAT vide
order dated 21 April 2006 decided the case in favour of the Company and confirmed that levy of tax under section
12(9A) was against the provisions of the law and directed the assessing officer for decision in accordance with the
provisions of amended clause 59 of Part IV, Second Schedule to the repealed Income Tax Ordinance, 1979. The
Income Tax Department has moved to Lahore High Court on 17 October 2006, against the orders of ITAT. The case
has not been fixed for hearing so far.
No provision has been made in these financial statements as according to the management of the Company, it is
probable that this case will be decided in favour of the Company. The legal advisors of the Company have concurred
with the managements view.

Annual Report

30.2
2010 2009
%
Numerical reconciliation between average effective

tax rate and applicable tax rate:
Applicable tax rate
35.00
Tax effect of inadmissible expenses
0.54
0.32
Tax effect of admissible expenses
(0.14)
(0.33)
Effect of presumptive tax regime and others
(1.04)
0.54
Average effective tax rate (tax expense
divided by profit before tax)
34.36
35.53
31
Earnings per share - basic and diluted
31.1
Earning per share - Basic
Profit attributable to ordinary shareholders
Weighted average number of ordinary shares
(Numbers)
Earnings per share - basic
(Rupees)
2010
35.00
2009
1,837,937
1,297,080
9,236,428
9,236,428
198.99
140.43
31.2
Earning per share - Diluted

There is no dilution effect on basic earnings per share as the Company has no such commitments.
32 Financial instruments

The Companys financial liabilities mainly comprise trade and other payables and short term running finances. The main purpose
of financial liabilities is to raise finance for the Companys financial assets which comprise long term loan, trade debts, Loans
and advances, trade deposits and short term prepayments, other receivables and Cash and bank balances.

The company has exposure to the following risks from its use of financial instruments:

- Credit risk

- Liquidity risk

- Market risk

The Board of Directors has overall responsibility for the establishment and oversight of Companys risk management framework.
The Board is also responsible for developing and monitoring the Companys risk management policies.

32.1
Credit risk

Credit risk represents the accounting loss that would be recognised at the reporting date if counter parties fail completely
to perform as contracted and arise principally from long term loans, trade debts, loans and advances, trade deposits
and short term prepayment and other receivables and cash and bank balances. Out of the total financial assets of
Rs. 462,740 thousand (2009: Rs. 1,085,249 thousand) financial assets which are subject to credit risk amount to
Rs. 442,783 thousand (2009: Rs. 1,011,175 thousand).
To manage exposure to credit risk in respect of trade receivables, management performs credit reviews taking into
account the customers financial position, past experience and other factors. Where considered necessary, advance
payments are obtained from certain parties. Sales made to major customers are secured through security deposits,
bank guarantees and letters of credit. To manage exposure to credit risk, the company applies credit limits to its
customer and obtains advances from certain customers.
All investing transactions are settled / paid for upon delivery. The Companys policy is to enter into financial instrument
contract by following internal guidelines such as approving counterparties and approving credits.
Concentration of credit risk arises when a number of counter parties are engaged in similar business activities or
have similar economic features that would cause their abilities to meet contractual obligation to be similarly effected
by the changes in economic, political or other conditions. The Company believes that it is not exposed to major
concentration of credit risk.
The carrying amount of financial assets represents the maximum credit exposure before any credit enhancements.
The maximum exposure to credit risk at the reporting date is:
| 55

2010 2009
Long term loans
4,470
5,281
Trade debts
376,923
315,365
Loans and advances
4,831
3,646
24,521
9,416
Other receivables
12,254
6,416
19,784
671,051
442,783 1,011,175
Secured
284,884
Unsecured
157,899
789,513
442,783
1,011,175
The company has placed its funds with banks which are rated Al+ by PACRA/JCR VIS
The maximum exposure to credit risk for trade debts as at 31 December 2010
221,662
by geographic regions was:

Domestic

Foreign
380,134
10,688
287,809
38,984
390,822
326,793
The aging of trade receivables at the reporting date is:
Past due 0 - 30 days
385,478
319,300
2,411
5,214
255
1,383
Past due 366 & above
2,678
896
390,822
326,793
The aging of impairment loss against trade receivable:
8,555
3,935
2,411
5,214
255
1,383
Past due 366 & above
2,678
896
13,899
11,428
The movement in provision for impairment of receivables is as follows:
Opening balance
11,428
10,651
2,471
780
Bad debts written off
(3)
13,899
11,428
Closing balance

56 |
32.2

Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Companys
approach to managing liquidity is to ensure as far as possible to always have sufficient liquidity to meet its liabilities
when due. The Company is not materially exposed to liquidity risk as substantially all obligations / commitments of
the Company are short term in nature and are restricted to the extent of available liquidity. In addition, the Company
has obtained overdraft facilities from various commercial banks to meet any deficit, if required to meet the short term
liquidity commitments.
Annual Report

The table below summarizes the maturity profile of the Companys financial liabilities as at reporting date:

31 December 2010

Carrying
amount
Contractual
cash flows
Less than
12 month
More than
1 year
Financial Liabilities
968,117
968,117
968,117
8,298
9,377
9,377
634,460
634,460
634,460
1,610,875
1,611,954
1,611,954

31 December 2009
Carrying
amount
Contractual
cash flows
Less than
12 month
More than
1 year
Financial Liabilities
655,882
655,882
8,601
9,891
9,891

32.3
655,882
664,483

665,773
665,773
Market risk
Market risk is the risk that changes in market price, such as foreign exchange rates, interest rates and equity prices
will effect the Companys income or the value of its holdings of financial instruments.

32.3.1 Currency risk

The Company is exposed to currency risk on import of project related and stores and spares items and export
of goods mainly denominated in US dollars and on foreign currency bank accounts. The Companys exposure to
foreign currency risk for US Dollars are as follows:
USD
USD
2010 2009
Foreign debtors
124,795
462,520
Foreign currency bank accounts
100
100
Gross financial assets exposure
124,895
462,620
(3,508)
(228,226)
121,387
234,394
Net exposure
The following significant exchange rates have been applied:
2010

2009
Average rate for the year
2010 2009
Reporting date rate
USD to PKR
85.78
81.66
85.64
84.25

| 57

Sensitivity analysis:
At reporting date, if the PKR had strengthened by 10% against the foreign currencies with all other variables held
constant, before tax profit for the year would have been lower by the amount shown below, mainly as a result of net foreign
exchange gain on translation of foreign debtors, foreign currency bank account and trade and other payables.
2010
2009
Effect on profit and loss

US Dollar
1,040
1,975

1,040
1,975

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

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

32.3.2 Interest rate risk
At the reporting date the interest rate profile of the Companys significant interest bearing financial instruments was as follows:

2010
2009
Effective rate
(in Percentage)
2010 2009
Carrying amount
Financial Assets
Fixed rate instruments:

Long term loans
4,470
5,281
5 to 11.5
5 to 12
17,134
606,870
11.64 to 16.75
634.460
Variable rate instruments:

Cash and bank balances - saving
Financial liabilities
Variable rate instruments:

Short term borrowings 12.63 to 14.84
Fair value sensitivity analysis for fixed rate instruments
The Company does not account for any fixed rate financial assets and liabilities at fair value through profit and loss.
Therefore a change in interest rates at the reporting date would not affect profit and loss account.
Cash flow sensitivity analysis for variable rate instruments
A change of 100 basis points in interest rates at the reporting date would have decreased / (increased) pofit for the
year by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates,
remain constant. The analysis is performed on the same basis for 2009.

Profit and loss 100 bps

Increase
Decrease

242
(242)

424
(424)

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

of the Company.

32.3.3
Other price risk
Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market prices (other than those arising from interest rate risk or currency risk). The company is not exposed
to any price risk as there are no financial instruments at the reporting date that are sensitive to price fluctuations.

32.3.4 Fair value of financial instruments
58 |
The carrying values of the financial assets and financial liabilities approximate their fair values. Fair value is the amount
for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arms length
transaction.

Annual Report

32.3.5
Capital risk management
The Boards policy is to maintain an efficient capital base so as to maintain investor, creditor and market confidence
and to sustain the future development of its business. The Board of Directors monitors the return on capital employed,
which the Company defines as operating income divided by capital employed. The Board of Directors also monitors
the level of dividends to ordinary shareholders.

The Companys objectives when managing capital are:

(i)
to safeguard the entitys ability to continue as a going concern, so that it can continue to provide returns for
shareholders and benefits for other stakeholders, and

(ii)
to provide an adequate return to shareholders.

The Company manages the capital structure in the context of economic conditions and risk characteristics of the
underlying assets. In order to maintain or adjust the capital structure, the Company may, for example, adjust the
amount of dividends paid to shareholders and issue new shares.

For working capital requirement and capital expenditure, the Company primarily relies substantially on short term borrowings.
33 Remuneration of Chief Executive, paid Directors and Executives

Chief Executive & MD

Directors
Executives
2010 2009 2010 2009 2010 2009

Managerial remuneration

Rent, bonus and other allowances

Retirement benefits

Club subscription

Leave encashment

Number
8,005
15,729
3,872
6,408
37,319
32,026
2,950
13,300
4,466
9,300
49,053
39,701
10,955
29,029
8,338
15,708
86,372
71,727
1,805
2,625
873
587
8,413
5,345
27
85
26
27
40
36
1,128
10,294
903
804
5,252
5,197
13,915
42,033
10,140
17,126
100,077
82,305
1 2 1 2 43 37

eeting fees aggregating to Rs. (thousands) 9 (2009: Rs (thousands) 3) were paid to 4 (2009: 4) non-executive directors for
M
attending board meetings. In addition Chief Executive & Managing Director, full time working director and some executives are
also provided with Company maintained car.

34
Transactions with related parties and associates
The realted parties comprise parent company, related group companies, local associated company, directors of the company,
key management personnel and staff retirement funds. Details of transactions with related parties, other than those disclosed
else where in these financial statements are as follows:

2010

Name of parties
Nature of relationship
Nature and description of

related party transaction
Unilever Pakistan Food Limited
Total
value of
Closing
transaction
balance
Associate
Sales
798,858
Services rendered
Corn Products International
Holding company
Services received
Corn Products Kenya Ltd.
Associate
Export sales
12,528
Corn Products Malaysia
Associate
Export sales
97,334
Employees benefits
Other related parties
Contribution to funds
42,940
2009
Total
15,455

4,471
value of
Closing
transaction balance
703,067
242,222
63
1,455
32,850
18,758
7,504
3,478
36,940
14,713
The transactions were carried out at an arms length basis, in accordance with the accounting policy as stated in
Note 4.23.
No buying and selling commission has been paid to any associated undertaking.
| 59

2010
2009
( Metric Tons)
35
Plant capacity and production
Average grind capacity per day
1,408
1,303
Grind capacity for 350 working days
492,683
456,050
Actual days worked
303
309
Actual grind
425,528
399,723
The reduction in grind days/ grind was attributable to lower sales demand and acute energy crisis in the country.

36

Dividends
The Board of Directors have proposed a final dividend for the year ended 31 December 2010 of Rs. 55 per share, amounting to
Rs. (thousands) 508,004 at their meeting held on 14 February 2011, for approval of the members at the Annual General Meeting
to be held on 29 March 2011 (2009: Rs. 40 per share amounting to Rs. (thousands) 369,457).

37
Date of authorization of issue
These financial statements were authorized for issue on 14 February, 2011 by the Board of Directors of the Company.
38
Use of estimates and judgments
The preparation of financial statements in conformity with approved accounting standards requires management to make
judgments, estimates and assumptions that effect the application of policies and reported amounts of assets and liabilities,
income and expenses. The estimates and associated assumptions and judgments are based on historical experience and
various other factors that are believed to be reasonable under the circumstances, the result of which form the basis of making
the judgment about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may
differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revision to accounting estimates are recognized
in the period in which the estimate is revised if the revision effects only that period, or in the period of revision and future
periods if revision affects both current and future periods. The areas where various assumptions and estimates are significant to
Companys financial statements or where judgments were exercised in application of accounting policies are as follows:
Taxation- (note 4.3 & 30)
Useful life of depreciable assets- (note 4.6 & 5)
Employees retirement benefits- (note 4.9 & 8)
Provision and contingencies- (note 4.17 & 22)

39 General

Figures in these financial statements have been rounded off to the nearest thousands of rupees.
Comparative figures have been reclassified and re arranged where necessary in order to facilitate comparison.

Anis Ahmad Khan

Director
60 |
Ansar Yahya
Chief Executive &
Managing Director
Zulfikar Mannoo
Director
Annual Report
Number of
Shareholders

715
Shareholding
Shares Held
100
37,054
101
47
501
1000
36,159
48
1001
5000
116,823
5001
10000
15,995
15001
20000
20,000
25001
30000
28,827
40001
45000
43,140
50001
55000
108,217
55001
60000
114,050
60001
65000
63,822
65001
70000
200,262
85001
90000
89,989
100001
105000
100,131
110001
115000
226,265
140001
145000
283,066
150001
155000
152,139
165001
170000
332,964
200001
205000
200,085
235001
240000
236,578
300001
305000
300,595
6490001
6495000
6,494,240
152
Total
500 36,027
988
9,236,428
Sr.
Categories of
Number of
Shares
No.
Shareholders
Shareholders
Held
Individuals
Investment Companies
Insurance Companies
Joint Stock Companies
Modaraba Companies
3,378
0.04
Foreign Investors
6,494,288
70.31
Mutual Fund
88,451
0.96
Others
2,381
0.02
988
9,236,428
Total:
Percentage
955
2,532,945
27.42
60
0.00
113,322
1.23
10
1,603
0.02
100.00
The above two statements include 341 shareholders holding 391,816 shares through Central Depository Company of Pakistan Limited.
| 61
As at 31 December 2010 as per format perscribed in Code of Corporate Governance
No. of
Shares
Associated Companies, undertakings and related parties

Corn Products International Inc.
- Sponsor and Related Party
6,494,240
NIT
ICP
60
Directors

Mr. John F. Saucier
Mr. Rashid Ali
1
865
Ms. Cheryl K. Bebee
Ms. Mary A. Hynes
Mr. Zulfikar Mannoo
238,263
Mian M. Adil Mannoo
155,911
Mr. Wisal A. Mannoo
177,198
Mr. Anis Ahmad Khan
1,264
Sh. Gulzar Hussain
5,574
Directors Spouses

Mrs. Sarwat Zulfikar W/o Mr. Zulfikar Mannoo
9,370

CEO

Mr. Ansar Yahya
82

Executives 1,712

Public sector companies and corporations

Banks, DFIs, Non-Banking FI, Insurance, Modaraba, Mutual Fund
204,601

Shareholders holding ten percent or more voting interest

62 |
Corn Products International Inc.
6,494,240
Annual Report
Proxy Form
118th General Meeting (Annual Ordinary)
The Company Secretary,

Rafhan Maize Products Co. Ltd.,
Rakh Canal East Road, P. O. Box 62,
Faisalabad.
I / We
of
being shareholder(s) of Rafhan Maize Products Company Limited hereby appoint
of
or failing him
as my / our proxy to vote for me / us and on my / our behalf at the 118th General Meeting
(Annual Ordinary) of the Company to be held at Karachi on Tuesday, March 29, 2011
at 10:00 a.m. and / or at any adjournment thereof.
Dated this
day of
2011.
Affix Revenue
Stamp of
Rs. 5/-
(Signature of Proxy)

Witness
Signature of Shareholder
Place
Folio No. / CDC No.
No. of Shares held
Notes:
a)
This Form of Proxy, duly completed and signed across a revenue stamp, must be deposited at the
Companys Registered Office not less than 48 hours before the time of holding the meeting.
b)
A proxy need not be a member of the Company.
| 63
AFFIX
CORRECT
POSTAGE
The Company Secretary,
Rafhan Maize Products Co. Ltd;

Rakh Canal East Road, P. O. Box 62,
Faisalabad.

Rafhan AR 2010

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Quality

* Data for 15 months

for the year ended December 31, 2010

In the name of Allah The Most Merciful, The Compassionate

Chief Executive & Managing Director

Business Strategy and

for the year ended December 31, 2010

Notice is hereby given that the 118th General Meeting (Annual

To confirm minutes of the last General Meeting (Annual

The Share Transfer Book of the Company will remain

A member entitled to attend, speak and vote at the

Shareholders are requested to notify change of address,

CDC shareholders desiring to attend the meeting are

2. To receive, consider and adopt the Audited Accounts

To approve final cash dividend @550% for the year

To appoint auditors and fix their remuneration. The

By order of the Board

for the year ended December 31, 2010

Our Core Values

Chief Executives Review

It gives me great pleasure to present the Annual Report

Net Income after Tax

Earnings per Share

By the grace of Almighty Allah, your Company has made

for the year ended December 31, 2010

Our brands are our customers preferred choices in the

for your Companys Q-Tac starches. The corrugation and

Chief Executives Review

Rafhan Liquid Glucose, Cerelose Dextrose Monohydrate,

for the year ended December 31, 2010

In our quest for professional excellence, your Company is

We are confident that continued investment in our people

Chief Executives Review

management is an integral part of our business strategy.

Companys competitiveness in the market. Our production

The goal of zero loss time accident during 2010 was

for the year ended December 31, 2010

13.5 million exposure hours without a lost workday

The following additional actions were taken in the area of

The Company contributed Rs.1.9 million to the fund

Environment Stewardship Program was continued during

248 plants were planted in the green fields of

Public primary school and post office built on your

37 students of different professional institutions were

CORPORATE SOCIAL RESPONSIBILITY (CSR) AND

Chief Executives Review

SAP Go Live 5th July 2010

Your Company is recognized as the employer of equal

Employees participation in the community welfare

Green Chemistry - introducing new environment

Awareness and participation of employees was

A fully equipped dispensary is also maintained to face

Apprenticeship training is provided to school/college

Focusing on teamwork in all areas of our business is the

for the year ended December 31, 2010

challenges. As the year 2010 was full of challenges due to

fast growing challenges. Our team members are aware of

Standard Operating Procedures

Management and Technical Skills Development

Your Companys Core Values and Business Conduct

Chief Executives Review

Corporate Social Responsibility National Excellence

Annual Award on Best Practices in Occupational

7th Environment Excellence Award 2010 in