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Unilever Pakistan Limited Annual Report-2010_tcm96-260483

Unilever Pakistan Limited Annual Report-2010_tcm96-260483

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At Unilever all business activities are carried out in a socially and environmentally responsible manner. To promote a greener Pakistan and as a tangible demonstration of our commitment, this annual report has been printed on 100% recycled paper and information has been limited to financial statements only. Further information on our brands, business and corporate social responsibility initiatives is available on our website. www.unileverpakistan.com.pk

Vision Core Values Company Information Notice of Annual General Meeting Directors’ Report Board Meetings’ Attendance Operating & Financial Highlights Statement of Value Addition & its Distribution Pattern of Shareholding Statement of Compliance with the Code of Corporate Governance Auditors’ Review Report Financial Statements Consolidated Financial Statements Form of Proxy

look good and get more out of life with brands and services that are good for them and good for others. We will develop new ways of doing business with the aim of doubling the size of our company while reducing our environmental impact.vision WE WORK TO CREATE A BETTER FUTURE EVERY DAY. . We will inspire people to take small everyday actions that can add up to a big difference in the world. We help people feel good.

. Bringing out the Best in All of Us We are empowered leaders.core values Impeccable Integrity We are honest. who are inspired by new challenges and have a bias for action. truth and outstanding teamwork. We value a creative & fun environment. Living an Enterprise Culture We believe in trust. Demonstrating a Passion for Winning We deliver what we promise. Wowing our Consumers & Customers We win the hearts and minds of our consumers and customers. transparent and ethical in our dealings at all times. Making a Better World We care about and actively contribute to the community in which we live.

Chartered Accountants State Life Building No.I.Executive Director COMPANY SECRETARY Mr. Imran Husain Executive Director / CFO Mr. Amar Naseer AUDIT COMMITTEE Mr. Khalid Rafi Non . Khan Non . Khalid Rafi Member Mr.I. Shazia Syed Executive Director Mr.pk . M. 1-A I.Ferguson & Co. Qaysar Alam Executive Director Ms. Chundrigar Road Karachi. Zaffar A.75530 SHARE REGISTRATION OFFICE C/o Famco Associates (Pvt) Limited State Life Building No.Company BOARD OF DIRECTORS Mr. REGISTERED OFFICE Avari Plaza Fatima Jinnah Road Karachi . 1-C I. Zaffar A. Paracha Executive Director Mr. Amir R.F. Ehsan A. Malik Chairman & Chief Executive Mr. Khan Chairman Mr. Chundrigar Road Karachi. Qaysar Alam Member Mr. M.com. Imtiaz Jaleel Head of Internal Audit & Secretary information AUDITORS Messrs A. WEBSITE ADDRESS www.unileverpakistan.Executive Director Mr.

together with the Reports of the Auditors and Directors thereon. the total dividend for 2010 will thus amount to 492% (or Rs. Qaysar Alam Mr. on Tuesday. Paracha Mr. 5. The term of office of the following seven (7) directors will expire on April 18. To approve and declare dividend (2010) on the Ordinary Shares of the Company. 3. B. By Order of the Board Karachi March 04. Karachi. 3. Malik Mr. Together with the interim dividend of 178% (or Rs.m.89. Khalid Rafi 2.F. fixed the number of Directors at eight (8). Mr. retire and being eligible have offered themselves for re-appointment). Zaffar A.Notice of Annual General Meeting Notice is hereby given that the 62nd Annual General Meeting of Unilever Pakistan Limited will be held at Pearl Continental Hotel. March 29.00 per ordinary share) already paid. 2010. Mr. Shazia Syed 6. To appoint Auditors for the ensuing year. 2011 Amar Naseer Company Secretary 06 . To receive and consider the Company’s Financial Statements for the year ended December 31. 2011: 1.157. Ordinary Business 1. M.246. Imran Husain 4. The Directors have recommended final dividend of 314% (or Rs. Ferguson & Co. Khan 2. 2011. Club Road. to transact the following business: A. 5. and to fix their remuneration.. at 11:00 a. 4.00 per share) on the Ordinary Shares. To elect directors of the Company for a three years term. Ehsan A. (Messrs.00 per ordinary share). Amir R. Chartered Accountants. A. 2011. Special Business To approve the remuneration of Executive Directors including the Chief Executive. Ms. Mr. 7. The Board of Directors in the meeting held on February 14.

Fatima Jinnah Road. ii) B. 4. In case of corporate entity.Notice of Annual General Meeting Notes: 1. All Members (whether holding Preference or Ordinary Shares) are entitled to attend and vote at the meeting. Duly completed instrument of proxy. Avari Plaza. The proxy form shall be witnessed by two persons whose names. the Board of Directors’ resolution/power of attorney with specimen signature of the nominee shall be produced at the time of the meeting. Karachi) at least 48 hours before the time of the meeting. and the other authority under which it is signed. the account holder or sub-account holder and / or the person whose securities are in group account and their registration details are uploaded as per the Regulations. For Appointing Proxies: In case of individuals. the account holder or sub-account holder and/or the person whose securities are in group account and their registration details are uploaded as per the Regulations. 2011 to March 29. Chundrigar Road. Karachi. Any change of address of Members should be immediately notified to the Company’s Share Registrars. or a notarially certified copy thereof. 2011 (both days inclusive). Share Transfer Books will be closed from March 22. 2. 07 . I. addresses and CNIC numbers shall be mentioned on the form. shall authenticate his identity by showing his original Computerised National Identity Card (CNIC) or original passport at the time of attending the meeting. i) ii) iii) Attested copies of CNIC or the passport of the beneficial owners and the proxy shall be furnished with the proxy form. shall submit the proxy form accordingly. 3. must be lodged with the Company Secretary at the Company’s Registered Office (1st Floor. For Attending the Meeting: i) In case of individuals. Famco Associates (Private) Limited. State Life Building 1-A (1st Floor). A Member may appoint a proxy who need not be a Member of the Company. I. CDC Account Holders will further have to follow the under-mentioned guidelines as laid down by the Securities and Exchange Commission of Pakistan: A.

Election of Directors: The number of Directors to be elected at the Annual General Meeting has been fixed by the Board of Directors at eight. and he/she is a registered National Tax Payer (except where he/she is a non-resident). C. Any person who seeks to contest election for directorship of the Company shall file with the Company at its registered office: i) A notice of his/her intention to offer himself for election 14 days before the date of the above said Annual General Meeting. The Board has increased the number of Directors from seven (7) to eight (8) at its meeting held on February 14. 2011. the Memorandum and Articles of the Company and the listing Regulations of the Karachi/Lahore/Islamabad Stock Exchanges and has read the relevant provisions contained therein. that he/she has not been convicted by a court of competent jurisdiction as defaulter in payment of any loan to a banking company. iv) A declaration in terms of the Code of Corporate Governance to the effect that he/she is not serving as a Director of more than ten other listed companies.Notice of Annual General Meeting iv) The proxy shall produce his/her original CNIC or original passport at the time of meeting. ii) iii) A declaration with consent to act as Director in the prescribed form under clause (ii) of the Code of Corporate Governance to the effect that he/she is aware of duties and powers of Directors as mentioned in Companies Ordinance 1984. v) Attested copy of CNIC / NTN. that he/she or their spouse are not engaged in the business of Stock Brokerage (unless specifically exempted by the Securities and Exchange Commission of Pakistan). in terms of Section 178(3) of the Companies Ordinance 1984. 08 . v) In case of corporate entity. a development financial institution or a non-banking financial institution. the Board of Directors’ resolution / power of attorney with specimen signature shall be submitted along with proxy form to the Company. Form 28 (consent to Act as Director) prescribed under Companies Ordinance 1984.

and Rs. 105. as under: Chief Executive Executive Directors (Rs.'s Share Based Remuneration * 36.5 0. their individual contracts and the rules of the Company.7 65.9 million to the Executive Directors.8 2. amounting in the aggregate to Rs. 09 . 45.4 * Estimated Charge for performance based remuneration in the shape of Parent Company’s shares to the executives of the Company. the following resolution be passed as an Ordinary Resolution: “RESOLVED THAT approval be and is hereby granted for the holding of offices of profit in the Company by the Executive Directors including the Chairman / Chief Executive.0 17.1 43. Estimated for January 2012 to March 2012: Rs. 11. For this purpose it is proposed that.9 0. actual for the year January-December 2010.7 million to the Chief Executive. Estimated for the year 2011: Rs.6 81.6 million to the Chief Executive.2 3.6 57. and Rs. in million) Managerial Remuneration & Allowances Retirement Benefits Medical Other Expenses Parent Co. 59. 9. 1984 Statement in respect of Special Business and related Draft Resolution This Statement sets out the material facts concerning the Special Business to be transacted at the Annual General Meeting and the proposed Resolution related thereto: Item 5 of the Agenda – Remuneration of Executive Directors including Chief Executive For the year 2010 Rs. Executive Directors and CEO are also entitled to use Company car.5 2.1 million for Chief Executive.6 million approximately.Notice of Annual General Meeting Statement Under Section 160 (1) (b) of the Companies Ordinance.6 million for Executive Directors and Rs. Approval of the Members is required for remuneration for holding their respective office of profit in respect of the Executive Directors. 81.8 15. and the payment of remuneration to them for their respective periods of service in accordance with the shared service agreements.1 5.6 60. 60.4 million to the Executive Directors.

the number of Directors to be elected). The Company will file the candidates’ consents with the Registrar of Companies and notify their names in the press.0 million approximately estimated for January to December 2011 which includes variable pay for the year 2010 and Rs. The Directors shall be elected from persons who offer themselves for election and are not ineligible under Section 187 of the Companies Ordinance 1984. no voting will take place and all the candidates will be deemed to have been elected.” Procedure for Election of Directors: According to the Company’s Articles of Association. commencing from April 19. 6. Any person wishing to stand for election (including a retiring Director) is required to file with the Company (not later than 14 days before the election date). 4.7 million approximately estimated for January to March 2012.e. A Member may cast vote/s in favour of a single candidate or for as many of the candidates and in such proportion as the Member may choose. The person receiving the highest number of votes will be declared elected. 2. a Member shall have votes equal to the number of shares held by him multiplied by eight (i. 142. the Companies Ordinance 1984. In case of voting. 8. a notice of his intention to stand for election. A person may withdraw his candidature any time before the election is held. 2011. along with duly completed and signed Form 28 giving his consent to act as Director of the Company if elected.Notice of Annual General Meeting Rs. the following procedure is to be followed for nomination and election of Directors: 1. 9. 7. 5. The election of eight (8) Directors will be for a term of three years. 3. followed by the next highest. till all the vacancies are filled. and the Code of Corporate Governance. 20. 10 . and so on. and certify that he is not ineligible to become a Director and fulfills the requirements of Code of Corporate Governance. If the number of candidates equals the number of vacancies.

Directors’ Report Unilever Pakistan Limited .

12 .

penetration.273 246 38. Million) 44. effective communication. On top of factors like floods. trial and promotional campaigns.Rs. the Company registered a robust top-line growth of 17%. coupled with strategic investment behind brands.780 3.Rupees 40. we have proposed to the government to reduce the combined impact of import duty and sales tax to bring smuggled tea into the official net. Sales Gross Profit Gross Profit as a % of sales Profit from Operations Profit from Operations % sales Profit before tax Profit after tax EPS (Rs) 44. Over the three years to 2010. Despite this challenging environment.970 11. Unilever Pakistan also suffered due to rampant smuggling of tea.943 12.000 127 2007 149 23.13 4. but is not in its self sufficient to curb smuggling.672 14. as only half the 180. The Spreads business achieved double digit volume-led growth as a result of improved visibility.laundry. in Millions Improved controls over the movement of tea in transit to Afghanistan would help the matter to an extent.957 230 246 300 EPS . bold market place activities and increased advertising contributed to impressive double digit growth. Along with the Pakistan Tea Association.188 30. achieved 33% growth.7% of our sales was affected by smuggling. promote transparency and create a level playing field for legitimate operators.577 32.000 20. virtually all from volume. Turnover was fuelled by strong volume gains in Home and Personal Care. Strong volume and value growth resulted in 7. fuelled by strong innovation.92 4. tea will be smuggled into Pakistan through the Iran/Afghanistan route. respectively. Rising input costs which were not entirely passed on to consumers.Directors’ Report The Directors are pleased to present the 2010 Annual Report together with the audited financial statements of the Company for the year ended December 31.188 13. Unilever Pakistan Sales and EPS nearly doubled over three years 50.332 250 200 150 100 2008 Net Sales 2009 EPS 2010 Growth of the Tea business which represents 29.516 3. Despite frequent power outages the Ice Cream business. double digit inflation. Impactful innovation. 2010. Sales and EPS have nearly doubled. More alarmingly. better and faster innovations and more focused advertising.335 34. deteriorating security environment and debilitating power cuts which impacted businesses in Pakistan in 2010. Fuelling this are bigger.056 230 13 .000 30. assure the government of its current tax revenue.63 4.000 Sales.1% higher Profit after Tax and Earnings Per Share (EPS). Home & Personal Care continues to deliver robust double digit sales growth on the back of strong volume and share gains in key categories .94 4. Without reduction in taxes and therefore the incentive to evade. impacted Gross and Operating Margins by 229 bps and 181 bps.000 tons of tea consumed in Pakistan is officially imported. Ice Cream and Spreads. Summary of Financial Performance 2010 2009 (Rs. This will result in lower prices for consumers for whom tea is the drink of choice. low GDP growth. hair care and skin care.000 10. the incentive to smuggle is growing with the sharp increase in raw tea prices in the international markets.672 38.

Lifebuoy’s skin cleansing range was augmented with liquid hand and body wash.000 1. helped the brand achieve double digit growth.000 9. 246 (2009: Rs.1% for the year. together with lower operating costs. 157 per ordinary share.809 11.6%). Sunsilk was re-launched under the “Co-Creation” theme which. In 2010. Lux recorded double digit growth largely led by volume. The business delivered an operating margin of 16. Total profit distributed by way of dividend amounts to 99.000 17.000 6. and continues to strengthen the brand equity. the total dividend for the year 2010 amounts to Rs.000 13. In Millions 13. The key business milestones were: Home and Personal Care Sales grew by more than 15% on account of robust volume growth. along with 500 0 2009 2010 Segment Profits 14 . the adverse effects of which were not fully passed on to consumers. Its re-launch and new packaging yielded immediate results.000 4. along with affordable packs.000 Key brand highlights were: Surf Excel continued to register double digit growth.391 5.000 2. The brand grew by more than 23% based on its message of “Healthy Hoga Pakistan”. With the interim dividend of Rs.Rs.000 2009 2010 Segment Profits 14.592 7. Lifebuoy shampoo successfully delivered double digit growth on the back of a new.695 1.860 1.000 Sales . animated market development campaign which supported the brand re-launch.000 8.000 2007 2008 Net Sales 16.000 Sales .801 3. A strategic price correction during the year yielded positive results.000 Profits .000 2007 2008 Net Sales 9. Fair & Lovely delivered its 7th year of double digit turnover growth.Dividend The Board of Directors has recommended a final cash dividend of Rs.500 Profits . In Millions 21. resulted in a decline in gross margin.Rs. Cumulative growth over three years stands at 110%.000 5. helped improve the brand equity.Rs. the business saw an increase in material cost.9% (2009: 99. partially mitigated the margin decline. This. Home & Personal Care Cumulative growth of 110% over three years powerful consumer promotions. The brand was re-launched with the “one minute” campaign which.Rs. In Millions 12. 89 per share already paid during the year.000 4. Pond’s continued its image transformation with the premium “Anti-Aging” and “White Beauty” creams gaining ground. The brand gained market share based on an improved product and a more effective campaign. This was partly offset by more effective advertising which. In Millions 24. together with some volume loss on account of floods.000 10. Beverages Beverages 25. 50 each. Competitive heat in 2010 was significant.722 21.272 11. 229) per ordinary share of Rs.

Our People Unilever takes pride in its people. resilience and commitment of our people. due to unprecedented levels of smuggled Kenyan tea in the country. In December. to deliver robust top line growth of 33. virtually all from volume. Free availability of smuggled tea remained a major point of concern for all local branded players. It further strengthened its base by driving penetration outside Karachi into new geographies and channels. The cumulative growth over the last three years has been 80%. Lipton strengthened its positioning and continued the growth momentum through “Theanine” and “Strong” campaigns. Brooke Bond Supreme had a challenging year. In Millions 3. sustained airing of the “Chaske Zindagi Kay” campaign. our flagship brand.500 Sales . Pearl Dust had a tough year as Dust tea prices rose to unprecedented levels.825 3. Lipton.500 1. The latter was made possible through extensive cost rationalization programmes. Gross Margins were under pressure during the year as tea prices hit record high due to an upsurge in global demand.5% mainly through price increases.Rs. Supreme broke with the “Tandrust Rahein. with deteriorating economic and security conditions.548 5. The highlight of the year was the successful “Quality Jo Challenge” campaign in which 81% of consumers preferred Pearl Dust over its competition in blind test and helped the brand gain significant momentum heading into 2011. increasing availability and visibility through visi-coolers and outstanding outdoor advertising. Mast Rahein” campaign to remind consumers of the health benefits of tea. represents good taste and is a blend of best teas from around the world. improvement of cabinet throughput and restructuring of distribution operations. However. This was achieved by focusing on the Rs. stagnant supply and currency devaluation. engaging consumer activation and a successful consumer promotion helped in ensuring that Supreme stayed resilient to market changes. Further.500 -500 3. the overall brand communication on the “growth meter” helped establish the child growth message and gain market share. overcoming severe electricity crisis in the summer season.Rs. these challenges grew because of the devastating floods.163 200 2007 2008 Net Sales 2009 2010 -100 Segment Profits 15 . Cumulative growth of 80% over three years Ice Cream 5. The continued good performance of the business in the midst of such an environment demonstrates the calibre. Ice cream Wall’s continued its growth journey in 2010.2% on the back of robust volume growth.Sales grew by 13. In Millions 800 500 Profits . In 2010.074 4. Spreads Spreads category grew by 20.10 low unit price pack. Blue Band Margarine continued to grow by building relevance and accessibility. The operating environment in Pakistan continues to be challenging.3%. This was achieved by building consumer pull through exciting innovations like “Badami” and “Cornetto Double Chocolate” and by correcting the price equation across the portfolio.

share business initiatives and performance and to reiterate our vision. We have taken personal development to another level of excellence through empowering people with bigger as well as challenging assignments.Our personal vitality “health passport” initiative has consistently been delivering results in terms of employee well-being. together with a policy targeting a higher number of females is designed to enhance the Company’s ability to understand and respond to consumer needs. national and global partners. Growth Mindset. mentoring and the appraisal system: “Performance Development Planning”. Our initiatives including a Day Care Centre . We have a strong. The Chairman’s quarterly web cast remains an important platform to engage employees. Our efforts will be focused on sustaining it in 2011. We contribute to economic. Initiatives outlined above. Unilever globally has transitioned from classroom training to virtual E-Learning in 2009 by providing latest international training modules online. helped in engaging people. In 13 of the 16 dimensions on which feedback was sought in the Unilever Global People Survey of June 2010. In-house communication initiatives such as Daily Digest. Diversity. High levels of positive scores were registered in the areas of Employee Engagement. belief in the Company Leadership. a set of behaviours that are deemed vital to be a good leader. have helped in generating positive energy in the business which acts as an important catalyst for growth. coaching. U Connect. healthier and environmentally friendly products which meet their everyday needs. Agile working programme introduced in 2010 which facilitates managers to operate one day in a week out of home. are well embedded in the organization. monthly Functional HR Updates and institutionalising Functional Resource Committees. Continuous and consistent communication is vital for engaging our people. This continues to be reinforced each Monday in the departmental Values meetings. sales. Initiatives like the gym facility and healthy eating options through a “vitality menu” at our cafeteria have all along been key contributors in improving the health of our people. We continue to leverage our parent company’s wealth of knowledge to develop talent in marketing. flexi working hours introduced in 2009. Unilever has kept talent retention as a top priority with 1% regretted loss rate. supply chain. we already have more than 50% female managers. we aim to provide consumers with better. We believe that the highest standards of corporate behaviour in our society are essential to our long term success. The Company accords the highest priority to promoting a diverse talent base. Further. By working with reliable local. Teamwork and Consumer & Customer Focus. environmental and social agendas through our actions. we continue to place emphasis on work life balance. longstanding commitment to our communities and “doing well by doing good” is a constant theme that underlines our actions. Unilever Standards of Leadership (SOL).a facility fully utilised by working mothers as well as managers whose wives work elsewhere. Unilever Pakistan scored higher than Unilever’s Asia Africa Central Eastern Europe (AAC) region to which we belong. finance and human resource management. but has also contributed in reducing travel costs. as well as sports activities. Unilever Pakistan continues its structured approach for talent management and the development of leadership skills. This not only has helped in taking our capability building to a higher level. 16 . In key market-facing roles. Community Involvement Unilever Pakistan is a multi-local multinational with strong local roots.

ii. Two projects based on setting up hand pumps and basic health facilities were selected for assistance under this grant scheme. Additionally. iii.35. a number of initiatives have been taken in factories. This helps share the carbon footprint on round trip. b) E n g i n e e r i n g i m p r o v e m e n t s i n manufacturing. Some of these are: a) WWF Green Office Program for Head Office. collaborating with non competitors.6 million a) Unilever contributes to multiple community projects through the Unilever Annual Grant Scheme.During 2010. Corporate Philanthropy: Rs. our main initiatives included: i. Along side this. iv. Community Investment and Welfare Schemes: Rs. 17 . c) Sustainable packaging through PVC removal in HPC (Hair Care) packaging. Unilever Pakistan is also investing in the resource and capability building areas of eco-efficient practices. b) Logistics joint initiatives: Utilization of vehicles on return trip. Workshops and trainings have been conducted to educate young managers and factory leaders on Environment Management Tools.0 million energy saving and reduction of waste and water consumption. c) Balancing air conditioning load and use of eco-efficient lighting at the offices. Key initiatives include: a) Distribution Centre rationalization & cross docking: Using the “right sized” vehicles for each route and optimization of vehicle routes as per vehicles loads. 21. computer monitors and other electronic equipment when not required. depots and transportation to conserve energy. simplifying soap manufacturing process resulting in Unilever’s commitment to reduce environmental impact extends across our value chain and we aim to continually improve our management systems to deliver consistent and measurable progress. Environmental Protection Measures: a) Making quality primary education available to the lesser privileged working with: • The Citizens Foundation (TCF) in its schools programme • Supporting government schools through Public Private Partnerships b) Economic empowerment through partnerships with Beaconhouse National University and Ghulam Ishaq Khan Institute of Engineering Sciences and Technology c) Supporting health care organizations such as Layton Rehmatullah Benevolent Trust (LRBT).project SWING (Soap with Inclusion of Glycerine). The Aga Khan University and Hospital and The Kidney Centre Postgraduate Training Institute. d) Lux process modification . Energy Conservation: Unilever has initiated an internal programme to reduce energy consumption by encouraging employees to switch off lights.

Unilever’s global SHE standards are the key building blocks of its system and the top management regularly monitors the performance through leading and lagging indicators of all its Manufacturing and Non-Manufacturing Units. Unilever facilitates and accommodates the special needs of its employees. Internally. The company has taken strides to engage other companies and its business partners. the funds for which were raised through internal events and voluntary donations from employees through a payroll deduction system. d) For the fourth year. Unilever Pakistan continues to excel in safe travel by pursuing some leading edge initiatives such as “defensive driving”. “behavioural risk assessment” and “route risk assessments” to pro-actively identify and manage driving-related risks. Health & Environment (SHE). g) Wall’s Ice Cream Factory in Lahore set up a free dispensary for the community members around the factory premises. Unilever Pakistan’s management has been persistent in pursuing the journey of achieving excellence in Safety. Care ‘n’ Cure. i n t e g r a t i n g experiential learning into Government curriculum and training teachers. through external Industrial HSE Networks (IHSEN). Additionally. the Blue Band margarine brand worked with the UN World Food Programme in contributing over 82. It also supported the nationwide event “Design for Change”. c) The brand Surf through the “Every Child Has the Right Campaign” expanded its work with Idara-e Ta l e e m . Major focus has also been on off-the-job safety. v. In line with Unilever’s mission of creating a better future every day. The brand also carried out a campaign on print and TV for Swine Flu earlier in the year. vii.o . vi. Occupational Safety and Health: Occupational health & safety continues to be among the Company’s top priorities.A a g a h i .604 meals. it is engaged in raising awareness of and addressing the growing menace of counterfeiting.b) The Lifebuoy brand partnered with Idara-e-Taleem-o-Aagahi. for hand washing activities across the country. by conducting learning and awareness programmes for employees’ families. Consumer Protection Measures: The Company operates a complaints call centre called Raabta to receive consumer feedback. e) Fair & Lovely worked towards women empowerment and sponsored 11 students at Beaconhouse National University and the Institute of Professional Learning. Safety and Wellness Weeks have been initiated to raise awareness of key issues. Employment of Special Persons: The Company believes in equal opportunity hiring. 18 . it places SHE at the heart of its business agenda. f) Lux sponsored students from four fashion institutes in Pakistan through the Lux Style Awards platform.

9 billion . Idara-e-Taleem-o-Aagahi a n d the local governments in Rahim Yar Khan and Khanewal. Unilever also made donations to its distributor sales representatives who were affected by the floods. Our employees provide monetary as well as skill support to various organizations such as UN World Food Programme. National Cause Donations: Rs.475 36 22 2.8 billion or 68. Employees are also required to sign off on the CoBP each year. UN World Food Programme. Employee Involvement Community and environment support at Unilever Pakistan Limited is extended beyond Company initiatives to its people. 2010 are as follows: (Rs. Pleasures.69%) of its value added to the national exchequer by way of import duties. Business Ethics and Anti-Corruption Measures: Unilever holds frequent activities to ensure that the employees are working within the Code of Business Principles (CoBP).571 Code of Corporate Governance The management of the Company is committed to good corporate governance and complying with the best practices.64. ix. the Directors are pleased to state as follows: • The financial statements prepared by the management of the Company present 19 . Unilever employees in Pakistan and other countries also donated towards the cause. income tax and other government levies. Layton Rehmatullah Benevolent Trust and The Kidney Centre. Investment in Retirement Benefits The investments made by the staff retirement funds operated by the Company as per their financial statements at December 31.3 million (in addition to Rs. 113 million donated by our parent company. WWF Pakistan. The amount of the local employee contributions was matched by the Company and donated to The Citizens Foundation for their school rehabilitation programme. sales and distribution teams and global and local partners for flood relief and rehabilitation. Lifebuoy ran a campaign for a call-toaction on TV for the flood relief work. The Citizens Foundation. UNICEF. PSI Greenstar Social Marketing Pakistan. Million) The Union Pakistan Provident Fund DC Pension Fund Unilever Pension Plan Unilever Gratuity Plan Unilever Non Management Staff Gratuity Fund Total Total – 2009 850 288 1. 9. 10. Unilever Brands also generously supported the cause through product donations. general sales tax. Our partners include Oxfam. Contribution to National Exchequer: The Company contributed Rs.viii. The CoBP is rigorously followed throughout the organization. x. Unilever Pakistan worked with its employees.671 2. 113 million donated by our parent company) In addition to the Rs. Karachi Vocational Training Centre. As required under the Code of Corporate Governance.06% (2009 Rs. 13. Save the Children.

Auditors The Auditors. Appropriate accounting policies have been consistently applied in preparation of financial statements and accounting estimates are based on reasonable and prudent judgement. The Audit Committee comprises of three members. Messrs A. The system of internal control is sound in design and has been effectively implemented and monitored. F. Unilever Overseas Holdings Limited (UOHL). UK. retire at the conclusion of the meeting. of whom two are non-executive directors including the chairman of the committee. There has been no departure from the best practices of corporate governance.fairly its state of affairs. Unilever PLC. Chief Financial Officer and Company Secretary and their spouses and minor children. cash flows and changes in equity. The three years term of office of the present Directors expires on April 18. Pattern of shareholding. as detailed in the listing regulations. There are no significant doubts upon the Company's ability to continue as a going concern. Statements regarding the following are annexed or are disclosed in the notes to the financial statements: Number of Board meetings held and attendance by Directors. a company incorporated in the United Kingdom. Ferguson & Co. Being eligible. International Financial Reporting Standards have been followed in preparation of financial statements and any departure therefrom has been adequately disclosed. • • • 20 . Chartered Accountants. they have offered themselves for re-appointment. Subsidiary Companies and Consolidated Financial Statements The financial statements of the under mentioned subsidiaries of Unilever Pakistan Limited are included in the consolidated financial statements. is the holding company..07% of the shares in Unilever Pakistan Limited. • • • Lever Chemicals (Private) Limited Levers Associated Pakistan Trust (Private) Limited Sadiq (Private) Limited • • Holding Company • Through its wholly owned subsidiary. None had any significant or material business transactions during the year. • Proper books of account of the listed Company have been maintained. owning 75. 2011. Chief Executive. the result of its operations. Dealing in shares of the Company by its Directors. Key financial data for the last six years.

The Company plans strategic investments in brands.153) 2. volatility in raw tea prices.643 3. economic recovery will be a challenge. 2011 21 .243 3.incremental depreciation for the year Dividends For the year ended December 31. the country provides immense opportunities for growth due to increasing population. 2009 .260) 70. customer development and supply chain.273. 2010 70.441 (1.Interim dividend on ordinary shares @ Rs 89 per share Balance as at December 31.229. we are able to attract.471 - 2.Reserve Appropriations CAPITAL Arising under schemes of arrangements for amalgamations RESERVES (Rs in thousands) REVENUE Unappropriated profit TOTAL Contingency Balance as at January 1. relative increase in affluence and awareness in rural areas and significant disparity in per capita consumption relative to other markets in which Unilever operates.202 2.183.929 - 321. 2010 . Foremost. security environment and the ongoing gas and electricity shortages will continue to put pressure on business performance. Malik Chairman & Chief Executive Karachi February 14.890. with a constant stream of innovation and customer-related improvements. This is the basis of our long term confidence.183. Our capabilities continue to improve in many areas including marketing.841 Business Risks and Future Outlook In the aftermath of devastating floods and increasing fiscal weakness. distribution and infrastructure to tap into this potential. Thanking you all On behalf of the Board Ehsan A.202 - - 648 648 - - (239) (1. leveraging scale for sourcing raw materials and finished products. We also have a strong network. develop and retain the best talent in the country. 2010 Net profit for the year Transferred from surplus on revaluation of fixed assets .273.net of deferred taxation: .621. Counterfeiting of our popular brands continues to have a negative impact on results. smuggling of tea.821. Growing inflationary pressure from rising commodity costs.471 (1.Final dividend on ordinary shares @ Rs 137 per share For the year ended December 31. This could impact near-term profitability.260) (239) (1. Despite economic difficulties.929 321. We have access to Unilever’s know-how and R&D.153) 2.821.498.On cumulative preference shares @ 5% per share . growing middleclass.

Malik Mr. Qaysar Alam Mr. M. Zaffar A. Amir R. Khan Mr. of Meetings attended 4 5 5 5 5 4 3 22 .Board Meetings’ Attendance During the year 2010. five Board Meetings were held and were attended as follows: Directors Mr. Ehsan A. Shazia Syed Mr. Imran Husain Mr. Khalid Rafi Ms. Paracha No.

570) 2.501 664 5 2.406 (1.588 6.137 607 3.974 9.761 609 3.671 6.335 4.486 1.585 6.084 664 5 1.Operating and Financial Highlights Unit FINANCIAL POSITION Balance sheet Property.925 1.369 23.246) (1.557 11.178 1.161 1.391 2.075 8.847 16 369 3.216 (878) (2.980 14 502 5.639 2.273 3.743 2.807 664 5 1.984 1.430 664 5 1.182 (885) (3.386 (2.126) (235) 586 365 Rs in M Rs in M Rs in M 6.083 2.530 1.575 3.470 9. plant and equipment Other non-current assets Current assets Total assets Ordinary share capital Preference share capital Reserves Total equity Surplus on revaluation of fixed assets Non-current liabilities Current liabilities Total liabilities Total equity and liabilities Net current (liabilities) / assets OPERATING AND FINANCIAL TRENDS Profit and loss Net sales Gross profit Operating profit Profit before tax Profit after tax Ordinary cash dividends Capital expenditure Cash flows Operating activities Investing activities Financing activities Cash and cash equivalents at the end of the year Rs in M 1.901 (433) (1.122 11.897 1.687 1.944 5.742) 2.635 1.237 4.577 5.482 1.560 12 955 8.737 1.157 11.216 13 687 8.632 1.516 3.547) 4.177 7.656) (1.547 2.056 3.672 14.830 15 348 4.426 (1.190) 4.020 7.132 5.090 8.929 13.635 1.044 872 30.011) 97 (1.102 8.957 10.686 6.270 921 38.427 13.513) 2.602 1.714 20.038) 5.848 11.943 4.084 (1.426 664 5 2.110 5.531 479 4.481) 3.891 3.550 2.430 (551) 1.622 684 17.428 1.311 1.780 3.386 664 5 1.988 7.437 5.862) Rs in M Rs in M Rs in M Rs in M Rs in M Rs in M Rs in M 44.332 9.807 (138) 2010 2009 2008 2007 2006 2005 23 .738 3.559 2.501 (1.622 3.675) 1.461 (798) (3.060 4.595 510 Rs in M Rs in M Rs in M Rs in M Rs in M Rs in M Rs in M Rs in M Rs in M Rs in M Rs in M Rs in M Rs in M Rs in M 4.854 2.291 13 1.431 (534) (1.188 13.

1 - - days days times times 4 46 3 9 4 58 3 8 3 64 3 7 3 63 3 7 2 54 3 10 2 59 3 10 246 246 100 492 6 18 268 269 2.576 13.3 0.060 1.continued Unit FINANCIAL RATIOS Rate of return Pre tax return on equity Post tax return on equity Return on average capital employed Interest cover Profitability Gross profit margin Pre tax profit to sales Post tax profit to sales Liquidity Current ratio Quick ratio Financial gearing Debt equity ratio Total debt ratio Capital efficiency Debtors turnover Inventory turnover Total assets turnover Property.280 1.000 26.294 230 229 100 458 10 10 248 249 1.0 0.294 123 122 99 244 6 16 138 139 1.712 4.808 2.8 0.964 13.588 13.1 0.691 3.high Market value .4 1.7 0.earnings Dividend payout ratio .280 30.808 24.360 57. 24 .7 0.2 0.100 2.year end Market capitalisation .4 0.2 0.725 2.528 1.475 2.02 0.low Market value .5 0.286 2.625 2.year end Ordinary shares of Rs 50 each Rs Rs % % % times Rs Rs Rs Rs Rs Rs Rs in M No.300 30.294 149 123 83 246 7 12 167 168 1.310 13.1 0.294 Note: Previous years' figures have been restated in accordance with audited financial statements.3 0.032 13.average Market value .2 0.9 0.910 2.8 0.760 2.305 4.294 120 120 100 240 7 15 139 140 1.6 0.154 1.775 1. plant and equipment turnover Investment measures per ordinary share Earnings Dividend payout (including proposed) Dividend payout ratio .par value Dividend yield Price earning ratio Breakup value without surplus on revaluation Breakup value with surplus on revaluation Market value .Operating and Financial Highlights .294 127 123 97 246 5 18 149 150 2.775 23.597 13.501 2.000 2. in thousand 2010 2009 2008 2007 2006 2005 % % % times 134 92 80 34 137 93 62 20 132 90 49 18 128 85 77 84 136 89 82 223 134 87 72 141 % % % 33 11 7 35 12 8 35 9 6 39 11 7 37 12 8 38 14 9 0.

Operating and Financial Highlights - continued
Profit before tax and as % of sales

6000 5000 Rs in million 4000 3000 2000 1000 0

16 14 14 12 11 9 12 11 12 10 8 6 4 2 0 % of sales %

2005

2006

2007
Years

2008

2009

2010

Profit before tax

Profit beore tax as % of sales

Ordinary dividend payout 492 458

3500 3250 3000 2750 2500 2250 2000 1750 1500 1250 1000 750 500 250 0

240

244

246

246

100

99

97

83

100

100

500 475 450 425 400 375 350 325 300 275 250 225 200 175 150 125 100 75 50

Rs in million

2005

2006
Dividend

2007 Years

2008

2009

2010

DPR to par value/share

DPR to EPS

Earnings per share 246 240 225 210 195 180 165 150 135 120 105 90 75 60 45 30 15 0 230

149 120 123 127

Rupees

2005

2006

2007 Years

2008

2009

2010

25

Statement of Value Addition & its Distribution
2010 Rs in ‘000 WEALTH GENERATED Total revenue inclusive of sales tax and other income Bought-in material and services % 2009 Rs in ‘000 %

55,136,743 (34,905,906) 20,230,837 100%

46,861,852 (29,930,364) 16,931,488 100%

WEALTH DISTRIBUTION To Employees Salaries, benefits and other costs Restructuring Cost To Government Income tax, sales tax, excise duty and custom duty, WWF, WPPF To Society Donation towards education, health and environment To Providers of Capital Dividend to shareholders Mark-up/ interest expenses on borrowed funds To Company Depreciation, amortization & retained profit Contingency Reserve

2,367,174 90,000

11.70% 0.44%

2,153,205 -

12.72% 0.00%

13,769,607

68.06%

10,952,391

64.69%

33,780

0.17%

30,215

0.18%

3,004,413 144,068

14.85% 0.71%

1,980,787 243,070

11.70% 1.44%

821,795 20,230,837

4.06% 0.00% 100%

1,571,820 16,931,488

9.28% 0.00% 100%

WEALTH DISTRIBUTION 2010
To Employees
0.17% 15.56%

WEALTH DISTRIBUTION 2009
0.18% 13.13%

To Employees To Government
9.28%

To Government To Society To Providers of Capital To Company
64.69%

4.06% 12.15%

To Society To Providers of Capital To Company

68.06%

12.72%

26

Pattern of Shareholding
as at December 31, 2010
Number of Shareholders Shareholding Total Number of Shares Held*

From

To

2,705 762 158 151 16 4 3 1 3 2 1 3 1 1 1 1 1 1 1 1 1 3,818

1 101 501 1,001 5,001 10,001 15,001 20,001 25,001 30,001 35,001 40,001 45,001 50,001 80,001 90,001 110,001 420,001 585,001 710,001 9,980,001

100 500 1,000 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 55,000 85,000 95,000 115,000 425,000 590,000 715,000 9,985,000

79,397 172,846 116,376 300,810 111,985 44,378 52,423 20,042 76,521 64,481 36,000 126,888 95,249 54,541 84,400 90,987 111,589 423,402 585,025 712,947 9,981,417 13,341,704

Shareholders’ Category

Number of Shareholders

Number of Shares Held

Percentage %

Associated Co., Undertakings * NIT and ICP * Directors, CEO Executives Public Sector Co. and Corporation Banks, DFI, NBFI's Modarabas and Mutual Funds Insurance Companies Others * Individuals * * Includes Voting Preference Shares.

1 3 3 2 1 10 5 6 98 3,689 3,818

10,015,152 111,899 1,121 65 423,402 58,304 8,893 68,489 1,902,551 751,828 13,341,704

75.07 0.84 0.01 0.00 3.17 0.44 0.06 0.51 14.26 5.64 100.00

27

304 1 1 1 1. M. Khalid Rafi Mr.015.020 1 100 1 111.CEO and their spouses and minor children (name wise details) Mr.015.902.402 58. NIT & ICP (name wise details) National Bank of Pakistan. 1 10. Qaysar Alam Executives Mr.899 1 10. Trustee Deptt. Amar Naseer Mrs.Pattern of Shareholding . Mahvash Imad W/o Syed Imad Mashhadi (Unilever Employee) Public Sector Companies & Corporation Banks. Development Finance Institutions Non-Banking Finance Institutions Modarabas and Mutual Funds Insurance Companies Others 1 1 1 10 5 60 423.893 68. Khan Mr.152 28 .489 1.152 5 6 98 8. Directors. 2010 Shareholders' Category Number of Shareholders Number of Shares Held Associated Companies (name wise details) Unilever Overseas Holdings Ltd.551 Shareholders holding 10% or more voting interest (name wise details) Unilever Overseas Holdings Ltd. Zaffar A.Additional Information as at December 31.

Amar Naseer Acquired during the year 1 Transferred during the year 1 29 . 1 S.No.Dealings in Shares by Directors. 1 Name Mr. Company Secretary and Employees During 01-01-2010 to 31-12-2010 S. Khalid Rafi Name Mr. CEO.No. CFO.

based on the significance of the matters involved. The financial statements of the Company were duly endorsed by CEO and CFO before approval of the Board. At present the Board includes two independent non-executive directors.Statement of Compliance with the Code of Corporate Governance This statement is being presented to comply with the best practices of the Code of Corporate Governance (the Code). The Directors' Report for this year has been prepared in compliance with the requirements of the Code and fully describes the salient matters required to be disclosed. 2. a complete record of particulars of significant policies along with the dates on which these were enacted has been maintained. 3. a DFI or an NBFI or. The directors have confirmed that none of them is serving as a director in more than ten listed companies. 2009 which was duly filled during the year. traditionally. 7. The meetings of the Board were presided over by the Chairman and. 8. 10. The Company arranges orientation courses / meetings for its directors. has been declared as a defaulter by that stock exchange. 6. in his absence. including this Company. have been taken by the Board. being a member of a stock exchange. along with agenda and working papers. All the powers of the Board have been duly exercised and decisions on material transactions. set out in the listing regulations of Stock Exchanges in Pakistan for the purpose of establishing a framework of good governance. The Company had already adopted and circulated a 'Code of Business Principles'. The Company encourages representation of independent non-executive directors and directors representing minority interests on its Board of Directors. in the following manner: 1. including appointment and determination of remuneration and terms and conditions of employment of the CEO and other executive directors. A casual vacancy on the Board of Directors occurred on December 31. 11. All the resident directors of the Company are registered as taxpayers and none of them have defaulted in payment of any loan to a banking company. The Company has a Vision Statement. The Company has applied the principles contained in the Code. The minutes of the meetings were appropriately recorded and circulated. maintains and follows policies designed to align with the Unilever group of companies and global best practices in agreement with the Board. The Company. as and when required. 30 . The Board considers any significant amendments to the policies. However. whereby a listed company is managed in compliance with the best practices of corporate governance. were circulated before the meetings. Written notices of the Board meetings. 9. by a director elected by the Board for this purpose and the Board met at least once in every quarter. which has been signed by all the directors and employees of the Company. 4 5.

The statutory auditors or the persons associated with them have not been appointed to provide other services except in accordance with the listing regulations and the auditors have confirmed that they have observed IFAC guidelines in this regard. The Company has complied with all the corporate and financial reporting requirements of the Code. of whom two are non-executive directors including the chairman of the committee. 15. that they or any of the partners of the firm. CEO and executives do not hold any interest in the shares of the Company other than that disclosed in the pattern of shareholding. 16. 18. 20. 14.12. 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. It comprises of three members. and appropriate steps are taken to comply with the best practices. 17. Malik Chairman & Chief Executive 31 . The management of the Company is committed to good corporate governance. The statutory auditors of the Company have confirmed that they have been given a satisfactory rating under the quality control review programme of the Institute of Chartered Accountants of Pakistan. The staff is considered to be suitably qualified and experienced for the purpose and is conversant with the policies and procedures of the Company and is involved in the internal audit function on a full time basis. 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 the Institute of Chartered Accountants of Pakistan. The Company has an effective internal audit function. The related party transactions have been placed before the Audit Committee and approved by the Board of Directors along with pricing methods for transactions carried out on terms equivalent to those that prevail in the arm’s length transactions. Karachi February 14. The terms of reference of the Committee have been formed and advised to the committee for compliance. 13. The Board has formed an audit committee. The directors. 19. 2011 Ehsan A.

We have not carried out any procedures to determine whether the related party transactions were undertaken at arm’s length price or not. A. in all material respects. We are only required and have ensured compliance of requirement to the extent of approval of related party transactions by the Board of Directors and placement of such transactions before the audit committee. Chartered Accountants Karachi February 18.Auditors’the Members on ReportCompliance with Best Practices of Review Statement of Review Report to Code of Corporate Governance We have reviewed the Statement of Compliance with the best practices contained in the Code of Corporate Governance prepared by the Board of Directors of Unilever Pakistan Limited to comply with the Listing Regulation no. 2011 32 . A review is limited primarily to inquiries of the Company personnel and review of various documents prepared by the Company to comply with the Code.Ferguson & Co. Listing Regulations of the Karachi. Further. Based on our review. 35 of the Karachi. Lahore and Islamabad Stock Exchanges where the Company is listed. Further. The responsibility for compliance with the Code of Corporate Governance is that of the Board of Directors of the Company. nothing has come to our attention which causes us to believe that the Statement of Compliance does not appropriately reflect the Company’s compliance. Our responsibility is to review.F. whether the Statement of Compliance reflects the status of the Company’s compliance with the provisions of the Code of Corporate Governance and report if it does not. As part of our audit of financial statements we are required to obtain an understanding of the accounting and internal control systems sufficient to plan the audit and develop an effective audit approach. Lahore and Islamabad Stock Exchanges require the Company to place before the Board of Directors for their consideration and approval of related party transactions distinguishing between transactions carried out on terms equivalent to those that prevail in arm’s length transactions and transactions which are not executed at arm’s length price recording proper justification for using such alternate pricing mechanism. to the extent where such compliance can be objectively verified. or to form an opinion on the effectiveness of such internal controls. We are not required to consider whether the Board’s statement on internal controls covers all risks and controls. with the best practices contained in the Code of Corporate Governance as applicable to the Company for the year ended December 31. the Company’s corporate governance procedures and risks. 2010. all such transactions are also required to be separately placed before the audit committee.

Financial Statements 2010 Unilever Pakistan Limited .

34 .

and are in agreement with the books of accounts and are further in accordance with accounting policies consistently applied. evidence supporting the amounts and disclosures in the above said statements. its cash flows and changes in equity for the year then ended. (c) in our opinion and to the best of our information and according to the explanations given to us. (ii) the expenditure incurred during the year was for the purpose of the Company's business. An audit also includes assessing the accounting policies and significant estimates made by management. for the year then ended and we state that we have obtained all the information and explanations which. were necessary for the purposes of our audit. (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. cash flow statement and statement of changes in equity together with the notes forming part thereof conform with approved accounting standards as applicable in Pakistan. profit and loss account. to the best of our knowledge and belief. 1984.F. We conducted our audit in accordance with the auditing standards as applicable in Pakistan.Auditors' Report to the Members We have audited the annexed balance sheet of Unilever Pakistan Limited as at December 31. 1984. the balance sheet. on a test basis. as well as. 1984. An audit includes examining. and (d) in our opinion. Our responsibility is to express an opinion on these statements based on our audit. was deducted by the Company and deposited in the Central Zakat Fund established under section 7 of that Ordinance. Chartered Accountants Karachi Dated: February 18. and prepare and present the above said statements in conformity with the approved accounting standards and the requirements of the Companies Ordinance. after due verification.Ferguson & Co. cash flow statement and statement of changes in equity together with the notes forming part thereof. investments made and the expenditure incurred during the year were in accordance with the objects of the Company. and (iii) the business conducted. 1980 (XVIII of 1980). 1984. and give the information required by the Companies Ordinance. 2011 Name of Engagement Partner: Ali Muhammad Mesia 35 . we report that: (a) in our opinion. Zakat deductible at source under the Zakat and Ushr Ordinance. 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. evaluating the overall presentation of the above said statements. 2010 and of the profit. It is the responsibility of the Company’s management to establish and maintain a system of internal control. proper books of accounts have been kept by the Company as required by the Companies Ordinance. in the manner so required and respectively give a true and fair view of the state of the Company's affairs as at December 31. 2010 and the related profit and loss account. We believe that our audit provides a reasonable basis for our opinion and. A.

338 3.897.prepayments 3 4 5 6 7 8 4.426.553 5.202 98.070 506.881.202 83.501.052 239.887 27.736.054 5.425.800 6.394 1.997 148.141 355.357 131.110 7.107 11.117 392.Balance31.758.826 82.649.868.557.171 821.896 188.420 3.964 265.007 522.556 95.715 36 .086 95. 2010 Sheet as at December Note 2010 2009 (Rupees in thousand) ASSETS Non-current assets Property.271 Total assets 13.699 243. plant and equipment Intangibles Long term investments Long term loans Long term deposits and prepayments Retirement benefits .852 327.619 357.795 126.661 70.074.960 466.444 Current assets Stores and spares Stock in trade Trade debts Loans and advances Trade deposits and short term prepayments Other receivables Tax refunds due from the Government Cash and bank balances 9 10 11 12 13 14 15 16 357.143 4.

928.973.643 3.841 3.709 9.890.630 Total liabilities Contingencies and commitments Total equity and liabilities The annexed notes 1 to 46 form an integral part of these financial statements.317 12.705 16.877 397.802 954.621.120 Surplus on revaluation of fixed assets Liabilities Non-current liabilities Liabilities against assets subject to finance leases Deferred taxation Retirement benefits obligations 19 12.680 7.472 25 13.501.560.762 636.952 Current liabilities Trade and other payables Accrued interest / mark-up Short term borrowings Current maturity of liabilities against assets subject to finance leases Provisions 22 23 20 24 8.143 28.715 5.419 220.019.060 1.818 576.800 8.785.101.Note EQUITY AND LIABILITIES Capital and reserves Share capital Reserves 17 18 2010 2009 (Rupees in thousand) 669. Malik Chairman & Chief Executive Imran Husain Director & Chief Financial Officer 37 .911 28.965 20 21 8 19.776 28.121.233.143 358.184 297.291.130 327.425.763 56.037.892 1.678 8.477 2.477 2.318 669. Ehsan A.107 11.

313 4.881 Restructuring cost Profit from operations Finance costs Profit before taxation Taxation Profit after taxation 33 32 (90. 2010 Note 2010 2009 (Rupees in thousand) 44.282 13.459.708) 4.507 38.507.740 28 29 30 31 (8. Ehsan A.000) 4.881 (189.671.313 4.187.096) 3.852.605 (1.582 Sales Cost of sales Gross profit Distribution costs Administrative expenses Other operating expenses Other operating income 26 27 (30.561) (1.202 Earnings per share (Rupees) 34 246 230 The annexed notes 1 to 46 form an integral part of these financial statements.334.780.865) 3.273.033.785) 192.051) 124.055.969.943.059.Profit and Loss Account for the year ended December 31.577.625) 14.298 (1.515.030.313 (427.478) (373.179.146 5.935) (388.943. Malik Chairman & Chief Executive Imran Husain Director & Chief Financial Officer 38 .225) (24.694) (1.957 (7.583) 4.094.219.

649 2.437 153.605.790.236 496.006 2.780.181 (239.244 (372.188 263.506) 136. plant and equipment Dividend income Mark-up on short term borrowings Finance charge on finance leases Provision for staff retirement benefits Return on savings accounts Income on deposit accounts Effect on cash flows due to working capital changes (Increase) / Decrease in current assets Stores and spares Stock in trade Trade debts Loans and advances Trade deposits and short term prepayments Other receivables Increase / (Decrease) in current liabilities Trade and other payables Provisions 4.329.343.709.219.901 (12) 229.844 (277.Cash Flow Statement for the year ended December 31.166. 2010 2010 2009 (Rupees in thousand) Cash flows from operating activities Profit before taxation Adjustments for non-cash charges and other items Depreciation Amortisation of software (Gain) / Loss on disposal of property.682 7.948) (166.103.039 (993) 1.054) (12) 132.529 177.605 553.438) 5.870 8.317 1.667) 602.153 84.433 (24.365 1.474 523.275.091 (23.937) (16.357 (1.918) (1.155 5.918) (231.938 5.165 11.515.120 2.879) 956.442 Cash generated from operations (carried forward) 39 .594) (7.855 7.009 13.631 11.794) 2.942) 824.867 4.760 (91.298 4.010.

619) (47.095 7.942) (2.358) 35 The annexed notes 1 to 46 form an integral part of these financial statements.709. plant and equipment Payment for intangible asset under development Sale proceeds on disposal of property.230 364.259.continued for the year ended December 31.428 147.629) (418.131 5.899 6. Malik Chairman & Chief Executive Imran Husain Director & Chief Financial Officer 40 .708 Cash generated from operations (brought forward) Mark-up on short term borrowings paid Income tax paid Retirement benefits obligations paid Decrease in long term loans Decrease in long term deposits and prepayments Net cash from operating activities Cash flows from investing activities Purchase of property.860 12 (885.215.037.192) (1.010.542) 2.535) 62.967 (1.283 3.327.678.182.Cash Flow Statement .704) (37.125.734) (798.787) (199.010.686) (2.460.646) 2.923) (3.228) (872.361) 14. plant and equipment Return received on savings accounts and deposit accounts Dividend received Net cash used in investing activities Cash flows from financing activities Dividends paid Finance lease obligation paid Net cash used in financing activities Net increase in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year (721.472) 22.358) 1.376 (3.596) 32.281.311) (68.091 (145.442 (264.155 993 12 (877.325 (798. 2010 Note 2010 2009 (Rupees in thousand) 7.989.972. Ehsan A.339) (1.425) (82.

273.055. 2010 .183.036) 3.477 - 70.273.215.477 - 70.036) 2.036) 2.223.291. 137 per share For the year ended December 31.055. 2009 .740 1.Interim dividend on ordinary shares @ Rs.621.441 (1.153) 2.560. 2008 .821.183.On cumulative preference shares @ 5% per share .223.477 70.202 (1.243 3.273.260) 669.643 3.Final dividend on ordinary shares @ Rs.153.740 - - - 648 648 648 - - - (239) (239) (239) - - - (757.751) 669.055.929 321.498.751) (757.881 3.318 The annexed notes 1 to 46 form an integral part of these financial statements.758 3.183.740 2. Ehsan A.net of deferred taxation: .Final dividend on ordinary shares @ Rs.153) 3.Statement of Changes in Equity for the year ended December 31.841 (1. 2009 Net profit for the year Transferred from surplus on revaluation of fixed assets .incremental depreciation for the year Dividends For the year ended December 31. 2010 SHARE CAPITAL CAPITAL Arising under schemes of arrangements for amalgamations Contingency RESERVES TOTAL REVENUE Unappropriated profit SUB TOTAL ( Rupees in thousand ) Balance as at January 1.260) (1.net of deferred taxation: .153) 2.890.202 (1. 2010 669. 57 per share For the year ended December 31.incremental depreciation for the year Dividends For the year ended December 31.751) (757.471 - 1. 92 per share Balance as at December 31.260) (1. 2009 .223.546. Malik Chairman & Chief Executive Imran Husain Director & Chief Financial Officer 41 . 89 per share Balance as at December 31.281 3.821.202 - - - 648 648 648 - - - (239) (239) (239) - - - (1. 2009 Net profit for the year Transferred from surplus on revaluation of fixed assets .471 (1.229.On cumulative preference shares @ 5% per share .471 - (1.929 - 321.120 3.929 - 321.821.Interim dividend on ordinary shares @ Rs.

It also requires management to exercise its judgement in the process of applying the Company's accounting policies. 1984. The nature of these costs is such that judgement is involved in estimating the timing and amount of cash flows.2 Critical accounting estimates and judgements The preparation of financial statements in conformity with approved accounting standards requires the use of certain critical accounting estimates. where the final tax outcome is different from the amounts that were initially recorded. The areas involving a higher degree of judgement or complexity. Lahore and Islamabad Stock Exchanges. employee termination cost and restructuring where a legal or constructive obligation exists at the balance sheet date and reliable estimate can be made of the likely outcome. 2. ice cream and spreads. beverages.Notes to and Forming Part of the Financial Statements for the year ended December 31. Approved accounting standards comprise of such International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board as are notified under the Companies Ordinance. 1984. such differences impact the income tax provision in the period in which such determination is made. 2010 1.1 Statement of compliance These financial statements have been prepared in accordance with approved accounting standards as applicable in Pakistan.1. 2. UK. among others. The Company is a subsidiary of Unilever Overseas Holdings Limited. It manufactures and markets home and personal care products.1. or areas where assumptions and estimates are significant to the financial statements are as follows: (i) Taxation The Company accounts for provision for income tax based on current best estimates. 42 .1 Basis of preparation 2. However. The registered office of the Company is situated at Avari Plaza. provisions of and directives issued under the Companies Ordinance. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting policies adopted are the same as those applied for the previous financial year. (iii) Provisions Provisions are considered. UK. Fatima Jinnah Road. 2. Karachi. 1984 shall prevail. (ii) Post employment benefits Significant estimates relating to post employment benefits are disclosed in note 8. In case requirements differ. disputed indirect taxes. the provisions or directives of the Companies Ordinance. whereas its ultimate parent company is Unilever PLC. for legal matters. THE COMPANY AND ITS OPERATIONS The Company is a limited liability company incorporated in Pakistan and is listed on the Karachi.

There is no effect of the new amendment on the Company’s financial statements. (ii) 43 . interpretations and amendments to published approved accounting standards that are effective in the current year (i) IFRS 2 (Amendments). There have been no critical judgements made by the Company's management in applying the accounting policies that would have significant effect on the amounts recognised in the financial statements.Estimates and judgements are continually evaluated and are based on historical experience and other factors. c) Standards.1. is effective for the accounting periods beginning on or after January 01. The new amendment may extend the disclosures for any other comprehensive income in the Company’s financial statements. This amendment requires an entity to present an analysis of other comprehensive income for each component of equity. ‘IFRS 2 – Group and treasury share transactions’ and further expands on the guidance in IFRIC 11 to address the classification of group arrangements that were not covered by that interpretation. is effective for the accounting periods beginning on or after January 01. It amends the definition of a related party and modifies certain related party disclosure requirements for government-related entities.‘Disclosure of information about segment assets’. The segment assets are reported regularly to the Company’s Chief Operating Decision-maker.3 a) Changes in accounting standards. therefore the adoption of this amendment has no effect on the disclosures of Operating Segments presented in note 36 to the financial statements. either in the statement of changes in equity or in the notes to the financial statements. The revised standard is not expected to have a material impact on the Company’s financial statements. IFRS 8 (Amendment) . incorporates the guidance contained in IFRIC 8. and IFRIC 11. interpretations and pronouncements Standards. ‘Presentation of Financial Statements’. ‘Group cash-settled share-based payment transactions’. including expectations of future events that are believed to be reasonable under the circumstances. clarifies that an entity is required to disclose a measure of segment assets only if that measure is regularly reported to the Chief Operating Decision-maker. 2010 are considered not to be relevant or to have any significant effect on the Company’s financial reporting and operations. IAS 24 (Revised). (ii) b) Standards. 2011. amendments and interpretations that are mandatory for accounting periods beginning on or after January 1. 2. interpretations and amendments to published approved accounting standards that are not yet effective but relevant (i) IAS 1 (Amendment). interpretations and amendments to published approved accounting standards effective in 2010 but not relevant The other new standards. ‘Related Party Disclosures’. ‘Scope of IFRS 2’. 2011.

minimum funding requirements and their interaction'.(iii) IFRS 7 (Amendment). The new amendment is not expected to materially affect the financial instrument disclosures in the Company’s financial statements. if any. Maintenance and normal repairs are charged to income as and when incurred. 44 . Gains and losses on disposal of property. "Property. which are shown at such revalued figures. IFRIC 13 (Amendment). 2011. 10. 1975.‘Customer Loyalty Programmes’. except capital work in progress which is stated at cost. is effective for the accounting periods beginning on or after January 01. is effective for the accounting periods beginning on or after January 01. This amendment emphasises the interaction between quantitative and qualitative disclosures about the nature and extent of risks associated with financial instruments. if any. 16.3 Property. Overall valuation policy These financial statements have been prepared under the historical cost convention except as disclosed in the accounting policy notes.‘IAS 19 – The limit on a defined benefit assets. The Company accounts for impairment. over their estimated useful lives. 1978 and 1981 by independent valuers. where indication exists. Plant and Equipment". 1984. It clarifies the meaning of fair value in the context of measuring award credits under customer loyalty programmes. plant and equipment is stated at cost less depreciation and impairment. buildings and plant and machinery were revalued in 1973. however. Depreciation is calculated using the straight-line method on all assets in use at the beginning of each quarter to charge off their cost excluding residual value. the Company adopted cost model for its property. 2011. Major renewals and improvements are capitalised and assets so replaced. Certain land. In compliance with the revised International Accounting Standard No. also individual assets costing up to Rs.2 2. by reducing assets carrying value to the assessed recoverable amount. (iv) (v) 2. The new amendment is not expected to have a material impact on the Company’s financial statements. plant and equipment and the revalued figures were treated as deemed costs. The new amendment is not expected to have a material impact on the Company’s financial statements. if not insignificant. is effective for the accounting periods beginning on or after January 01. are retired. plant and equipment Property. plant and equipment are recognised in the profit and loss account. The surplus on revaluation of these assets.000 are charged to income. IFRIC 14 (Amendment). It removes the unidentified consequences of the existing standard that restricted the recognition of some voluntary prepayments for minimum funding contributions as an asset. 2011. is recognised in accordance with section 235 of the Companies Ordinance.‘Financial Instruments: Disclosures’.

Costs associated with maintaining computer software programmes are recognised as an expense as and when incurred.6 Taxation (i) Current The charge for current taxation is based on taxable income at the applicable rates of taxation determined in accordance with the prevailing law for taxation after taking into account tax credits and rebates available. (ii) Deferred Deferred tax is provided using the liability method on all temporary differences arising between the tax base of assets and liabilities and their carrying amounts in the financial statements.2. Deferred tax liability is generally recognised for all taxable temporary differences and deferred tax asset is recognised to the extent that it is probable that taxable profits will be available against which the deductible temporary differences. to the fund at the rate of 6% per annum of the gross salary. both by the Company and the employees.5 Investments (i) In subsidiaries These are stated at cost. 2. Major computer software licences are capitalised on the basis of costs incurred to acquire and bring to use the specific software. if any. Equal monthly contributions are made. Obligation for contributions to defined contribution plan is recognised as an expense in the profit and loss account as and when incurred.4 Intangibles Intangibles are stated at cost less amortisation. (ii) In unlisted entity not being subsidiary These are valued at cost and are classified under investment available-for-sale. These costs are amortised over their estimated useful life of five years using the straight-line method. 2.7 Retirement benefits Defined contribution plans (i) Provident fund The Company operates an approved contributory provident fund for all employees. 45 . 2. unused tax losses and tax credits can be utilised.

46 . and as reduced by the fair value of plan assets. 2008 and opted for DC Pension plan in lieu of future benefits under the existing pension. Amounts recognised in the balance sheet represent the present value of defined benefit obligation as adjusted for unrecognised actuarial gains and losses and unrecognised past service costs. using the ‘Projected Unit Credit Method’.8 Stores and spares These are valued at average cost and provision is made for slow moving and obsolete stores and spares.(ii) DC Pension fund The Company has established a defined contribution plan . 2008 and not opted for DC Pension scheme. The latest actuarial valuation was carried out as at December 31. Defined benefit plans The Company operates the following schemes: i) Funded pension scheme for management employees of the Company. 2010. which is a book reserve plan. 2010. 2.DC Pension Fund for the following management employees: a) b) permanent employees who joined on or after January 1. Any assets resulting from the calculation is limited to the unrecognised actuarial losses and unrecognised past service cost plus the present value of available refunds and reduction in future contribution to the plan. Actuarial gains and losses are changes in present value of defined benefit obligation and fair value of plan assets due to differences between long term actuarial assumptions and actual short term experience. 2009. management gratuity and pensioners' medical plans. Funded gratuity scheme for management and non-management employees of the Company. The Company amortises such gains and losses each year by dividing the unrecognised balance at the beginning of the year by the average expected remaining service of current members. Contributions are made on the basis of the actuarial valuation. Obligation for contributions to defined contribution plan is recognised as an expense in the profit and loss account as and when incurred. Pensioners’ medical plan. if any. and permanent employees who joined on or before December 31. The plan reimburses actual medical expenses as defined in the plan. The latest actuarial valuation was carried out as at December 31. Contributions are made on the basis of the actuarial valuation. ii) iii) The above defined benefit plans are available only to those management employees who joined on or before December 31. Contributions are made by the Company to the plan at the rate of 9% per annum of the gross salary. Items in transit are valued at cost comprising invoice value plus other charges incurred thereon. using the ‘Projected Unit Credit Method’.

Each lease payment is allocated between the liability and finance cost so as to achieve a constant rate on the finance balance outstanding. 2. construction or production of a qualifying asset.10 Trade and other debts Trade and other debts are recognised at fair value of consideration receivable. 2. if any.13 Trade and other payables Liabilities for trade and other amounts payable are carried at cost which is the fair value of the consideration to be paid in future for goods and services. Assets on finance lease are capitalised at the commencement of the lease term at the lower of the fair value of leased assets and the present value of minimum lease payments. which is valued at the contracted price. Borrowing costs are recognised as an expense in the period in which these are incurred except to the extent of borrowing costs that are directly attributable to the acquisition. cash and cash equivalents comprise cash in hand. (ii) Operating leases Leases in which a significant portion of the risks and rewards of ownership is retained by the lessor are classified as operating leases. For the purposes of the cash flow statement. Payments made under operating leases are charged to profit and loss on a straight-line basis over the period of the lease. Debts considered irrecoverable are written off and provision is made against those considered doubtful of recovery. 47 . Such borrowing costs. determined at the inception of the lease. Cost is determined using the weighted average method except for those in transit where it represents invoice value and other charges paid thereon.14 Borrowings and their cost Borrowings are recorded at the proceeds received.9 Stock in trade This is stated at the lower of cost and estimated net realisable value.2. with banks on current and savings accounts.11 Cash and cash equivalents Cash and cash equivalents are carried in the balance sheet at cost. Net realisable value is the estimated selling price in the ordinary course of business less cost necessarily to be incurred in order to make the sale. Cost of work in process includes direct cost of materials whereas that of finished goods also includes direct cost of labour and production overheads. are capitalised as part of the cost of that asset. deposit accounts with maturities of three months or less and short term finance. 2. The finance cost is charged to profit and loss account and is included under finance costs. 2. By-product (glycerine) is valued at estimated cost except for the stock covered by a firm forward sale contract. 2.12 Leases (i) Finance leases Leases that transfer substantially all the risks and rewards incidental to ownership of an asset are classified as finance leases.

Restructuring cost provisions comprise staff redundancy payments.17 Foreign currency transactions and translation Foreign currency transactions are converted into Pak Rupees using the exchange rates prevailing at the dates of the transactions. which is the Company’s functional and presentation currency. relocation and dismantling of factory.20 Dividend and appropriation to reserves Dividend and appropriation to reserves are recognised in the financial statements in the period in which these are approved.15 Provisions Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events. 2. and a reliable estimate of the amount can be made.16 Financial assets and liabilities All financial assets and liabilities are initially measured at cost. 2.18 Revenue recognition Revenue is recognised to the extent it is probable that the economic benefits will flow to the Company and the revenue can be measured reliably. Revenue is measured at the fair value of the consideration received or receivable. and return on savings accounts and deposit accounts is recognised using the effective interest rate method. it is probable that an outflow of resources will be required to settle the obligation. 2. 48 . The financial statements are presented in Pak Rupees. which is the fair value of the consideration given and received respectively. amortised cost or cost. Exchange gains and losses are recognised in the profit and loss account. 2. These financial assets and liabilities are subsequently measured at fair value.19 Segment information Operating segments are reported in a manner consistent with the internal reporting.2. as the case may be. dividend income is recognised when the Company’s right to receive the payment is established. 2. 2. All monetary assets and liabilities in foreign currencies are translated into Pak Rupees at the rates of exchange prevailing at the balance sheet date. and is recognised on the following basis: sale is recognised when the product is despatched to customers. and are recognised in the period in which the Company becomes legally or constructively committed to incur. corresponding provision created is reflected in the liability.21 Share based payment The cost of awarding shares of Group companies to employees is reflected by recording a charge in the profit and loss account equivalent to the fair value of shares over the vesting period.

988.192) (2.563.431 25.848 (1.606) (60.575 Additions (at cost) Disposals (at NBV) Depreciation charge Closing net book value (NBV) Gross carrying value basis At December 31.880 4.799) 82.093 875.142.075) 19.948 287.05 1.563.430) (404.352 162.867) 4.140) (44.818) (112.848 3.190 308.782 2.886 90. 2010 Opening net book value (NBV) 25.923 5.556) (23.432) 3.996.588.607 3.216 1.006) 4.272) 593.588.733) (437.953 (1.575 529 753. Furniture machinery mechanical and and office fittings Freehold Leasehold On On equipment freehold leasehold land land Land Buildings (Rupees in thousands) Net carrying value basis Year ended December 31.365) 82.607 (1.563.848 3.056) (496.565.229) (553.226 5.701 (8.377 (8.330.297 (2.048 Depreciation rate % per annum - 1.341 92.312) 321. 2010 Cost Accumulated depreciation Net book value (NBV) Net carrying value basis Year ended December 31.619 3.101.087) (3.575 529 775.575 421 (181) (6) 234 514.531.607 4.640 20.at cost .640 17.997 20.997 19.612 (35) (2.575 Additions (at cost) Disposals (at NBV) Depreciation charge Closing net book value (NBV) Gross carrying value basis At December 31.469 4.226 34.note 3.387 2.044 117.359) 287.532) (20.804) (24.612 117.308 36.948 321.575 25.048 25.918.683 (39.878) (61.412 80.420.500 485.359 (898) 20.500 287.5 1.857.540.1 Capital work in progress .681 758.469 4.269) 2.144 (497) (31.897.190 (295) (163.567 46.736.773) 589.048 5.171 4.806 19.2010 2009 (Rupees in thousand) 3.612 234 589.575 234 (5) 229 589.5 to 2.241) 2.875 80.640 72.565.5 to 2 8 to 20 8 to 20 8 to 14 25 25 49 .500 157.531.556 7.806 20.045) (384.note 3.309) 20.563.806 22.773 3.571 4.011 22. 2009 Cost Accumulated depreciation Net book value (NBV) 25.773 3.417) 4.413 25.797 (310) (2.981 4.934 (7.226 (86. PROPERTY.656) 3.923 5.076) (105.108 (60.054) (444.463 (18.075) (2.880 (90.219) (37.755 (71.799 7.172 41.643) 22. 2009 Opening net book value (NBV) 25.1 Operating assets Plant and Electrical.067) 4.998) 36.029 168.461) 229 593.672 3.048 173. PLANT AND EQUIPMENT Operating assets .430.009.2 4.150) (2.048 586.384 141.693 (15.588.308 82.575 25.930 692.531.011 20.190 Motor vehicles Owned Held under finance leases TOTAL (300) (181.

906 308.2 4.2 This represents license and consultation fee for the implementation of SAP Enterprise Resource Planning (ERP) System Solution.075 300.303 (4.981 12.147 161.086 821. 50 . 2010 2009 (Rupees in thousand) 4.note 4.870) 2.424 173.note 4.348 (21. plant and equipment disposed off during the year are given in note 42.5 2.348 (24.433) 7.348) 24.123 357.433 821.2 Capital Work in Progress – at cost Civil works Plant and machinery 2010 2009 (Rupees in thousand) 8.433 (2.556 4.3. INTANGIBLES Computer Software .915) 2.1 Intangible asset under development .086 2.433 355.433 0.571 3.3 Details of property.1 Computer Software Net carrying value basis Opening net book value Amortisation charge Closing net book value Gross carrying value basis Cost Accumulated amortisation Net book value Remaining useful life in years 24.

344 5.000 fully paid ordinary shares of Rs.000 6% redeemable cumulative preference shares of Rs.887 1.546 137.202 200 95.note 12 Long term portion 51 .at cost Lever Chemicals (Private) Limited 9.500.998) 98. LONG TERM INVESTMENTS Investments in related parties In unquoted wholly owned subsidiary companies .5.198 (48.861 96.3 Recoverable within one year . 100 each 2010 2009 (Rupees in thousand) 95.774 114.399 9.considered good Related Parties Director Chief Executive Others Executives Other employees 430 5.117 note 6.1.311) 83.667 11.708 40.115 (48.2 and 6.424 132.202 6.000 95. 10 each Sadiq (Private) Limited 100 fully paid ordinary shares of Rs.254 147. 10 each Investment available for sale .462 8.000 1 1 1 1 200 95.757 126. 6. 10 each Levers Associated Pakistan Trust (Private) Limited 100 fully paid ordinary shares of Rs.at cost Futehally Chemicals (Private) Limited 2. LONG TERM LOANS .

857 17.3 The maximum aggregate amount of loans due at the end of any month during the year was: 2010 2009 (Rupees in thousand) Director Chief Executive Executives 7.1 Reconciliation of carrying amount of loans to Director.997 4.058 30. These loans are secured against retirement benefits of the employees.462 8.925) 392.684) 114.055) 8.454 2009 122.144 151.585) 96.708 (6.344 (3.130 395.6.691 (55.827 6.376 8.922 (2.399 44. 6. LONG TERM DEPOSITS AND PREPAYMENTS 1.627 368.199 100.128 Chief Executive 2010 8. Chief Executive and Executives: Director 2010 2009 Balance as at January 1 Loans granted during the year Transfers Recoveries 1.602 (Rupees in thousand) (1.064 23.786 (44.032) 430 - - (3.399 Executives 2010 96.725 Security deposits Prepaid rent Others Less: Provision for doubtful deposits 4.896 52 .462 6.037 20.821 (2.2 The above loans under the terms of employment have been given interest free to facilitate purchase of houses.211 2.667 29.925) 27.666) 1. vehicles and computers repayable in monthly installments over a period of three to five years.708 2009 11.523 11.055) 5.

305 8.8 and 8.771 231.331 (46. 2011 are Rs.333) (203.499 186.484.798) 36.261 163.174 834 24.420 27. 148 million).092) 1.505) (210.449) 150.193 11.567 18.755 45.6 Principal actuarial assumptions used are as follows: Discount rate & expected return on plan assets Future salary increases Future pension increases Medical cost trend rates 2010 14.628.154) 28.3 Movement in the fair value of plan assets Fair value as at January 1 Expected return on plan assets Actuarial gains / (losses) Employer contributions Settlement and curtailment Benefits paid Fair value as at December 31 1.640 (144.25% 12.505 13.716 205.60% 6.380 36.935) 266.674 1.590 512 (14.463 97.661 17.484.687 (189.803) 1.935) 62.027) (203.222 (186.173) 192. 8.803 11.800 1.383 188.630.070) 21.890 28.936 (155.75% 10.301 171.027 416.763 20.676 (10.13 are based on the information included in the actuarial valuation as of December 31.323) 38.771 (1.890 (4.798) 246.182 (246.630.380 178.586) (29.990 (171.211 12.709) (79. Pension Fund 2010 2009 Gratuity Funds 2010 2009 (Rupees in thousand) Pensioners’ Medical Plan 2010 2009 8.550 (144.663 8.329) 267.563.039 55.502 3.590 3.586 (15.2 to 8.028 (169.663) 36.38% Expected contributions to retirement benefit plans for the year ending December 31.352 10.261) 34.749 8.771 (266.302 (107.66% 7.709 (7.233) (192.544 31.11 to 8.384 13.569) 36.577 310.222 (7.578 73.514 504.054 62.803) 1.182 8.5 9.709 3.923 (534.716 205.380 (1.387 6.182 4.666 191.727) 8.727 834 24. 53 .00% 8.809 (144.387 (178.663 717 23.222 (7.463) 26.2 Balance Sheet Reconciliation Fair value of plan assets Present value of defined benefit obligations Funded status Unrecognised net actuarial loss Recognised asset / (liability) 1. 2010.700) (144.663) (192.563.473 52.00% 8.8.092) 1.221) 203.484.202) (113.712) 18.626 717 23.505 192.261) (203.253) (534.686) (46.063 275. 131 million (2010: Rs.571.992 18.412) 168.577 (8.771 1.709 12.220) (1.4 Movement in the defined benefit obligations Obligation as at January 1 Service cost Interest cost Settlement and curtailment Actuarial losses / (gains) Benefits paid Obligation as at December 31 Cost Current service cost Interest cost Expected return on plan assets Settlement and curtailment Recognition of actuarial loss Expense Actual return on plan assets 12.468.070) 2.249 148.352) 417.222 (143.220 1.544 31.154 14.1 RETIREMENT BENEFITS The disclosures made in notes 8.563.498 38.666 191.709 246.274 428.256) 13.628.498 38.346 9.75% 2009 12.

522) (50.8 8. 358.7 1.liability amounts to Rs.06 million).03)% 9.804 1.10 The expected return on plan assets was determined by considering the expected returns available on the assets underlying the current investment policy.0 9.562 % 197. 8.562 1.691.691.2)% 7.499 (2.542 100.693) 1.9 Plan assets comprise of the following: 2010 Rupees in thousand Equity Debt Others (include cash and bank balances) % 2009 Rupees in thousand 147.315) (245.002.3)% 0.485.192) (142.048.8 The effects of a 1% movement in the assumed medical cost trend rate are as follows: Increase Decrease (Rupees in thousand) Effect on the aggregate of current service and interest costs Effect on the defined benefit obligations 2.2)% (1.797 87.3 100.7)% 0.11 The actuary conducts separate valuations for calculating contribution rates and the Company contributes to the pension and gratuity funds according to the actuary’s advice.933.8.asset amounts to Rs.5 1.323) (482.519) 6. 188.811 21.5% 8. 8.034.403 18.552 897.3% (0.099. Expense of the defined benefit plans is calculated by the actuary.7 59.542 (2.6% (0. 148.137 2.05 million) and retirement benefits .700 1.100 0.966) 1.0 31.8 million (2009: Rs.508) (407.891.8 million (2009: Rs.7% (1. 327. Expected yields on fixed interest investments are based on gross redemption yields as at the balance sheet date.7 Comparison for five years: 2010 2009 2008 2007 (Rupees in thousand) 2006 As at December 31 Fair value of plan assets Present value of defined benefit obligations (Deficit) Experience adjustments Gain / (Loss) on plan assets (as percentage of plan assets) (Gain) / Loss on obligations (as percentage of plan obligations) 1.520.877) (2. 54 .984.520.240 8.802.0 8.310 475.2% (0.941) (2.12 Based on the above actuarial valuation the retirement benefits .581 (1.645 11.

2010 2009 (Rupees in thousand) STOCK IN TRADE Raw and packing materials at cost (including in transit Rs.3 The Company made a provision of Rs. 2009: Rs.130 1. 53.88 million. 2010 2009 (Rupees in thousand) 9.881. 2009: Rs. 79.077 (38.927 72. 181 million) By-product .174 (91.79 million (2009: Rs.glycerine Provision for obsolescence 1. 55 .51 million (2009: Rs. 1.2 The above balances include items costing Rs.293. STORES AND SPARES Stores (including in transit Rs.28 million (2009: Rs.31 million) for obsolescence.846 1.70 million (2009: Rs.416.047) 1.976 (46.13 During the year the Company contributed Rs.26 million) to the DC pension fund.420 9. 148. 10. 68 million.736 Finished goods (including in transit Rs.264.07 million).649.338 80.007 1.595 304.954 11.657) 265. 92. 8.49 million. The Company has made a provision during the year of Rs. 20.457 2.626. 10.68 million (2009: Rs.45 million) by utilising the provision during the year.825 219. 1. 10.147) 1.321. 48.934 (95.407 3.254.500 1.090 4.305.77 million) to the provident fund and Rs.1 10.007) 2. 238.13 million) valued at net realisable value of Rs.839) 357. 185.19 million) and has written off inventory amounting to Rs. 10.15 million) Others Provision for slow moving and obsolete stores and spares 169.070 10.66 billion (2009: Rs.18 million (2009: Rs.657 3.06 million for obsolescence (2009: Rs.893 226. 19. 662 million. 87.453) 2.534. 2009: Rs. 109.265.829 3.219.454 (51.1 Stock in trade includes Rs. 52.8. 45. 4. 10.721 126.79 billion) held with third parties. 868 million) Provision for obsolescence Work in process 2.10 million) Spares (including in transit Rs.177 (42. 2009: Rs.194 400.

230) 126. 0.1 11.962 5. The age analysis of these trade debts is as follows: 2010 2009 (Rupees in thousand) Up to 3 months 3 to 6 months More than 6 months 12.708 35.795 506. These relate to a number of independent customers for whom there is no recent history of default.811 (42.149 126.11. 56 .244 138.419 131.096 (6.929 12. 42.357 43. 2.998 54. 2.699 12.1 Suppliers and others Considered doubtful Advances to suppliers and others 138.795 42.2 As of December 31.71 million (2009: Rs.699 6.note 12.852 Provision for doubtful advances to suppliers and others (6.345 42.759 (43. LOANS AND ADVANCES Considered good Current portion of loans to employees .239 24.311 48.402) 506.435 70.244) 131.note 6 Advances to: Executives . 155. 2010 trade debts of Rs.016 564.402 549.016) 522.866 48.533 9. 3.05 million) during the year.216 7.04 million) and has written off debts by utilising the provision amounting to Rs.357 Provision for doubtful debts .1 The Company has reversed provision of Rs.note 11.852 6. TRADE DEBTS Considered good Considered doubtful 2010 2009 (Rupees in thousand) 522. 11.1 The advances to executives are given to meet business expenses and are settled as and when the expenses are incurred.46 million (2009: Rs.559 1.87 million) were past due but not impaired.959 155.230 132.24 million (2009: Rs.

155 160. 3. Unilever PLC and Unilever NV will grant matching shares.46 3 Service conditions Shares 20% Unilever NV March 20.136 ¤ 21. of their gross variable pay in shares of Unilever PLC or Unilever NV.30 ¤ 13. 2009 1.195 £16.1 This includes prepayment of Rs. 2012 57 .826 13. 2009 1.617 18. Variable Pay In Shares (VPIS): Under this plan.532 2. 2011 by March 19. 2012 by March 20. VPIS Shares of Date of grant Total number of shares granted 2008 2009 2008 2009 2008 2009 Unilever PLC March 20. 2008 March 19.note 13.175 204. or none at all.1 20. If the employee opts for the shares. employees eligible as per policy can choose to take between 10% and 25%. 2011 by March 19. TRADE DEPOSITS AND SHORT TERM PREPAYMENTS Trade and margin deposits Prepayments Rent Others . 2008 March 19.2010 2009 (Rupees in thousand) 13.95 3 Service conditions Shares 20% Fair value / Share price on grant date Contractual life (years) Vesting conditions Settlement Expected lapse per year Expected outcome of meeting the performance criteria (at the grant date) 2008 2009 by March 20.192 151.869 243. on the condition that the employee stays with the Company and holds these shares for at least three years.661 16.72 £12.70 million in respect of shares matched by the Company under the following share-based compensation plan.539 2.479 327.

1 Mark-up on savings accounts was earned at the rates ranging from 5% to 9% (2009: 5% to 9%) per annum.509 800.394 84. the Company would reimburse the tax.934) 70.payments less provision Others 137. Without prejudice to the earlier appeals filed.815 96. 16. The contracts with such manufacturers provided that in the event of any liability arising against them on this account. constituted under the Sales Tax law.1 This includes a sum of Rs. These appeals were filed by third party manufacturers in respect of disallowance of input tax claimed by them on the ground that tax invoices and bills of entry were in the Company’s name.2 The deposit account carries mark-up at the rate of 11.052 15. the Company has referred one of the above cases to the Alternate Dispute Resolution Committee.note 22.985 13. owing to the fact that the demands arose as a result of procedural matters and that there was no loss of revenue to the Government.note 15.075 (13.355 27 466.365 444 744 239.013 27 355.14.000 1.1 Taxation .553 16. 58 .394 137.012 218.315 8. OTHER RECEIVABLES Receivable from related parties Unilever Gratuity Fund Associated undertakings Workers' Profits Participation Fund .110 238. 131 million (2009: Rs.1 Others Provision for doubtful receivables 2010 2009 (Rupees in thousand) 9.141 15.758.934) 82. 2010 2009 (Rupees in thousand) 16.2 In hand: cash 658. to avoid additional Sales Tax and Surcharge being levied in the event of unfavourable decisions of the appeals pending in the High Courts.note16.012 329. 131 million) paid by way of abundant caution under the Amnesty Scheme.960 32.75 % per annum and will mature in the year 2011.1 deposit account .note16.894 (13.090 298. The Company’s management and legal advisors expect a favourable outcome of the appeals.960 40.723 30. CASH AND BANK BALANCES With banks on: current accounts savings accounts . TAX REFUNDS DUE FROM THE GOVERNMENT Sales tax refundable . the decision of which is still awaited.777 44.511 1.amounts paid under protest .

477 248.783 4.979. 50 each 2010 2009 (Rupees in thousand) 4.981.385 23.385 for consideration paid in cash for acquisition of an undertaking 4. 59 .835 4. subscribed and paid up capital 5% cumulative preference shares of Rs.961 392.217 800.383 400 4.417 ordinary shares and 33.835 Ordinary shares of Rs.904.981.000 4. 2009: 9.694 669.961 392.735 preference shares).348 664.869 At December 31.846.835 5% cumulative preference shares of Rs.783 248. a wholly owned subsidiary of Unilever PLC. UK holds 9.330 Issued.694 669.217 800.208 for consideration paid in cash for consideration other than cash under schemes of arrangements for amalgamations as bonus shares 23.293. 100 each Ordinary shares of Rs.477 7.000 15.383 400 4. 100 each Shares allotted: 43.000 47.17. SHARE CAPITAL Authorised share capital 47.348 664. 2010 Unilever Overseas Holdings Limited.704 4. UK.417 ordinary shares and 33.957 13. 50 each Shares allotted: 467.735 preference shares of Unilever Pakistan Limited (December 31.783 795.783 795.

net of deferred taxation: incremental depreciation for the year 12. 18.621.36 million and Rs.243 2. RESERVES Capital reserves Arising under schemes of arrangements for amalgamations .note 25.57 million that arose under schemes of arrangement for amalgamations of former Mehran International (Private) Limited. SURPLUS ON REVALUATION OF FIXED ASSETS This represents surplus over book values resulting from the revaluations of property. 2010 2009 (Rupees in thousand) Balance as at January 1 Transferred to unappropriated profit .317 12.1 Contingency .929 321.965 13.841 2. 19.441 2.471 392.400 Revenue reserve Unappropriated profit 2.498.1 This represents amounts of Rs. former Ambrosia International Limited and former Pakistan Industrial Promoters (Private) Limited with the Company. 1975.18.note 18.965 60 . adjusted only by surplus realised on disposal of revalued assets.890.1.613 (648) (648) Balance as at December 31 12. plant and equipment carried out in 1973. 52.229.1 2010 2009 (Rupees in thousand) 70.643 18.471 392.929 321. 1978 and 1981. incremental depreciation arising out of revaluation and deferred taxation.400 70.

143 874.2010 2009 (Rupees in thousand) 20.076) 636.962) (36.409) (35.130 61 .549 20.provision for doubtful debts.841 (71.708 93. 905. The liability is payable by January 2013 in semi-annual and quarterly installments.695 28.392) (335.138) (79. 2010 2009 (Rupees in thousand) DEFERRED TAXATION Credit balance arising in respect of: .143) (15.807 (8.206 (47.419) 56.099 48.069) (16.762 85.provision for retirement benefits .share-based compensation .provision for stock in trade and stores and spares .818 48.others 21.695 (28. KIBOR is determined on semi-annual basis for next two quarterly and semi-annual rentals.761 881.010) (3.85% to KIBOR + 1.surplus on revaluation of fixed assets Debit balance arising in respect of: .292) (62.818 Minimum lease payments Not later than one year Later than one year and not later than five years 38.574) (134.585) 48.419 56.877) 19.9% per annum. advances and other receivables .695 85.017) (61.698) 576.181 Finance charges not yet due Present value of finance lease liabilities Present value of finance lease liabilities Not later than one year Later than one year and not later than five years 28.445 6.provision for restructuring . LIABILITIES AGAINST ASSETS SUBJECT TO FINANCE LEASES Present value of minimum lease payments Current maturity shown under current liabilities 48.accelerated tax depreciation allowances .163) (18.762 45.375 6.877 19.466 911.280 (10.605) (245. Lease payments bearing variable mark-up rates include finance charge at KIBOR + 0.626) 85.181 The above represents finance leases entered into with modarabas for motor vehicles.181 (28.731 59.

129 129.551 22.508 120.943 (195.852 918.111) 1.785.705 866.233.571) 242.525 1.784 3.960) 256.22.599.238 2 20.444 92.525 128.166 27.400 114.960) Amount paid to the trustees Balance as at December 31 22.137 114.254.675.508 2 33.657 (55.note 22.767 363. 2010 share-based compensation plans of the Company include: 62 .130 15.4 Share-based compensation plans As at December 31.386 1.852 144.657 17.410 357.826 53. 22.2 Unclaimed dividend Liability for share-based compensation plans .note 22.776 22.072 99.768 (246.999 4.3 Amounts due to related parties included in trade and other payables are as follows: 2010 2009 (Rupees in thousand) Ultimate parent company Associated companies Subsidiaries Company in which close family member of a Director is holding directorship 357.4 Others 2010 2009 (Rupees in thousand) 1.372.903) (8.514 186.122 216.note 22.814 264.855 291.968 5.2 This represents security deposits obtained by former Pakistan Industrial Promoters (Private) Limited against freezer cabinets placed with dealers. TRADE AND OTHER PAYABLES Creditors Bills payable Accrued liabilities Royalty and technical services fee Advance payment from customers Sales tax payable Excise duty payable Workers' Welfare Fund Workers’ Profits Participation Fund .837 1.307.1 Workers' Profits Participation Fund Balance as at January 1 Allocation for the year (8.423 8.793 48.155 17.1 Security deposits from dealers .728 247.177 291.

962 4.45 LPSP Unilever NV May 22.1 Details of plan that vested during the year are: GPSP Shares of Date of grant Vesting date Fair value / Share price on grant date Fair value / Share price on vesting date Difference of grant date and settlement date fair value Contractual life (years) Vesting conditions Unilever PLC March 21. 2008 March 19.46 £ 19.46 £ 19. 2013 by March 20.53 3 Performance and market conditions Shares 20% 2008 2009 2010 Unilever PLC March 21. 2007 May 22.04 3 Performance and market conditions Shares Settlement The Company has treated these share-based plans as liability. 2009 March 18.88 £19. 2009 March 18.45 Unilever NV March 21. 2010 £14. 2010 £15.965 6.72 £ 12.375 7. 63 . 2012 by March 18.95 3 Performance conditions Shares £ 3.24 £ 4. 2013 No dividend payments were expected.33 ¤ 22.Global Performance Share Plan (GPSP) and Leadership Performance Share Plan (LPSP): Under the plans.4. 22.225 1.72 £ 12.44 3 Performance and market conditions Shares 20% Unilever NV March 20. The details of the arrangements are as follows: GPSP Shares of Date of grant LPSP Unilever PLC March 20.57 3 Performance conditions Shares ¤ 0. 2010 ¤ 21. consequently.44 3 Performance conditions Shares 20% Contractual life (years) Vesting conditions Settlement Expected lapse per year Expected outcome of meeting the performance criteria (at the grant date) 2008 2009 2010 by March 20.649 Total number of shares granted 2008 2009 2010 Fair value / Share price on grant date 2008 2009 2010 £ 16.375 7.22 ¤ 22. Ungeared Free Cash Flow (UFCF) and Total Shareholder Return (TSR) ranking over the three-year performance period. 2008 March 19. 2007 March 21.63 3 Performance and market conditions Shares ¤ 0. 2008 March 19. 2012 by March 18. 2011 by March 19.562 £ 16.20 ¤ 22.225 1. 2009 March 18. 2013 by March 20.82 £19. employees eligible as per policy can be awarded conditional shares of Unilever PLC or Unilever NV which will vest three years later depending on Unilever’s achievement of set targets for Underlying Sales Growth (USG). 2007 May 22.494 9. 2010 ¤ 22. 2007 March 21.28 Unilever PLC May 22. the measurement of the fair value did not consider dividends. 2010 1.190 22. 2010 1.562 ¤ 21. 2010 6.27 ¤ 13.962 4. 2011 by March 19. 2011 by March 19. 2012 by March 18.

23.1.67 billion).1 2010 2009 (Rupees in thousand) 297. The arrangements are secured by way of pari-passu charge against hypothecation of Company's stock in trade.2% to KIBOR + 1.956 397.265 220.143 300.234) 9.309) 45. 2010 2009 (Rupees in thousand) 338.02 billion (2009: Rs.29 billion). 10.78 billion (2009: Rs.note 25. 4.934 211.1 Provision for marking fee less payment Restructuring Balance as at January 1 Provision during the year Reversal during the year Utilised during the year Balance as at December 31 9.911 1.218 (25. SHORT TERM BORROWINGS Short term borrowing Short term running finance .000 (53. The rates of mark-up range between KIBOR to KIBOR + 1% per annum (2009: KIBOR + 0.415 - 24.143 297.63 billion).910 12. 6. 4.8 billion (2009: Rs.037. 10. of which the amount remaining unutilised at the year end was Rs.note 23.800 485.680 64 .719) (450. 9. PROVISIONS Provision for cess less payments . The facilities for opening letters of credit and guarantees as at December 31.265 90.secured The facilities for running finance available from various banks amount to Rs.5% per annum). 2010 amounted to Rs.000 737.911 23.1 Short term running finance .

25. 25.1

CONTINGENCIES AND COMMITMENTS Contingencies

25.1.1 Government of Sindh through Finance Act, 1994 levied fee for services rendered in respect of development and maintenance of infrastructure on the import and export of goods. However, the Company filed a constitutional petition against the levy of such fee in the High Court of Sindh and the Court granted stay for the payment of the fee. During the year 2001, the Government of Sindh introduced Cess in place of infrastructure fee with retrospective effect. As a result, Unilever's petition became anfractuous and a fresh suit was filed by Unilever to challenge the levy. A stay against recovery of the aforesaid levy of Cess was also obtained from the Court. In 2003 the High Court decided the issue against the Company. Against this order an intra court appeal was filed with the High Court. The appeal was disposed of in August 2008, whereby the levy imposed and collected with effect from December 28, 2006 was declared valid and all imposition and collection before such date as invalid. The Court further ordered that all bank guarantees / securities furnished for transactions before December 28, 2006 stand discharged and are liable to be returned back and those furnished in respect of transactions after December 28, 2006 are liable to be encashed. The Company as well as the Government of Sindh have filed appeals in the Supreme Court against the said order. A provision amounting to Rs. 373.4 million concerning the levy with respect from December 28, 2006 has been recognised in the financial statements. Moreover, the Company has paid an amount of Rs. 34.49 million under protest against the said order. As a matter of prudence, a total of Rs. 321.47 million as at December 31, 2010 (2009: Rs. 321.47 million) out of the revenue reserves has been earmarked as contingency reserve for the levy uptill December 2006. 25.1.2 The Officer of Inland Revenue (OIR) while finalising the re-assessment for the assessment years 2006, 2007 and 2009 passed amended assessment orders enhancing income tax liability by Rs. 421 million in respect of certain disallowances. The Company has filed appeals before the Commissioner of Inland Revenue (Appeals) and the same has been heard. The appellate order is awaited. Subsequent to the year end the OIR amended the assessment for tax year 2008 enhancing tax liability by Rs. 69 million. The Company intends to file appeal against this order. The management of the Company is of the view that the disallowances have been made erroneously and, therefore, the ultimate decision in appeal will be in Company’s favour. No provision has, therefore, been made in the financial statements.

65

25.2

Commitments

25.2.1 Aggregate commitments outstanding for capital expenditures as at December 31, 2010 amounted to Rs. 392.95 million (2009: Rs. 36.66 million). 25.2.2 Aggregate commitments for operating lease rentals as at December 31, are as follows: 2010 2009 (Rupees in thousand) Not later than one year Over one year to five years 79,976 230,504 310,480
26. SALES Manufactured goods Gross sales Sales tax Excise duty Imported goods Gross sales Sales tax Excise duty

42,360 147,485 189,845

56,528,071 (8,816,369) (1,472,618) 46,239,084 1,078,341 (49,933) (2,170) 1,026,238 (2,593,815) 44,671,507

47,807,308 (7,219,672) (1,238,271) 39,349,365 1,298,391 (23,596) (417) 1,274,378 (2,436,161) 38,187,582

Rebates and allowances

66

27.

COST OF SALES Raw and packing materials consumed Manufacturing charges paid to third parties Stores and spares consumed Staff costs - note 27.1 Utilities Depreciation Repairs and maintenance Rent, rates and taxes Travelling and entertainment Stationery and office expenses Expenses on information technology Other expenses Charges by related party Recovery of charges from related party

2010 2009 (Rupees in thousand) 25,633,234 769,558 179,619 1,236,555 685,492 480,316 258,240 26,939 58,733 54,105 674 73,913 2,820 (5,027) 29,455,171 72,736 29,527,907 (126,457) 29,401,450 1,210,086 20,593,398 686,529 141,308 1,077,303 471,273 412,764 208,631 56,242 49,835 35,776 3,985 47,318 3,096 (2,095) 23,785,363 102,466 23,887,829 (72,736) 23,815,093 1,414,059

Opening work in process Closing work in process Cost of goods manufactured Opening stock of finished goods including by-product glycerine Closing stock of finished goods including by-product glycerine Imported goods Opening stock Purchases Closing stock 27.1 Staff costs Salaries and wages Medical Pension costs - defined benefit plan Gratuity costs - defined benefit plan Pensioners' medical plan Provident fund cost - defined contribution plan Pension fund cost - defined contribution plan

(1,153,124) 29,458,412 44,321 658,197 702,518 (66,705) 635,813 30,094,225 1,174,238 19,268 10,264 14,159 5,473 4,913 8,240 1,236,555

(1,210,086) 24,019,066 73,170 804,710 877,880 (44,321) 833,559 24,852,625 1,019,000 17,184 9,051 18,720 3,801 3,915 5,632 1,077,303

67

047 (100.325 54.1 Staff costs Salaries and wages Medical Share based compensation Pension costs .808 19.499 40.159 986.907 32.045 168.706 28.819.272 67 27.804 1.defined contribution plan 68 .614 1.114 17 20.212 1.179.838 1.741 22.400 1.865 30.278.214 11.575 2.301 1.561 587.600 (98.026 4.727 70.629 7. professional and other consultancy charges Other expenses Charges by related party Recovery of charges from related party 2010 2009 (Rupees in thousand) 733.138) 8. DISTRIBUTION COSTS Staff costs .625 47.defined benefit plan Pensioners' medical plan Provident fund cost .659) 7.563 14.293 28.048 63.603 55.033.defined contribution plan Pension fund cost .944 726.203 30.292.555 3.1 Advertisement and sales promotion Outward freight and handling Royalty and technical fee Utilities Depreciation Repairs and maintenance Rent.28.039.293 3.361 93.860 726. rates and taxes Amortisation of computer software Travelling and entertainment Stationery and office expenses Expenses on information technology Legal.072 62.998 20.note 28.108 7.944 4.444 127.694 619.098 21.933 733.defined benefit plan Gratuity costs .463 27.053 55.553 48.564.

ADMINISTRATIVE EXPENSES Staff costs .068 8.804 4.780 3.068 450 12.700 5.500 4.675 233.defined contribution plan Pension fund cost .478 29.2 Other expenses Charges by related party Recovery of charges from related party 2010 2009 (Rupees in thousand) 396.139 11.495 94.914 31.339 12.390 13.536 13.739 12.defined benefit plan Gratuity costs .408) 1.119 696 12.005 13.322 2.401 3.030.993 178.718 69 .245 13.912 8.defined benefit plan Pensioners' medical plan Provident fund cost .935 349.984 28.495 3. rates and taxes Amortisation of computer software Travelling and entertainment Stationery and office expenses Expenses on information technology Legal. pension.729 230.899 25. professional and other consultancy charges Auditors' remuneration .333 1.801 10.859 56.457 (17.718 57.179 43.959 71.847 37.892 62.347 16.609 29.defined contribution plan 300.note 29.506 349.29.675 36.437 69.note 29. third party expense verifications and certifications for various government agencies Out of pocket expenses 3. provident and gratuity funds.900 3.136 7. audit of consolidated financial statements.309) 1.826 4.219.022 24.609 33.143 30.304 396.974 11.2 Auditors' remuneration Audit fee Taxation services Limited review.1 Staff costs Salaries and wages Medical Share based compensation Pension costs .1 Utilities Depreciation Repairs and maintenance Rent.752 159.771 (20.072 91.881 218.

and Member.1 Donations Donations include the following in whom a director is interested: Name of Director Interest in Donee 1. Ehsan A.1 Workers' Welfare Fund Loss on disposal of property. Member. Malik Member Name and address of Donee AIESEC in Pakistan 201. 2nd Floor.2010 2009 (Rupees in thousand) 30.728 97.note 30.051 30. Lahore World Wide Fund for Nature.000 - Trustee Chairman. Resource Development.215 242.note 22. Ferozepur Road.1 Workers' Profits Participation Fund . Board Member Pro-Chancellor 25 - Lahore University of Management Sciences DHA.785 2010 2009 (Rupees in thousand) 100 80 1.514 92. Annual Giving Committee. Lahore - 2. plant and equipment 30. I.155 8.780 256.161 Corporate Member President-Emeritus 15 150 70 .543 388. The Duke of Edinburgh Awards Pakistan Aga Khan University 33. Karachi. Cotton Exchange Building.901 373.Chundrigar Road. OTHER OPERATING EXPENSES Donations . Health Science Committee.I.

474 587 427.437 189.036 25.054 40.674 30.918 1.note 31.170.987) 1. 2010 2009 (Rupees in thousand) 132.073 3.567.942 12 993 - 15.194 155.583 229.409 1.714 22.096 1.for the year Pakistan Azad Kashmir Deferred tax .719 37.Unilever Pakistan Foods Limited.536.027 23.193.797 24.865 71 .422 66. plant and equipment Sundries Others Service fee from related parties .(credit) / charge 1.459.009 29. in accordance with the Service Agreement between the two companies.1 Provision for doubtful trade debts written back Provision no longer required written back Liabilities no longer payable written back 2010 2009 (Rupees in thousand) 12 1.097 192.444 13.708 32.507.631 23.361 1. OTHER OPERATING INCOME Income from financial assets Dividend income Return on savings accounts Income on deposit accounts Income from non-financial assets Scrap sales Profit on disposal of property.236 400 124.1 This includes amount charged by the Company for certain management and other services rendered to its related party .313 31.083 (59. TAXATION Current .420 2.477 1.146 37.614 36.086 11.429 22.388 266.31. FINANCE COST Mark-up on short term borrowings Bank charges Exchange loss Finance charge on finance leases Others 33.

tea Ice Cream Spreads 1.037.673.104 6.911) (798.272.294 230 There is no dilutive effect on the basic earnings per share of the Company.758.459.462 (648) (119.501 13.967 (1.507. CASH AND CASH EQUIVALENTS Cash and bank balances Short term borrowings .096 4. EARNINGS PER SHARE Profit after tax Preference dividend on cumulative preference shares Profit after taxation attributable to ordinary shareholders Weighted average number of shares in issue during the year (in thousands) Earnings per share (Rupees) 3.298 1.740 (239) 3.143) 1.running finance under mark-up arrangements 36.580.949) 1. 2010 2009 (Rupees in thousand) 35.1 Relationship between tax expense and accounting profit Accounting profit before tax Tax at the applicable tax rate of 35% Tax effect of permanent differences Tax effect of credits Tax effect of final tax Tax expense for the year 2010 2009 (Rupees in thousand) 4.865 34.33.110 239.631 (54. Management has determined the operating segments based on the information that is presented to the Chief Executive Officer of the Company for allocation of resources and assessment of performance. SEGMENT INFORMATION A business segment is a group of assets and operations engaged in providing products that are subject to risks and returns that are different from those of other business segments.460.976) (117.553 (297. the Company is organised into the following four operating segments: Home and Personal Care Beverages .358) 72 . Based on internal management reporting structure and products produced and sold.273.963 3.294 246 13.055.605 1.515.663) 1.780.055.202 (239) 3.

restructuring cost.784 142.136.814 4. 2009 Segment assets Segment liabilities Beverages Ice Cream (Rupees in thousand) 4.722.323.507 5. and taxation are managed at Company level.350 73 .525 835.225 3.555.286 960. other receivables. 2009 Revenue Segment results 24.478 3.197 509.898 5.331 10. 2010 is as follows: Home and Personal Care Beverages Ice Cream Spreads Total (Rupees in thousand) Year ended December 31.298 5.548.780.785 Reconciliation of segment results with profit from operations: 2010 2009 (Rupees in thousand) Total results for reportable segments Restructuring costs Other operating expenses Other operating income Finance cost Profit before tax Information on assets and liabilities by segment is as follows: Home and Personal Care As at December 31.917 2.647 2.837 13. 2010 Segment assets Segment liabilities As at December 31. Further.146 (189.943 44.801 3.277.022.326 127.979.583) 4.671.1 Segment analysis The segment information for the reportable segments for the year ended December 31. trade deposits and short term prepayments.124.515. unallocated assets include long term investments.017.582 5.124.051) 124. Finance cost.786 (90.263 1.785 (373.124 128.942.818 Spreads Total 5.718 276.294.605 3. tax refunds due from government and cash and bank balances.694.122.849 5. long term loans and advances.165.725 113. Segment results and assets include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.133 537.708) 4.313 (427.000) (388.894 38.390. other operating income and expenses.856 187.128.272.323.440.187.183 4.108 1.024 269.212.195.926 659.495 3.786 21. 2010 Revenue Segment results Year ended December 31.315 3.Management monitors the operating results of abovementioned segments separately for the purpose of making decisions about resources to be allocated and of assessing performance. loans and advances.632 939.840. long term deposits and prepayments.576 9.472 3.076 11. accrued interest. 36.785) 192.138 267.060.162.

834 156.205 3.760 601.028 212.238 39.630 Other segment information is as follows: Home and Personal Care Year ended December 31.159 986.867 1.614 1.273 2.821 487.40%) and to customers outside Pakistan are 1.107 3.615 478.566.208 728.843 295.942.303. 2009 Assets Liabilities Assets (Rupees in thousand) 5.472 9.036 44.925 25.654 9.463 776.501.873 341.367.254 470. 2010 As at December 31.278.495 2.864 402.629. 2009 Staff costs Advertisement and sales promotion Outward freight and handling Royalty and technical fee Depreciation 1.60%) of the revenue during the year.052 10.3% (2009: 97. 36.174 4.214 553.932 31.894 228.064 371.573 181.7% (2009: 2.006 Beverages Ice Cream Spreads Total (Rupees in thousand) 36.787 20.819.220 11.237 555.533 211.521 599.135.026 31.122.108 496.425.818 4.294.292.804 1.258 13.Reconciliation of segments' assets and liabilities with totals in the balance sheet is as follows: As at December 31.257 9.350 4.928.153.715 Liabilities Total for reportable segments Unallocated assets / liabilities Total as per balance sheet 10. 74 .849 2.765 189.564.039.708 910.771.881 762.432 2.555.180 2.083.717 279.838 1.2 Sales to domestic customers in Pakistan are 98.593 287.280 8.121.311 145.691 666.558.633.449 163. 2010 Staff costs Advertisement and sales promotion Outward freight and handling Royalty and technical fee Depreciation Year ended December 31.685 44.3 The Company's customer base is diverse with no single customer accounting for more than 10% of net revenues.836 2.112 32.718 135.

302 122. 28 and 29.161 10. Others Donations 245.078 1.140 101.324 61. The related party status of outstanding balances as at December 31. The Company has entered into agreements with its associate.495 68.473 2.063 37.755 679.1 and 22.073 121. Key management personnel Salaries and other short-term employee benefits Post-employment benefits Consideration received for vehicles sold iv.292.37. Unilever Pakistan Foods Limited to share various administrative and other resources. The charges by and recovery of costs from the associate have been disclosed in notes 27. ii. 2010 is included in other receivables and trade and other payables respectively. Ultimate parent company Royalty and technical fee Associated companies Purchase of goods Sale of goods Fee for receiving of services from related party Payment to related parties for intangible asset Reimbursement of expenses to related party Recovery of expenses from related party Fee for providing of services to related party Contribution to : -Defined Contribution plans -Defined Benefit plans Settlement on behalf of : -Defined Contribution plans -Defined Benefit plans Purchase of operating assets iii.326.734 7.983 189.420 62. Other transactions with related parties are settled in the ordinary course of business.605 31.108 Nature of transactions 2010 2009 (Rupees in thousand) 101. RELATED PARTY TRANSACTIONS The following transactions were carried out with related parties during the year: Relationship with the Company i.690 37 2.4.034 428.573 36.564.329 99.486 Royalty and technical fee are paid in accordance with the agreements duly acknowledged by the State Bank of Pakistan.165 1.502 8.877.553 7. 75 .195 91.943 1.214 1.467 126.731 435.205 610 1.041 1. Arrangements with parent company and an associated company for granting of their shares to employees of Unilever Pakistan Limited are disclosed in notes 13.

830 19.419 550 362.942 1.459 92.510 809.694 379 44.30 million (2009: Rs.031 4 24.511 7.857 3. 246. chief executive and certain executives of the Company are provided with free use of cars and household equipments. a lump sum amount of Rs.958 1.38.135 45. Aggregate amount charged in these financial statements for the year for fee to 2 non.652 6.14 million) on account of variable pay has been accounted for in the financial statements for the current year payable in 2011 after verification of target achievement.628 1 13.102 10. chief executive and executives of the Company are as follows: Executive Directors 2010 2009 Managerial remuneration and allowances Share based compensation Retirement benefits * Rent and utilities Medical expenses Other expenses Number of persons Chief Executive 2010 2009 (Rupees in thousand) 14.470 27. CHIEF EXECUTIVE AND EXECUTIVES The aggregate amounts charged in the financial statements of the year for remuneration including all benefits to directors.122 572.006 9. 270 thousand (2009: 2 non-executive directors Rs. Out of the variable pay recognised for 2009 and 2008 following payments were made: Paid in Paid in 2010 2009 relating to relating to 2009 2008 (Rupees in thousand) Executive Directors Chief Executive Executives Other employees 15. REMUNERATION OF DIRECTORS.550 7.710 2.874 3.801 118.343 5 600.206 1 Executives 2010 2009 28.885 191.122 1.544 311 41.017 * Retirement benefits represent amount contributed towards various retirement benefit plans.925 5.334 810 174 2.830 4. The executive directors.612 12.770 40.797 157.554 9.827 84.548 6. 76 .138 142.executive directors was Rs. 300 thousand).411 64.418 11.757 8.535 115 2.106 27.967 11.433 93. 251.005 325 In addition to this.

877 297.795 70.198 22.330 19.601 1.168.363. 2010 December 31.671 (1.280.617 522.291. 2010 December 31.1 Financial risk factors The Company's activities expose it to variety of financial risks: market risk (including currency risk and interest rate risk). 2009 FINANCIAL LIABILITIES At amortised cost Trade and other payables Accrued interest / mark-up Liabilities against assets subject to finance leases Short term borrowings December 31.315 16.795 70.503.311 20.39.299 34.520.079.818) (56.886) (19.066.509 1.098.240 37 Annual capacity of Beverages and Home and Personal Care was increased in lieu of higher anticipated sales in future.302 Sub-total Non-interest bearing Maturity up Maturity Sub-total to one after one year year (Rupees in thousand) Total The carrying values of all financial assets and liabilities reflected in the financial statements approximate their fair values.991 195.536.489 (1.021 (6.122.315 16.065.960 659.795 70.021 132.818 56.553) (5.275 1.601 95.648) (6.784 1.781.520. 2010 December 31. The current capacity was under utilised on account of lower demand.198 22.519 522.689) (5.601.838 1. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES 40.509 444 48.202 2.020 1. 40. 77 .123.818 19.861 Million Litres 77 49 46.092 7.509 444 1.519 522.214.887 1.837 83.960 659.202 1.762 48.184 7.184 48.202 180.883 51.2 Financial assets and liabilities by category and their respective maturities Interest bearing Maturity up Maturity to one after one year year FINANCIAL ASSETS Loans and receivables Loans and advances to employees Deposits Trade debts Other receivables Cash and bank balances 1.110 95.520.322.370. 2009 OFF BALANCE SHEET ITEMS Letters of credit / guarantees December 31. 40. 2009 ON BALANCE SHEET GAP December 31. CAPACITY Annual Capacity 2010 2009 Actual Production 2010 2009 Metric Tons Own manufacture Home and Personal Care Beverages Ice Cream 60.695 297.695 297.758.499 5.536.143 326.098.547 7.587 33. 2009 1.960 1.499 5.600 772.215) (4.858 132.991 195.098. credit risk and liquidity risk.385 62.143 7.247.822 334.710) 180.882.247.762) 752.315 16.078.377 77 58.639 1.284 883.547 7.429 58.509 Long term investments at cost December 31.033.224) (4.902 95. The Company's overall risk management programme focuses on having cost effective funding as well as manage financial risk to minimise earnings volatility and provide maximum return to shareholders.184 7.337) 28.143 345.337 6.098.

30. 2010 trade debts of Rs. profit before tax for the year would have been lower/ higher by Rs. past experiences and other factors. mainly as a result of foreign exchange losses / gains on translation of Euro denominated financial assets and liabilities.6 billion the financial assets that are subject to credit risk amounted to Rs.72 million).78 million (2009: Rs. internal risk assessment process determines the credit quality of the customers. The sensitivity of foreign exchange rate looks at the outstanding foreign exchange balances of the Company only as at the balance sheet date and assumes this is the position for a full twelvemonth period. As at December 31. The carrying amount of trade debts relates to a number of independent customers for whom there is no recent history of default.8 million. 155. The maximum exposure to credit risk is equal to the carrying amount of financial assets. Loans and advances to employees are not exposed to any material credit risk since these are secured against their retirement benefits. are not exposed to any significant credit risk. Individual risk limits are set based on internal or external credit worthiness ratings in accordance with limits set by the management. 522.39 million (2009: Rs.71 million were past due but not impaired. 2.32 million) and financial liabilities of Rs.34 billion (2009: Rs. The volatility percentages for movement in foreign exchange rates have been used due to the fact that historically (5 years) rates have moved on average basis by the mentioned percentages per annum. As at December 31. mainly as a result of foreign exchange losses/ gains on translation of US Dollar denominated financial assets and liabilities. 2010. Deposits have been placed mainly against shipping guarantees and letters of credit hence exposed to no significant credit risk. (ii) Liquidity risk Liquidity risk reflects the Company's inability in raising funds to meet commitments. 1. if the Pakistan Rupee had weakened / strengthened by 11% against Euro with all other variables held constant. therefore. profit before tax for the year would have been lower/ higher by Rs. 11. 119. taking into account their financial positions. 78 . financial assets of Rs. 2.20 billion) were in foreign currency which were exposed to foreign currency risk. 242. 2010. (iii) a) Market risk Foreign exchange risk Foreign exchange risk arises mainly where receivables and payables exist in foreign currency.64 million (2009: Rs. 3. 2010. For trade debts. The management does not expect any losses from non-performance by these counterparties. Out of the total financial assets of Rs.(i) Credit risk Credit risk represents the accounting loss that would be recognised at the reporting date if counter parties failed to perform as contracted. Other receivables constitute mainly receivables from the related parties.46 million). As at December 31. As of December 31. if the Pakistan Rupee had weakened / strengthened by 8% against US Dollar with all other variables held constant. 13. The Company manages liquidity risk by maintaining sufficient cash and bank balances and the availability of financing through banking arrangements. The bank balances represent low credit risk as they are placed with banks having good credit ratings assigned by credit rating agencies.

profit before tax for the year would have been approximately Rs.560. mainly as a result of higher / lower interest expense on floating rate borrowings. 41.758.110) (1. The net debt to equity ratios as at December 31. 345. 2010.553) 883. 6. 2010 and 2009 were as follows: 2010 2009 (Rupees in thousand) Total borrowings Cash and bank Net (surplus cash) / debt Total equity Total equity and debt Net debt to equity ratio 345.318 1.123.84 million (2009: Rs. At December 31. and had the interest rate varied by 200 basis points with all the other variables held constant.12 billion).560. Borrowings obtained at variable rates expose the Company to cash flow interest rate risk.120 4. 79 .412. 22.659 21% The Company finances its operations through equity. During 2010 the Company's strategy was to maintain leveraged gearing.291.b) Interest rate risk The Company’s interest rate risk arises from borrowings as the Company has no significant variable interest-bearing assets. CAPITAL RISK MANAGEMENT The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going concern in order to provide returns for shareholders and benefit for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. borrowings and management of working capital with a view to maintaining an appropriate mix between various sources of finance.539 3.46 million) lower / higher.91 million (2009: Rs.838 (1.174. 1.318 3.092 (239.272) 3. the Company had variable interest bearing financial liabilities of Rs.

based on legal advice.229 6.000 each Motor vehicles 49.020 Company " " " " " Mr. Adil Tahir . DETAILS OF PROPERTY.42. the appeal is pending for hearing.739 32. Ahsan Saleem .288 - 139 30. 80 .359 23. Talha Tariq .183 88. PLANT AND EQUIPMENT DISPOSALS The details of property.897 126 23. 2006. The Company filed an appeal in the High Court of Sindh against the Order which was admitted and the operation of MCA's order was stayed. 250 million to Dalda Foods (Private) Limited (DFL) within fifteen days of receipt of the Order. 1970. Amin Khalique . Zunair Hussain Khan .865 Assets having book value less than Rs.816 179 236 236 118 153 127 1.Executive Mr.Executive Sale Mode of Disposal Proceeds Particulars of Purchaser Electrical and mechanical Plant and Machinery 6.049 302 450 466 240 286 276 2. 50.023 48.283 43.054 8.Executive Mr.129 80. the management.288 6. MONOPOLY CONTROL AUTHORITY ORDER With respect to the Monopoly Control Authority (MCA) Order dated December 19.385 230 395 395 259 256 281 1.Executive Mr. Haseeb Siddiqui . plant and equipment disposed of during the year are given below: Cost Accumulated Book Depreciation / Value Impairment (Rupees in thousand) Motor Vehicles 409 631 631 377 409 408 2.Executive Mr. terminating the non-competition agreement and requiring the Company to refund the amount of Rs.Executive Mr. At present. is of the view that the agreement between the Company and DFL is not in violation of Monopolies and Restrictive Trade Practices Ordinance.130 7.

2011. Reclassification from Trade deposits and short term prepayments Reclassification to Rupees in thousand Intangible asset under development 355. 92 per share amounting to a total dividend of Rs. DATE OF AUTHORISATION These financial statements were authorised for issue on February 14.09 billion is proposed (2009: Rs. December 31. Malik Chairman & Chief Executive Imran Husain Director & Chief Financial Officer 81 . On ordinary shares At the Board meeting held on February 14. 2011. 1. 157 per share amounting to a total dividend of Rs. therefore. 2008 and 2009. 239 thousand has been declared (2009: Rs. 2. 1. 2011. CORRESPONDING FIGURES The following prior year figure has been reclassified for the purpose of appropriate presentation. a final dividend in respect of 2010 of Rs. PROPOSED AND DECLARED DIVIDENDS On 5% cumulative preference shares At the Board meeting held on February 14. 2008. which will be accounted for in the statement of changes in equity as an appropriation from the unappropriated profit in the year ending December 31. 46. 137 per share amounting to a total dividend of Rs. 141. 1. Ehsan A. These financial statements do not reflect the proposed final dividend on ordinary shares and the dividend declared on cumulative preference shares as payable. the Company has not presented the balance sheet as at the beginning of the earliest comparative period presented (i. 2009) and the related notes have also not been presented as of the beginning of that earliest period presented. 2011.123 As the reclassification is considered not to be material in the overall context of the balance sheet and does not have any significant impact on the financial statements for the year ended December 31.e.27 million. 89 per share amounting to a total dividend of Rs. The aforesaid reclassification has not had any impact on the figures of total assets as of December 31. by the Board of Directors of the Company. The related figure for reclassification in 2008 is Rs.44. 45.18 billion (2009: Rs. dividend in respect of 2010 of Rs. 239 thousand).22 billion). The interim dividend declared and already paid in respect of 2010 was Rs.82 billion).

82 .

Consolidated Statements 2010 Unilever Pakistan Limited and its subsidiary companies Financial .

84 .

These financial statements are the responsibility of the Holding Company's management. We have also expressed separate opinions on the financial statements of Unilever Pakistan Limited and its subsidiary companies. Our audit was conducted in accordance with the International Standards on Auditing and accordingly included such tests of accounting records and such other auditing procedures as we considered necessary in the circumstances. 2010 and the related consolidated Profit and Loss Account.F.Ferguson & Co. A. Our responsibility is to express an opinion on these financial statements based on our audit. 2010 and the results of their operations for the year then ended. Levers Associated Pakistan Trust (Private) Limited and Sadiq (Private) Limited as at December 31. 2011 Name of Engagement Partner: Ali Muhammad Mesia 85 .Auditors' Report to the Members We have audited the annexed consolidated financial statements comprising consolidated Balance Sheet of Unilever Pakistan Limited (the Holding Company) and its subsidiary companies Lever Chemicals (Private) Limited. Chartered Accountants Karachi Dated: February 18. consolidated Cash Flow Statement and consolidated Statement of Changes in Equity together with the notes forming part thereof. In our opinion the consolidated financial statements present fairly the financial position of Unilever Pakistan Limited and its subsidiary companies as at December 31. for the year then ended.

649.826 82.896 188.052 102.699 35 243.661 70.prepayments Current assets Stores and spares Stock in trade Trade debts Loans and advances Accrued interest / mark up Trade deposits and short term prepayments Other receivables Tax refunds due from the Government Investment .357 131.143 355.650 3 4 5 6 7 8 4.054 5.795 126.997 148.887 27.800 5.Consolidated Balance Sheet as at December 31.034 11.086 200 83.773.881.736.893 265.189 278. plant and equipment Intangibles Long term investments Long term loans Long term deposits and prepayments Retirement benefits .092 86 .762.979.644 5.354 1. 2010 Note ASSETS Non-current assets Property.117 392.698.141 4.852 97 327.960 466.070 506.650 7.171 821.619 357.007 522.held to maturity Cash and bank balances 9 10 11 12 13 14 15 16 17 357.574.472.554.556 200 98.897.420 3.442 2010 2009 (Rupees in thousand) Total assets 13.338 3.394 143.

763 56.184 297.892 1.229 3.421 26 13.107.533 12.034 11.184 5.477 2.554.143 358.965 Surplus on revaluation of fixed assets Liabilities Non-current liabilities Liabilities against assets subject to finance leases Deferred taxation Retirement benefits obligations Current liabilities Trade and other payables Taxation .800 8.930.331.952 23 24 21 25 8.317 669.056 3.201 28.762 636.477 2.060 1.911 28.092 Total equity and liabilities The annexed notes 1 to 47 form an integral part of these financial statements. Malik Chairman & Chief Executive Imran Husain Director & Chief Financial Officer 87 .472.818 576.802 954.235.019.706 12.469 8.662.942.366 4.611.provisions less payments Accrued interest / mark-up Short term borrowings Current maturity of liabilities against assets subject to finance leases Provisions Total liabilities Contingencies and commitments 20 21 22 8 19.127.787.877 397.Note EQUITY AND LIABILITIES Capital and reserves Share capital Reserves 18 19 2010 2009 (Rupees in thousand) 669.421 9.130 327.143 28.975.680 7. Ehsan A.037.419 220.346 71 16.

094.785) 209.528) (373.507 (30.694) (1.000) 4.334.051) 140.588 (427.512. 2010 Note 2010 2009 (Rupees in thousand) 44.852.960.Consolidated Profit and Loss Account for the year ended December 31.651 (1.960. Malik Chairman & Chief Executive Imran Husain Director & Chief Financial Officer 88 .308 Restructuring cost Profit from operations Finance cost Profit before taxation Taxation Profit after taxation 34 33 (90.076.561) (1.033.179.623 5.986.879 (1.831 38.030.820) 3.577.282 29 30 31 32 (8.219.796.187.657) 4.588 4.985) (388.638 4.625) 13.308 (189.283.964 Sales Cost of sales Gross profit Distribution costs Administrative expenses Other operating expenses Other operating income 27 28 Earnings per share (Rupees) 35 247 231 The annexed notes 1 to 47 form an integral part of these financial statements. Ehsan A.709) 4.465.957 (7.225) 14.532.066.671.915) 3.582 (24.

009 13.438) 5.461 5.120 2.433 (24. plant and equipment Dividend income Mark-up on short term borrowings Finance charge on finance leases Provision for staff retirement benefits Return on savings accounts and deposit accounts Return on investment .879 496.219.166.651 553.580 177.126) (2.329.908 7.112 4.054) (12) 132.918) (231.020 (23.held to maturity 4.192) 1.948) (166.474 523.870 8.605.594) (7.879) 956.709.194 (372.183 (239.937) (16.709 Effect on cash flows due to working capital changes (Increase) / Decrease in current assets Stores and spares Stock in trade Trade debts Loans and advances Trade deposits and short term prepayments Other receivables Increase / (Decrease) in current liabilities Trade and other payables Provisions (91.667) 602. 2010 2010 2009 (Rupees in thousand) Cash flows from operating activities Profit before taxation Adjustments for non-cash charges and other items Depreciation Amortisation of software (Gain) / Loss on disposal of property.867 4.901 (12) 229.103.559 7.532.039 (16.268 Cash generated from operations (carried forward) 89 .506) 136.244 1.357 (10.315 1.006 2.631 11.153 84.115 263.257.437 153.796.165 11.010.236) (10.101) 808.Consolidated Cash Flow Statement for the year ended December 31.792) 2.790.844 (277.700 2.830 5.343.

361) 14.020 (145.773) (2. Malik Chairman & Chief Executive Imran Husain Director & Chief Financial Officer 90 .688.268 (264.002.535) 62.899 6.854) (872. Ehsan A.997) 12 (958.989.284.010.155 19.709.230 364.170 7.064) 12 (909.224.247 (3.212.339) (1.Consolidated Cash Flow Statement .298 (31.542) 2.010.267) 1.465. plant and equipment Return received on savings accounts and deposit accounts Investment in treasury bills Dividend received Net cash used in investing activities Cash flows from financing activities Dividends paid Finance lease obligation paid Net cash used in financing activities Net increase in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year 36 7.942) (2.283 10. plant and equipment Payment for intangible asset under development Sale proceeds on disposal of property.774 (759.923) (3.497) (418.192) (1.311) (68.596) 32.172.279) (82.619) (47.507 (1.267) The annexed notes 1 to 47 form an integral part of these financial statements.704) (37.666 (721. 2010 Note 2010 2009 (Rupees in thousand) Cash generated from operations (brought forward) Mark-up on short term borrowings paid Income tax paid Retirement benefits obligations paid Decrease in long term loans Decrease in long term deposits and prepayments Net cash from operating activities Cash flows from investing activities Purchase of property.972.903 (99.787) (199.646) 2.037.428 147.243.Continued for the year ended December 31.131 5.472) 22.514) (759.

929 - 321.964 1.477 - 70.Final dividend on ordinary shares @ Rs. 2009 Net profit for the year Transferred from surplus on revaluation of fixed assets .223.964 - - - 648 648 648 - - - (239) (757.829 3.831 - - - 648 648 648 - - - (239) (1.Interim dividend on ordinary shares @ Rs. 57 per share For the year ended December 31.662.183.611.036) 2.942.471 - (1.120 3.283.245.471 (1.Final dividend on ordinary shares @ Rs.549.821. 92 per share Balance as at December 31.153) 2.821.Interim dividend on ordinary shares @ Rs.net of deferred taxation: .223. 2008 .331.269.964 2.477 - 70.656 (1.183.incremental depreciation for the year Dividends For the year ended December 31.036) 2. 2009 .471 - 1.net of deferred taxation: . 89 per share Balance as at December 31. 2009 Net profit for the year Transferred from surplus on revaluation of fixed assets .821. 2009 .477 70.183.066.153) 2.706 3.751) (239) (757.On cumulative preference shares @ 5% per share . 2010 .223.On cumulative preference shares @ 5% per share .260) 669.283. 2010 SHARE CAPITAL CAPITAL Arising under schemes of arrangements for amalgamations Contingency RESERVES TOTAL REVENUE Unappropriated profit SUB TOTAL ( Rupees in thousand ) Balance as at January 1. 137 per share For the year ended December 31.066.243 3.643 3.260) (239) (1. 2010 669.066.929 321.751) 669.831 (1.831 (1.036) 3.incremental depreciation for the year Dividends For the year ended December 31.183.283.153) 3.533 The annexed notes 1 to 47 form an integral part of these financial statements. Ehsan A.929 - 321.Consolidated Statement of Changes in Equity for the year ended December 31.229 3.751) (239) (757.056 (1.260) (239) (1. Malik Chairman & Chief Executive Imran Husain Director & Chief Financial Officer 91 .575.

provisions of and directives issued under the Companies Ordinance. It manufactures and markets home and personal care products. beverages. 1. 92 . The parent company of the Group is Unilever Overseas Holdings Limited. Levers Chemicals (Private) Limited used to manufacture and sell Sulphonic Acid. Approved accounting standards comprise of such International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board as are notified under the Companies Ordinance. All intercompany balances and transactions have been eliminated. Levers Chemicals (Private) Limited (LCL) is not carrying on any business operations. 1984 shall prevail. UK whereas its ultimate parent company is Unilever PLC. Unilever Pakistan Limited is a limited liability company incorporated in Pakistan and is listed on the Karachi. Levers Associated Pakistan Trust (Private) Limited and Sadiq (Private) Limited act as trustees of Union Pakistan Provident Fund (Unilever Provident Fund). 2.1 Basis of preparation Statement of compliance These financial statements have been prepared in accordance with approved accounting standards as applicable in Pakistan. Levers Associated Pakistan Trust (Private) Limited and Sadiq (Private) Limited are wholly owned subsidiaries of Unilever Pakistan Limited.1 2. 1. 1984. 2. 1984. ice cream and spreads. 2010 1. Lahore and Islamabad Stock Exchanges. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting policies adopted are the same as those applied for the previous financial year. In case requirements differ.1 THE GROUP AND ITS OPERATIONS The Group consists of: I) II) III) IV) Unilever Pakistan Limited (the “Company”) Levers Chemicals (Private) Limited Levers Associated Pakistan Trust (Private) Limited Sadiq (Private) Limited Levers Chemicals (Private) Limited. Levers Chemicals (Private) Limited.1.Notes to and Forming Part of the Consolidated Financial Statements for the year ended December 31. The financial statements of the subsidiary companies have been consolidated on a line by line basis. UK. the provisions or directives of the Companies Ordinance. All subsidiary companies are incorporated in Pakistan. Levers Associated Pakistan Trust (Private) Limited and Sadiq (Private) Limited.2 Basis of consolidation The consolidated financial statements include the financial statements of Unilever Pakistan Limited.

2 Critical accounting estimates and judgements The preparation of financial statements in conformity with approved accounting standards requires the use of certain critical accounting estimates. such differences impact the income tax provision in the period in which such determination is made. 2. The nature of these costs is such that judgement is involved in estimating the timing and amount of cash flows. There have been no critical judgements made by the Group's management in applying the accounting policies that would have significant effect on the amounts recognised in the financial statements. However. incorporates the guidance contained in IFRIC 8. where the final tax outcome is different from the amounts that were initially recorded. The areas involving a higher degree of judgement or complexity. Estimates and judgements are continually evaluated and are based on historical experience and other factors.1. It also requires management to exercise its judgement in the process of applying the Group's accounting policies. (ii) Post employment benefits Significant estimates relating to post employment benefits are disclosed in note 8. for legal matters. interpretations and pronouncements Standards. There is no effect of the new amendment on the Group’s financial statements. and IFRIC 11.1. employee termination cost and restructuring where a legal or constructive obligation exists at the balance sheet date and reliable estimate can be made of the likely outcome. disputed indirect taxes. (iii) Provisions Provisions are considered. interpretations and amendments to published approved accounting standards that are effective in the current year (i) IFRS 2 (Amendments). or areas where assumptions and estimates are significant to the financial statements are as follows: (i) Taxation The Group accounts for provision for income tax based on current best estimates. ‘Group cash-settled share-based payment transactions’. among others. 93 . including expectations of future events that are believed to be reasonable under the circumstances.2.3 a) Changes in accounting standards. ‘IFRS 2 – Group and treasury share transactions’ and further expands on the guidance in IFRIC 11 to address the classification of group arrangements that were not covered by that interpretation. ‘Scope of IFRS 2’.

either in the statement of changes in equity or in the notes to the financial statements. 94 . This amendment requires an entity to present an analysis of other comprehensive income for each component of equity. The new amendment is not expected to have a material impact on the Group’s financial statements. minimum funding requirements and their interaction'. interpretations and amendments to published approved accounting standards that are not yet effective but relevant (i) IAS 1 (Amendment). is effective for the accounting periods beginning on or after January 01. 2011. is effective for the accounting periods beginning on or after January 01. The segment assets are reported regularly to the Group’s Chief Operating Decision-maker. The new amendment may extend the disclosures for any other comprehensive income in the Group’s financial statements. 2011. 2010 are considered not to be relevant or to have any significant effect on the Group’s financial reporting and operations. The revised standard is not expected to have a material impact on the Group’s financial statements. amendments and interpretations that are mandatory for accounting periods beginning on or after January 01. is effective for the accounting periods beginning on or after January 01. ‘IAS 19 – The limit on a defined benefit assets. therefore the adoption of this amendment has no effect on the disclosures of Operating Segments presented in note 37 to the financial statements. interpretations and amendments to published approved accounting standards effective in 2010 but not relevant The other new standards. clarifies that an entity is required to disclose a measure of segment assets only if that measure is regularly reported to the Chief Operating Decision-maker. 2011. b) Standards. ‘Disclosure of information about segment assets’. This amendment emphasises the interaction between quantitative and qualitative disclosures about the nature and extent of risks associated with financial instruments. ‘Financial Instruments: Disclosures’. The new amendment is not expected to have a material impact on the Group’s financial statements. (iv) IFRIC 13 (Amendment). (ii) (iii) IFRS 7 (Amendment). is effective for the accounting periods beginning on or after January 01. 2011. It amends the definition of a related party and modifies certain related party disclosure requirements for government-related entities. It removes the unidentified consequences of the existing standard that restricted the recognition of some voluntary prepayments for minimum funding contributions as an asset. The new amendment is not expected to materially affect the financial instrument disclosures in the Group’s financial statements. c) Standards. (v) IFRIC 14 (Amendment). ‘Customer Loyalty Programmes’. 2011. IAS 24 (Revised). ‘Presentation of Financial Statements’. ‘Related Party Disclosures’. It clarifies the meaning of fair value in the context of measuring award credits under customer loyalty programmes. is effective for the accounting periods beginning on or after January 01.(ii) IFRS 8 (Amendment).

In compliance with the revised International Accounting Standard No. 1975. are retired. where indication exists. however. is recognised in accordance with section 235 of the Companies Ordinance. Maintenance and normal repairs are charged to income as and when incurred. plant and equipment is stated at cost less depreciation and impairment.2 Overall valuation policy These financial statements have been prepared under the historical cost convention except as disclosed in the accounting policy notes. also individual assets costing up to Rs. plant and equipment and the revalued figures were treated as deemed costs. if any. 95 . Gains and losses on disposal of property. 16. The Group accounts for impairment. (ii) Investment . These are stated at amortised cost. if any. "Property.4 Intangibles Intangibles are stated at cost less amortisation. 2. over their estimated useful lives. Major computer software licences are capitalised on the basis of costs incurred to acquire and bring to use the specific software.3 Property. 2. plant and equipment Property.2. 1984.5 Investments (i) In unlisted entity not being subsidiary These are valued at cost and are classified under investment available-for-sale.000 are charged to income. if not insignificant. 1978 and 1981 by independent valuers. Costs associated with maintaining computer software programmes are recognised as an expense as and when incurred. Major renewals and improvements are capitalised and assets so replaced. the Group adopted cost model for its property.held to maturity These are investments with fixed or determinable payments and fixed maturity with the Group having positive intent and ability to hold till maturity. Plant and Equipment". by reducing assets carrying value to the assessed recoverable amount. buildings and plant and machinery were revalued in 1973. plant and equipment are recognised in the profit and loss account. 2. Certain land. Depreciation is calculated using the straight-line method on all assets in use at the beginning of each quarter to charge off their cost excluding residual value. which are shown at such revalued figures. 10. These costs are amortised over their estimated useful life of five years using the straight-line method. except capital work in progress which is stated at cost. The surplus on revaluation of these assets.

2. 2009. management gratuity and pensioners' medical plans. Deferred tax liability is generally recognised for all taxable temporary differences and deferred tax asset is recognised to the extent that it is probable that taxable profits will be available against which the deductible temporary differences. and permanent employees who joined on or before December 31.6 Taxation (i) Current The charge for current taxation is based on taxable income at the applicable rates of taxation determined in accordance with the prevailing law for taxation after taking into account tax credits and rebates available. Contributions are made by the Group to the plan at the rate of 9% per annum of the gross salary. Equal monthly contributions are made. 2.7 Retirement benefits Defined contribution plans (i) Provident fund The Group operates an approved contributory provident fund for all employees. to the fund at the rate of 6% per annum of the gross salary. both by the Group and the employees. Obligation for contributions to defined contribution plan is recognised as an expense in the profit and loss account as and when incurred. unused tax losses and tax credits can be utilised. (ii) DC Pension fund The Group has established a defined contribution plan .DC Pension Fund for the following management employees: a) b) permanent employees who joined on or after January 01. (ii) Deferred Deferred tax is provided using the liability method on all temporary differences arising between the tax base of assets and liabilities and their carrying amounts in the financial statements. 2008 and opted for DC Pension plan in lieu of future benefits under the existing pension. if any. Obligation for contributions to defined contribution plan is recognised as an expense in the profit and loss account as and when incurred. 96 .

Pensioners’ medical plan. 2. The plan reimburses actual medical expenses as defined in the plan. 2. which is a book reserve plan. Funded gratuity scheme for management and non-management employees of the Group. Cost is determined using the weighted average method except for those in transit where it represents invoice value and other charges paid thereon. Net realisable value is the estimated selling price in the ordinary course of business less cost necessarily to be incurred in order to make the sale. The latest actuarial valuation was carried out as at December 31. ii) iii) The above defined benefit plans are available only to those management employees who joined on or before December 31. 2010. By-product (glycerine) is valued at estimated cost except for the stock covered by a firm forward sale contract. 2008 and not opted for DC Pension scheme. using the ‘Projected Unit Credit Method’. using the ‘Projected Unit Credit Method’. Contributions are made on the basis of the actuarial valuation. 2010. Amounts recognised in the balance sheet represent the present value of defined benefit obligation as adjusted for unrecognised actuarial gains and losses and unrecognised past service costs. Any assets resulting from the calculation is limited to the unrecognised actuarial losses and unrecognised past service cost plus the present value of available refunds and reduction in future contribution to the plan. and as reduced by the fair value of plan assets. 97 .Defined benefit plans The Group operates the following schemes: i) Funded pension scheme for management employees of the Group. Items in transit are valued at cost comprising invoice value plus other charges incurred thereon. Contributions are made on the basis of the actuarial valuation.8 Stores and spares These are valued at average cost and provision is made for slow moving and obsolete stores and spares. if any.9 Stock in trade This is stated at the lower of cost and estimated net realisable value. Actuarial gains and losses are changes in present value of defined benefit obligation and fair value of plan assets due to differences between long term actuarial assumptions and actual short term experience. which is valued at the contracted price. The Group amortises such gains and losses each year by dividing the unrecognised balance at the beginning of the year by the average expected remaining service of current members. Cost of work in process includes direct cost of materials whereas that of finished goods also includes direct cost of labour and production overheads. The latest actuarial valuation was carried out as at December 31.

2. 2. construction or production of a qualifying asset. For the purposes of the cash flow statement. Assets on finance lease are capitalised at the commencement of the lease term at the lower of the fair value of leased assets and the present value of minimum lease payments. 2. Payments made under operating leases are charged to profit and loss on a straight-line basis over the period of the lease.14 Borrowings and their cost Borrowings are recorded at the proceeds received. deposit accounts with maturities of three months or less and short term finance. determined at the inception of the lease. Borrowing costs are recognised as an expense in the period in which these are incurred except to the extent of borrowing costs that are directly attributable to the acquisition. if any.11 Cash and cash equivalents Cash and cash equivalents are carried in the balance sheet at cost. cash and cash equivalents comprise cash in hand. Debts considered irrecoverable are written off and provision is made against those considered doubtful of recovery.13 Trade and other payables Liabilities for trade and other amounts payable are carried at cost which is the fair value of the consideration to be paid in future for goods and services. Such borrowing costs.12 Leases (i) Finance leases Leases that transfer substantially all the risks and rewards incidental to ownership of an asset are classified as finance leases.2. (ii) Operating leases Leases in which a significant portion of the risks and rewards of ownership is retained by the lessor are classified as operating leases. 98 . The finance cost is charged to profit and loss account and is included under finance cost. are capitalised as part of the cost of that asset. 2.10 Trade and other debts Trade and other debts are recognised at fair value of consideration receivable. Each lease payment is allocated between the liability and finance cost so as to achieve a constant rate on the finance balance outstanding. with banks on current and savings accounts.

The financial statements are presented in Pak Rupees.16 Financial assets and liabilities All financial assets and liabilities are initially measured at cost. it is probable that an outflow of resources will be required to settle the obligation.18 Revenue recognition Revenue is recognised to the extent it is probable that the economic benefits will flow to the Group and the revenue can be measured reliably. which is the fair value of the consideration given and received respectively. and return on savings accounts and deposit accounts is recognised using the effective interest rate method. amortised cost or cost. All monetary assets and liabilities in foreign currencies are translated into Pak Rupees at the rates of exchange prevailing at the balance sheet date.17 Foreign currency transactions and translation Foreign currency transactions are converted into Pak Rupees using the exchange rates prevailing at the dates of the transactions. and a reliable estimate of the amount can be made. 2. 99 .15 Provisions Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events. which is the Group’s functional and presentation currency. These financial assets and liabilities are subsequently measured at fair value. Revenue is measured at the fair value of the consideration received or receivable. 2. Exchange gains and losses are recognised in the profit and loss account.19 Segment information Operating segments are reported in a manner consistent with the internal reporting. and is recognised on the following basis: sale is recognised when the product is despatched to customers. 2.20 Dividend and appropriation to reserves Dividend and appropriation to reserves are recognised in the financial statements in the period in which these are approved.2. and are recognised in the period in which the Group becomes legally or constructively committed to incur. 2. 2. relocation and dismantling of factory. Restructuring cost provisions comprise staff redundancy payments. dividend income is recognised when the Group’s right to receive the payment is established. as the case may be.

241) 2.21 Share based payment The cost of awarding shares of Group companies to employees is reflected by recording a charge in the profit and loss account equivalent to the fair value of shares over the vesting period.226 4.875 80.075) (2.988.934 (7. Furniture machinery mechanical and and office fittings equipment Motor vehicles Owned Held under finance leases TOTAL Freehold Leasehold On On freehold leasehold land land (Rupees in thousand) Net carrying value basis Year ended December 31.575 25.229) (553.101.848 (1.413 (86.565.297 (39.953 (1.093 157.045) (497) (310) (8.997 20.219) (37.365) 82.075) 19.140) (44.531.469 4.818) (112. 2010 2009 (Rupees in thousand) 4.867) 4.048 586.2 3.612 (35) (2.430) (404.848 3.640 20.733) (437.799) 82.619 3.054) (444.note 3.1 Capital work in progress .640 20.272) 593.799 7.643) 321. 2009 Cost Accumulated depreciation Net book value (NBV) Depreciation rate % per annum 25.575 421 514.672 3.575 234 (5) 229 589.563.312) (2.773) 234 589.150) (2.171 4.341 (300) (181.567 46.011 22.886 90.056) (496.500 287.190 Net carrying value basis Year ended December 31.048 173.352 17.556 7.575 529 753.806 22.540.172 41.note 3.930 692.878) (61. 2010 Cost Accumulated depreciation Net book value (NBV) 25.359) (2.432) 3. corresponding provision created is reflected in the liability.430.500 287.656) (31.048 34. PROPERTY.5 to 2 8 to 20 8 to 20 8 to 14 25 25 100 . PLANT AND EQUIPMENT Operating assets .2.5 to 2.571 4.144 5.384 141.420.948 321.701 (60.848 3.563.412 80.997 19.857.431 (90.773 3.607 3.142.693 (181) (6) (15.417) 234 589.531.782 875.923 5.612 117.044 117.190 308.612 168.006) 4.797 2.948 287.108 162. 2010 Opening net book value (NBV) Additions (at cost) Disposals (at NBV) Depreciation charge Closing net book value (NBV) 25.563.029 (295) (163.588.087) (3.500 485.1 Operating assets Land Buildings Plant and Electrical.190 Gross carrying value basis At December 31.806 20.048 - 1.359 (898) 20.565. 2009 Opening net book value (NBV) Additions (at cost) Disposals (at NBV) Depreciation charge Closing net book value (NBV) 25.011 22.681 758.461) 229 593.588.308 82.076) (105.463 (18.269) 2.067) 3.556) (23.309) (24.897.755 (71.588.806 19.009.804) (384.575 529 775.308 36.981 4.226 72.880 92.377 (8.575 25.880 4.683 5.607 4.192) (2.226 4.469 4.at cost .606) (60.575 25.05 1.531.387 2.216 1.640 20.773 3.048 Gross carrying value basis At December 31.607 (1.996.5 1.923 5.998) 36.563.575 25.736.532) (20.918.330.

303 (4.2 5.906 308.1 Intangible asset under development . plant and equipment disposed off during the year are given in note 43.075 300. This represents license and consultation fee for the implementation of SAP Enterprise Resource Planning System (ERP) Solution.2010 2009 (Rupees in thousand) 3.348 (24.at cost Civil works Plant and machinery 8.147 161.000 6% redeemable cumulative preference shares of Rs.556 4.433 355. INTANGIBLES Computer Software .3 Details of property.915) 2.981 12.571 3.870) 2.424 173.5 2.086 821. 2010 2009 (Rupees in thousand) LONG TERM INVESTMENTS Investment available for sale .123 357.note 4.433) 7.086 2.1 Computer Software Net carrying value basis Opening net book value Amortisation charge Closing net book value Gross carrying value basis Cost Accumulated amortisation Net book value Remaining useful life in years 24. 2010 2009 (Rupees in thousand) 4.433 0. 100 each 200 200 200 200 101 .348) 24.433 4.2 Capital Work in Progress .2 821.433 (2.at cost Futehally Chemicals (Private) Limited 2.note 4.348 (21.

note 12 Long term portion 6.462 8.1 Reconciliation of carrying amount of loans to Director.774 114.667 11.725 102 .3 2010 2009 (Rupees in thousand) 430 5.115 (48.462 (3.199 100.6.211 2.2 and 6.602 (1.198 (48.144 151.708 122.344 5. vehicles and computers repayable in monthly installments over a period of three to five years.399 11.667 29.2 The above loans under the terms of employment have been given interest free to facilitate purchase of houses.considered good Related Parties Director Chief Executive note 6.691 (55.055) 8.546 137.708 40.128 Chief Executive 2010 2009 (Rupees in thousand) 8.708 6.344 (3.399 44.857 17.462 8. These loans are secured against retirement benefits of the employees.887 1. Loans granted during the year Transfers Recoveries 1. 6. Chief Executive and Executives: Director 2010 2009 Balance as at January 1.032) 430 (6.3 The maximum aggregate amount of loans due at the end of any month during the year was: 2010 2009 (Rupees in thousand) Director Chief Executive Executives 1. LONG TERM LOANS .757 126.399 9.055) 5.311) 83.523 11.117 Others Executives Other employees Recoverable within one year .454 Executive 2010 2009 96.684) 114. 6.1.254 147.666) 1.786 (44.376 8.998) 98.861 96.424 132.585) 96.

590 512 (14.222 (7.211 12.058 30.463 97.387 6.771 1.352 14.803 13.550 (144. Pension Fund 2010 2009 Gratuity Funds 2010 2009 (Rupees in thousand) 62.3 1.676 (10.771 36.590 3.329) 150.092) 1.221) 203.663) (203.505 416.063 275.925) 392.323) 13.709 3.586 (15.064 23.700) (144.13 are based on the information included in the actuarial valuation as of December 31.027 246.686) 3.028 36.301 171.182 Pensioners' Medical Plan 2010 2009 8. 2010.771 36.261) (192.936 (169.468.154 8.054 (266.498 38.809 (144.935) (534.484.727) 8.716 205.222 (186.2 Balance Sheet Reconciliation Fair value of plan assets Present value of defined benefit obligations Funded status Unrecognised net actuarial loss Recognised asset / (liability) Movement in the fair value of plan assets Fair value as at January 1 Expected return on plan assets Actuarial gains / (losses) Employer contributions Settlement and curtailment Benefits paid Fair value as at December 31 Movement in the defined benefit obligations Obligation as at January 1 Service cost Interest cost Settlement and curtailment Actuarial losses / (gains) Benefits paid Obligation as at December 31 Cost Current service cost Interest cost Expected return on plan assets Settlement and curtailment Recognition of actuarial loss Expense Actual return on plan assets 1.890 38.687 38.420 27.249 267.661 17.628.484.070) 21.763 20.4 1.182 231.274 55.798) 62.709) (1.569) (171.384 13.154) 28.174 834 24.039 10.505 192.925) 27.412) 168.8 and 8.563.233) (155.709 310.380 178.709 246.990 (189.997 4.220 1.563.220) (1.514 504.771 1.798) 266.803) 1.586) (29.666 191.803) 1.193 11.563.5 12.222 (7.628.092) 1.821 (2.261) (192.2 to 8.626 717 23.627 368.630.923 (46.567 18.663 8.890 (4.037 20.577 (8.346 9.716 205.922 (2.800 188.499 186.992 18.182 8.331 428.755 45.502 (7.544 31. 8.577 28.449) (79.727 834 24.896 The disclosures made in notes 8.070) 2.383 148.827 6.202) (113.380 36.387 (178.463) 26.380 - - (1.305 4.674 9.352) 417.544 11.578 73.173) 192.640 (144.027) (246.749 103 .1 RETIREMENT BENEFITS 4.630.333) (203.712) 18.571.256) (210.473 52.505) (203. LONG TERM DEPOSITS AND PREPAYMENTS 2010 2009 (Rupees in thousand) Security deposits Prepaid rent Others Less: Provision for doubtful deposits 8.7.663) 34.130 395.253) (46.302 (107.11 to 8.709 12.261 163.935) (534.484.666 191.498 31.222 (143.663 717 23.

520. 2011 are Rs.6 Principal actuarial assumptions used are as follows: 2010 Discount rate & expected return on plan assets Future salary increases Future pension increases Medical cost trend rates 14.933.941) Gain / (Loss) on plan assets (as percentage of plan assets) (Gain) / Loss on obligations (as percentage of plan obligations) 8.7 % (1. 131 million (2010: Rs.75% 2009 12. 8.2%) 7.75% 10.691.100 1.7 87.5 % The effects of a 1% movement in the assumed medical cost trend rate are as follows: Increase Decrease (Rupees in thousand) Effect on the aggregate of current service and interest costs Effect on the defined benefit obligations 8.700 1.891.7%) 0.8.877) (482.2%) (1.520.002.522) (50.048.0 31.0 % 9.25% 12.552 897.7 59.0 104 .3 % (0. 148 million).811 21.66% 7.542 2009 Rupees in thousand 147.00% 8.8 6.137 2.192) (142.7 Comparison for five years: 2010 2009 2008 2007 2006 (Rupees in thousand) As at December 31 Fair value of plan assets 1.03)% 9.240 % 11.984.2 % (0.519) 1.966) Experience adjustments 1.38% Expected contributions to retirement benefit plans for the year ending December 31.562 (2.508) (Deficit) (407.315) 1.9 Plan assets comprise of the following: 2010 Rupees in thousand Equity Debt Others (include cash and bank balances) 197.3 100.485.691.60% 6.693) 1.403 18.645 1.310 475.00% 8.797 8.5 100.3%) 0.499 (2.099.562 2.323) (245.034.802.542 Present value of defined benefit obligations (2.8 0.581 (1.804 (2.6% (0.

20. Stores (including in transit Rs.1 The Group has made a provision during the year of Rs.265. STOCK IN TRADE 2010 2009 (Rupees in thousand) 2. 10. Based on the above actuarial valuation the retirement benefits .15 million) Others Provision for slow moving and obsolete stores and spares 169.657 3.595 304.18 million (2009: Rs.457 2. The actuary conducts separate valuations for calculating contribution rates and the Group contributes to the pension and gratuity funds according to the actuary’s advice. STORES AND SPARES 2010 2009 (Rupees in thousand) 8.194 400. 19.305.090 4.174 (91. 868 million) Provision for obsolescence Work in process Finished goods (including in transit Rs.11 8. 181 million) By product .70 million (2009: 48.264.007 1. 45.077 (38.8. 148.927 72. Expense of the defined benefit plans is calculated by the actuary.06 million). 358. 2009: Rs.736 10.77 million) to the provident fund and Rs.8 million (2009 Rs. 2009: Rs.626. Expected yields on fixed interest investments are based on gross redemption yields as at the balance sheet date.829 3.954 11.893 226. 10.10 The expected return on plan assets was determined by considering the expected returns available on the assets underlying the current investment policy.254.825 219.846 1.321.657) 265.79 million (2009: Rs.130 1.070 105 .007) 2.416. Raw and packing materials at cost (including in transit Rs.721 126. 68 million.338 80.05 million) and retirement benefits .420 9.047) 1.13 9.500 1.147) 1.934 (95. 53.26 million) to the DC pension fund.12 8.976 (46.glycerine Provision for obsolescence 1.8 million (2009: Rs.31 million) for obsolescence. 2009: Rs. 2009: Rs. 188.453) 2. 4. During the year the Group contributed Rs.407 3.534.asset amounts to Rs.454 (51.177 (42.839) 357.88 million. 662 million.881.219. 8. 327.liability amounts to Rs.293.49 million. 52.10 million) Spares (including in transit Rs.649.

10.096 (6. 148.51 million (2009: Rs. 3.795 506.87 million) were past due but not impaired.962 5. Considered good Considered doubtful Provision for doubtful debts .79 billion) held with third parties. The above balances include items costing Rs.note 6 Advances to: Executives . 79. 1. 42.149 126.357 43.929 (6. 155.66 billion (2009: Rs.533 9.1 11.71 million (2009: Rs.402) 506.13 million) valued at net realisable value of Rs. LOANS AND ADVANCES Considered good Current portion of loans to employees .016 564.795 42.759 (43. These relate to a number of independent customers for whom there is no recent history of default.699 48.699 6.866 11. 10.05 million) during the year.3 11. 2. TRADE DEBTS 2010 2009 (Rupees in thousand) 522.1 The Group has reversed provision of Rs.04 million) and has written off debts by utilising the provision amounting to Rs. 238. 2010 trade debts of Rs.345 42.68 million (2009: Rs.1 10.06 million for obsolescence (2009: Rs.959 155.230) 126.2 Stock in trade includes Rs.28 million (2009: Rs. 0. 2.311 54.852 106 . The Group made a provision of Rs.811 (42. 1.07 million).016) 522.230 132. 109.note 12.45 million) by utilising the provision during the year.244) 131.2 12.239 24. As of December 31.402 549. 185.216 7. 92. 87.998 12.244 138.419 131.24 million (2009: Rs. The age analysis of these trade debts is as follows: 2010 2009 (Rupees in thousand) Up to 3 months 3 to 6 months More than 6 months 138.note 11.852 6.708 35.435 70.1 Suppliers and others Considered doubtful Advances to suppliers and others Provision for doubtful advances to suppliers and others 48.357 10.46 million (2009: Rs.559 1.19 million) and has written off inventory amounting to Rs.

1 This includes prepayment of Rs. 2009 1.175 204.155 160.95 3 Service conditions Shares 20% Fair value / Share price on grant date Contractual life (years) Vesting conditions Settlement Expected lapse per year Expected outcome of meeting the performance criteria (at the grant date) 2008 2009 by March 20.1 20.661 16. VPIS Shares of Date of grant Total number of shares granted 2008 2009 2008 2009 2008 2009 Unilever PLC March 20.72 £12.532 2. The advances to executives are given to meet business expenses and are settled as and when the expenses are incurred. of their gross variable pay in shares of Unilever PLC or Unilever NV.46 3 Service conditions Shares 20% Unilever NV March 20.539 2. 3.192 151. 2008 March 19. 2011 by March 19.869 243. 2012 107 .826 13. Unilever PLC and Unilever NV will grant matching shares. 2012 by March 20. 2009 1. TRADE DEPOSITS AND SHORT TERM PREPAYMENTS 2010 2009 (Rupees in thousand) Trade and margin deposits Prepayments Rent Others .note 13. 2008 March 19. on the condition that the employee stays with the Group and holds these shares for at least three years. employees eligible as per policy can choose to take between 10% and 25%.479 327.30 ¤13.12.617 18.70 million in respect of shares matched by the Group under the following share-based compensation plan.1 13.136 ¤21. If the employee opts for the shares. or none at all. Variable Pay In Shares (VPIS): Under this plan. 2011 by March 19.195 £16.

644 108 . 131 million) paid by way of abundant caution under the Amnesty Scheme.985 13.934) 82.note 17.511 1.365 620 38. the Group would reimburse the tax.960 32.143 137.315 8.held to maturity This represents investment in Treasury Bills.1 deposits account .394 84.777 44.650 238. 2010 2009 16.355 27 466.012 329. OTHER RECEIVABLES Receivable from related parties Unilever Gratuity Fund Associated undertakings Workers' Profits Participation Fund .1 Others Provision for doubtful receivables 15.note 17.note 23.817 96. to avoid additional Sales Tax and Surcharge being levied in the event of unfavourable decisions of the appeals pending in the High Courts. 17.934) 70. the Group has referred one of the above cases to the Alternate Dispute Resolution Committee.2 In hand: cash (Rupees in thousand) 660.204 300.2010 14. TAX REFUNDS DUE FROM THE GOVERNMENT Sales tax refundable . The contracts with such manufacturers provided that in the event of any liability arising against them on this account. These appeals were filed by third party manufacturers in respect of disallowance of input tax claimed by them on the ground that tax invoices and bills of entry were in the Group’s name.1 Taxation . Without prejudice to the earlier appeals filed. The Group’s management and legal advisors expect a favourable outcome of the appeals.note 15. They carry mark-up at 12.payments less provision Others 15.012 218.15% per annum and will realise latest by March 2011.894 (13. CASH AND BANK BALANCES With banks on: current accounts savings accounts .935 800.052 This includes a sum of Rs.723 30.1 2009 (Rupees in thousand) 9.65% and 13.762.394 137. INVESTMENT . 131 million (2009: Rs. the decision of which is still awaited.013 27 355. owing to the fact that the demands arose as a result of procedural matters and that there was no loss of revenue to the Government. constituted under the Sales Tax law.077 (13.915 744 278.000 1.amounts paid under protest .960 40.

835 4. UK. UK holds 9.735 preference shares).704 4.961 392. The deposit account carries mark-up at the rate of 11.383 400 4. 2009: 9.981.846.95% per annum) and will mature in the year 2011. 2010 2009 (Rupees in thousand) 17.835 4.330 Ordinary shares of Rs.417 ordinary shares and 33. 100 each Shares allotted: for consideration paid in cash for acquisition of an undertaking 43.869 At December 31.783 795. 100 each 4. a wholly owned subsidiary of Unilever PLC.000 15.735 preference shares of Unilever Pakistan Limited (December 31.957 13.000 4.477 7.783 795.783 Ordinary shares of Rs.981. subscribed and paid up capital 5% cumulative preference shares of Rs. 50 each Issued.385 23.385 248.477 248. 2010 Unilever Overseas Holdings Limited.783 4.75 % per annum (2009: 11.2 18.417 ordinary shares and 33.835 5% cumulative preference shares of Rs.383 400 4.293.217 800.348 664.694 669. 109 .348 664.208 for consideration paid in cash for consideration other than cash under schemes of arrangements for amalgamations as bonus shares 23. 50 each Shares allotted: 467.961 392. SHARE CAPITAL Authorised share capital 47.979.1 Mark-up on savings accounts was earned at the rates ranging from 5% to 9% (2009: 1% to 9%) per annum.000 47.904.17.217 800.694 669.

2010 2009 (Rupees in thousand) Balance as at January 1 Transferred to unappropriated profit net of deferred taxation: incremental depreciation for the year Balance as at December 31 12.1.708 93. incremental depreciation arising out of revaluation and deferred taxation. SURPLUS ON REVALUATION OF FIXED ASSETS This represents surplus over book values resulting from the revaluations of property.269.585) 48.626) 85.note 26.471 392.942. LIABILITIES AGAINST ASSETS SUBJECT TO FINANCE LEASES Present value of minimum lease payments Current maturity shown under current liabilities Minimum lease payments Not later than 1 year Later than one year and not later than 5 years Finance charges not yet due Present value of finance lease liabilities 48.662.1 This represents amounts of Rs.1 Contingency .note 19.36 million and Rs.549.762 38.731 59.965 13. (648) 12. 1975.818 85.613 20.317 (648) 12.807 (8.2010 19.181 110 .656 2. 52.1 Revenue reserve Unappropriated profit 2009 (Rupees in thousand) 70.929 321. 18.929 321.400 2.280 (10.877) 19. adjusted only by surplus realised on disposal of revalued assets.099 48. RESERVES Capital reserves Arising under schemes of arrangements for amalgamations .965 21.471 392. plant and equipment carried out in 1973. former Ambrosia International Limited and former Pakistan Industrial Promoters (Private) Limited with the Group.400 2.419) 56.181 (28.695 (28.57 million that arose under schemes of arrangement for amalgamations of former Mehran International (Private) Limited.829 2.056 70.695 45. 1978 and 1981.549 20.229 19.

143) (15.provision for retirement benefits .share-based compensation . DEFERRED TAXATION Credit balance arising in respect of: .provision for restructuring .419 56. Lease payments bearing variable mark-up rates include finance charge at KIBOR + 0.292) (62.076) 636.605) (245.574) (134.445 6.9% per annum.069) (16.130 111 .85% to KIBOR + 1.143 (47.181 The above represents finance leases entered into with modarabas for motor vehicles.962) (36.138) (79.others (71.375 6.762 85.surplus on revaluation of fixed assets 905.761 881.provision for stock in trade and stores and spares .698) 576.818 48. 2010 2009 (Rupees in thousand) 22.877 19.392) (335.841 874.010) (3.163) (18.409) (35.2010 2009 (Rupees in thousand) Present value of finance lease liabilities Not later than 1 year Later than one year and not later than 5 years 28. KIBOR is determined on semi-annual basis for next two quarterly and semi annual rentals. The liability is payable by January 2013 in semi annual and quarterly installments.provision for doubtful debts.accelerated tax depreciation allowances .466 911. advances and other receivables .206 Debit balance arising in respect of: .017) (61.695 28.

2010 2009 (Rupees in thousand) 23.3 112 .note 23.814 264.122 216.999 4.960) 256.793 48.366 23.111) 1.767 363.2 Unclaimed dividend Liability for share-based compensation plans .256.note 23.1 Workers’ Profits Participation Fund Balance as at January 1 Allocation for the year (8.728 247.600.657 17.943 (195.837 1.784 3.657 (55.155 17.787.444 92.note 23.767 291.675.826 53.855 291.307.968 5.852 918.960) Amount paid to the trustees Balance as at December 31 23.903) (8.1 Security deposits from dealers .768 (246.238 20.137 114. Amounts due to related parties included in trade and other payables are as follows: 2010 2009 (Rupees in thousand) Ultimate parent company Associated companies Company in which close family member of a Director is holding directorship 375.525 1.130 15.423 8. TRADE AND OTHER PAYABLES Creditors Bills payable Accrued liabilities Royalty and technical services fee Advance payment from customers Sales tax payable Excise duty payable Workers' Welfare Fund Workers' Profits Participation Fund .346 866.166 27.525 128.2 This represents security deposits obtained by former Pakistan Industrial Promoters (Private) Limited against freezer cabinets placed with dealers.051 357.129 129.571) 242.400 114.235.551 23.372.508 120.852 144.508 33.4 Others 1.072 99.386 1.514 186.

2009 March 18. 2009 March 19.562 ¤ 21. the measurement of the fair value did not consider dividends. 2013 No dividend payments were expected. consequently.72 £ 12. 2010 LPSP Unilever PLC Unilever NV March 20.962 4.46 £19. 2009 March 18.4 Share-based compensation plans As at December 31.27 ¤13.72 £12. 2011 by March 19. 2012 by March 18. 2008 March 20.44 3 Performance and market conditions Shares 20% 1.53 Fair value / Share price on grant date 2008 2009 2010 Contractual life (years) Vesting conditions 3 Performance and market conditions Shares 20% Settlement Expected lapse per year Expected outcome of meeting the performance criteria (at the grant date) Shares 20% 2008 2009 2010 by March 20. 2013 by March 20. 2012 by March 18. 2013 by March 20.649 £ 16.375 7. 2010 share-based compensation plans of the Group include: Global Performance Share Plan (GPSP) and Leadership Performance Share Plan (LPSP): Under the plans. The details of the arrangements are as follows: GPSP Shares of Date of grant 2008 2009 2010 Unilever PLC March 21. Ungeared Free Cash Flow (UFCF) and Total Shareholder Return (TSR) ranking over the three year performance period. 2011 by March 19. employees eligible as per policy can be awarded conditional shares of Unilever PLC or Unilever NV which will vest three years later depending on Unilever’s achievement of set targets for Underlying Sales Growth (USG).190 22. 2012 by March 18.23.375 7. 2010 Total number of shares granted 2008 2009 2010 6.225 1.22 ¤ 22. 2010 March 18.562 £16.225 1. 2011 by March 19. 2008 March 19. 113 .46 £ 19.962 4.44 3 Performance conditions 1.965 6. 2008 March 19.494 9.

2010 2009 (Rupees in thousand) 297.29 billion). 2010 March 21.63 3 Performance and market conditions Shares ¤ 22.1 Short term running finance . 2010 Unilever PLC Unilever NV Unilever PLC March 21.note 24. 6.23.5% per annum). 2010 Fair value / Share price on grant date Fair value / Share price on vesting date Difference of grant date and settlement date fair value Contractual life (years) Vesting conditions £14.04 3 Performance and market conditions Shares Settlement The Group has treated these share-based plans as liability.02 billion (2009: Rs. The rates of mark-up range between KIBOR to KIBOR + 1% per annum (2009: KIBOR + 0.143 300.143 297. The arrangements are secured by way of pari-passu charge against hypothecation of Group's stock in trade. 2007 May 22.911 1.78 billion (2009: Rs.24 ¤ 0.67 billion).1 Details of plan that vested during the year are: GPSP Shares of Date of grant Vesting date LPSP Unilever NV May 22. 2007 March 21. 10.33 ¤ 22.45 £ 4.8 billion (2009: Rs.20 ¤ 22. 4.secured The facilities for running finance available from various banks amount to Rs. 2007 May 22.2% to KIBOR + 1. SHORT TERM BORROWINGS Short term borrowing Short term running finance .911 24.000 737.1 24. The facilities for opening letters of credit and guarantees as at December 31. 114 . 2010 amounted to Rs.4.82 £19. 2010 May 22. 9.28 ¤ 0. 2007 March 21. 10.037.57 3 Performance conditions Shares ¤ 21.95 3 Performance conditions Shares £15.45 £ 3.63 billion). of which the amount remaining unutilised at the year end was Rs. 4.88 £19.

a total of Rs 321. 26.1.265 220. As a matter of prudence.2010 2009 (Rupees in thousand) 25.49 million under protest against the said order. 2006 was declared valid and all imposition and collection before such date as invalid. 2006 has been recognised in the financial statements. The Court further ordered that all bank guarantees / securities furnished for transactions before December 28. PROVISIONS Provision for cess less payments . the Group has paid an amount of Rs.4 million concerning the levy with respect from December 28.000 (53. 373. In 2003 the High Court decided the issue against the Group.680 26.47 million) out of the revenue reserves has been earmarked as contingency reserve for the levy uptill December 2006. the Government of Sindh introduced Cess in place of infrastructure fee with retrospective effect. 115 .47 million as at December 31. 34.1 338.265 90. Against this order an intra court appeal was filed with the High Court.719) (450.415 - 9.1 CONTINGENCIES AND COMMITMENTS Contingencies Government of Sindh through Finance Act.1. The Group as well as the Government of Sindh have filed appeals in the Supreme Court against the said order. 2006 are liable to be encashed. However. whereby the levy imposed and collected with effect from December 28. 1994 levied fee for services rendered in respect of development and maintenance of infrastructure on the import and export of goods. As a result.1 26.218 (25. 2010 (2009: Rs 321. A provision amounting to Rs.934 Provision for marking fee less payment Restructuring Balance as at January 1 Provision during the year Reversal during the year Utilised during the year Balance as at December 31 211.309) 45.234) 9.800 485. Unilever's petition became anfractuous and a fresh suit was filed by Unilever to challenge the levy. 2006 stand discharged and are liable to be returned back and those furnished in respect of transactions after December 28. Moreover. A stay against recovery of the aforesaid levy of Cess was also obtained from the Court.956 397. During the year 2001.910 12. The appeal was disposed of in August 2008. the Group filed a constitutional petition against the levy of such fee in the High Court of Sindh and the Court granted stay for the payment of the fee.note 26.

The appellate order is awaited. 26.26.391 (23.026.816.672) (1. been made in the financial statements. The Group intends to file appeal against this order.2 Aggregate commitments for operating lease rentals as at December 31. 26.298.528.976 230.1 Aggregate commitments outstanding for capital expenditures as at December 31.274.596) (417) 1. 2007 and 2009 passed amended assessment orders enhancing income tax liability by Rs.365 1.66 million). 36. The management of the Group is of the view that the disallowances have been made erroneously and.170) 1. 392.378 (2.2.238.2 The Officer of Inland Revenue (OIR) while finalising the re-assessment for the assessment years 2006.238 (2.845 116 .472. The Group has filed appeals before the Commissioner of Inland Revenue (Appeals) and the same has been heard.95 million (2009: Rs.078. SALES Manufactured goods Gross sales Sales tax Excise duty Imported goods Gross sales Sales tax Excise duty Rebates and allowances 56. 69 million. the ultimate decision in appeal will be in Group’s favour.815) 44.369) (1. 2010 amounted to Rs.084 1.618) 46.436.480 42. No provision has.341 (49.219.582 79. 421 million in respect of certain disallowances.308 (7.933) (2. Subsequent to the year end the OIR amended the assessment for tax year 2008 enhancing tax liability by Rs.485 189.161) 38.593.2.360 147.507 47.239. therefore.187.807.071 (8.2 Commitments 26. therefore.504 310.1. are as follows: 2010 2009 (Rupees in thousand) Not later than one year Over one year to five years 27.271) 39.671.349.

238 19.095) 23.174.240 26. rates and taxes Travelling and entertainment Stationery and office expenses Expenses on information technology Other expenses Charges by related party Recovery of charges from related party 2010 2009 (Rupees in thousand) 25.171 72.1 Staff costs Salaries and wages Medical Pension costs .785.086) 24.027) 29.321 658.631 56.066 73.077.915 5.457) 29.880 (44.242 49.363 102.093 Opening work in process Closing work in process Cost of goods manufactured Opening stock of finished goods including by-product glycerine Closing stock of finished goods including by-product glycerine Imported goods Opening stock Purchases Closing stock 28.813 30.736) 23.096 (2.985 47.000 17.defined contribution plan Pension fund cost .625 1.736 29.264 14.153.273 412.086 1.303 471.558 179.527.28.197 702.820 (5.170 804.450 20.051 18.720 3.815.077.105 674 73.note 28.555 (1.555 685.234 769.019.913 8.401.559 24.1 Utilities Depreciation Repairs and maintenance Rent.defined contribution plan 1.defined benefit plan Pensioners' medical plan Provident fund cost .492 480.705) 635.473 4.240 1.268 10. COST OF SALES Raw and packing materials consumed Manufacturing charges paid to third parties Stores and spares consumed Staff costs .455.733 54.835 35.801 3.210.308 1.633.184 9.466 23.458.518 (66.225 1.316 258.939 58.829 (72.710 877.852.529 141.412 44.593.776 3.764 208.303 117 .124) 29.321) 833.398 686.defined benefit plan Gratuity costs .094.059 (1.414.632 1.887.210.907 (126.159 5.236.913 2.619 1.019.236.318 3.

808 19.325 54.561 726.933 733.804 1.defined benefit plan Pensioners' medical plan Provident fund cost .706 28.defined benefit plan Gratuity costs .944 4.1 Advertisement and sales promotion Outward freight and handling Royalty and technical fee Utilities Depreciation Repairs and maintenance Rent.272 67 27. DISTRIBUTION COSTS Staff costs .361 93.625 47.659) 7.727 70.838 1.212 1.694 118 .203 30.998 20.293 733.499 40.614 1.033.555 3.444 127.048 63.865 30.108 7.defined contribution plan 587.600 (98.944 619.293 3.045 168.301 1.741 22.defined contribution plan Pension fund cost .179.2010 2009 (Rupees in thousand) 29.860 726. professional and other consultancy charges Other expenses Charges by related party Recovery of charges from related party 29.138) 8.026 4.563 14.214 11.159 986.603 55.907 32.463 27. rates and taxes Amortisation of computer software Travelling and entertainment Stationery and office expenses Expenses on information technology Legal.819.053 55.278.629 7.564.072 62.039.note 29.400 1.292.553 48.575 2.1 Staff costs Salaries and wages Medical Share based compensation Pension costs .098 21.047 (100.114 17 20.

2 Other expenses Charges by related party Recovery of charges from related party 396.859 56.457 (17. audit of consolidated financial statements.defined contribution plan Pension fund cost .030.245 13.804 4.401 3.974 11.881 218.1 Staff costs Salaries and wages Medical Share based compensation Pension costs .912 8.defined benefit plan Gratuity costs .note 30. provident and gratuity funds.801 10.143 30.752 159.984 28.1 Utilities Depreciation Repairs and maintenance Rent.022 24.528 30.322 2.408) 1.136 7.347 16.068 8.675 233.739 12.899 25.729 230.768 57.609 30.304 396.892 62.985 349.179 43.072 91.750 5. rates and taxes Amortisation of computer software Travelling and entertainment Stationery and office expenses Expenses on information technology Legal.437 69.2010 2009 (Rupees in thousand) 30. professional and other consultancy charges Auditors' remuneration .609 33. ADMINISTRATIVE EXPENSES Staff costs .219.005 13.333 1.note 30.068 450 12.771 (20.545 94.780 3.defined benefit plan Pensioners' medical plan Provident fund cost .390 13.2 Auditors' remuneration Audit fee Taxation services Limited review.536 13.826 4. pension.847 37. third party expense verifications and certifications for various government agencies Out of pocket expenses 3.993 178.339 12.959 71.768 119 .914 31.defined contribution plan 300.309) 1.139 11.506 349.500 4.545 3.675 36.950 3.119 696 12.

543 388.051 30.054 40.638 120 .623 37. Cotton Exchange Building. Annual Giving Committee. plant and equipment Sundries Others Service fee from related parties . plant and equipment 2010 2009 (Rupees in thousand) 33.31.1 Donations Donations include the following in whom a director is interested: Name of Director Interest in Donee 1.126 2. Karachi.514 92. Lahore - 2.note 32.780 256. OTHER OPERATING EXPENSES Donations .101 12 16.161 Corporate Member President-Emeritus 32.719 37.236 400 140.420 2.236 10.192 15.Chundrigar Road.073 3.1 Workers' Welfare Fund Loss on disposal of property.155 8.note 23.097 209.000 - Trustee Chairman. OTHER OPERATING INCOME 15 150 Income from financial assets Dividend income Return on savings accounts and deposit accounts Return on investment .I. Lahore World Wide Fund for Nature.728 97. The Duke of Edinburgh Awards Pakistan Aga Khan University 2010 2009 (Rupees in thousand) 100 80 1.785 31.036 25. and Member.901 373.note 31.1 Workers' Profits Participation Fund . Resource Development.614 36.797 24.714 22.1 Provision for doubtful trade debts written back Provision no longer required written back Liabilities no longer payable written back 12 10. Member.note 16 Income from non-financial assets Scrap sales Profit on disposal of property. Ferozepur Road. Board Member Pro-Chancellor 25 - Lahore University of Management Sciences DHA. I. Health Science Committee. Malik Member Name and address of Donee AIESEC in Pakistan 201. Ehsan A.held to maturity .215 242. 2nd Floor.422 66.

657 229.009 29.586.631 (54.532. TAXATION Current .709 1.465.195 155.1 Relationship between tax expense and accounting profit 132.176.820 1.for the year Pakistan Azad Kashmir Deferred tax .828 6.945) 1.361 1.199. FINANCE COST Mark-up on short term borrowings Bank charges Exchange loss Finance charge on finance leases Others 34.437 189. 2010 2009 (Rupees in thousand) 33.572.477 1.987) 1.444 13.976) (117.503 22.512. in accordance with the Service Agreement between the two companies.542.474 587 427.077 23.512.651 1.438 266.086 11.(credit) / charge 34.807 (59.508 (648) - (119.915 121 .32.398 30.Unilever Pakistan Foods Limited.879 1.796.631 23.678.663) 1.915 Accounting profit before tax Tax at the applicable tax rate of 35% Tax effect of permanent differences Tax effect of credits Tax effect of final tax Tax expense for the year 4.820 4.1 This includes amount charged by the Group for certain management and other services rendered to its related party .409 1.465.

294 231 (297. Segment results and assets include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.066.running finance under mark-up arrangements 1.964 (239) 3.143) 1. SEGMENT INFORMATION A business segment is a group of assets and operations engaged in providing products that are subject to risks and returns that are different from those of other business segments. the Group is organised into the following four operating segments: Home and Personal Care Beverages . 122 .283.294 247 13.2010 2009 (Rupees in thousand) 35. Management has determined the operating segments based on the information that is presented to the Chief Executive Officer of the Group for allocation of resources and assessment of performance. CASH AND CASH EQUIVALENTS Cash and bank balances Short term borrowings .762.725 13.911) (759.644 3.037.267) 37. 2010 2009 (Rupees in thousand) 36.066.831 (239) 3. EARNINGS PER SHARE Profit after tax Preference dividend on cumulative preference shares Profit after taxation attributable to ordinary shareholders Weighted average number of shares in issue during the year (in thousands) Earnings per share (Rupees) There is no dilutive effect on the basic earnings per share of the Group.465.tea Ice Cream Spreads Management monitors the operating results of abovementioned segments separately for the purpose of making decisions about resources to be allocated and of assessing performance.507 (1.283. Based on internal management reporting structure and products produced and sold.650 278.592 3.

Further. 2010 is as follows: Home and Personal Care Year ended December 31. long term deposits and prepayments. 2009 Revenue Segment results 21.657) 4.736 (90.942. long term loans and advances.784 142.926 659.694.735 (373.638 (427.647 2.124.725 113.879 Beverages Ice Cream Spreads Total (Rupees in thousand) Segment assets Segment liabilities 4.326 127. unallocated assets include long term investments. trade deposits and short term prepayments.286 960.060.582 5.076 11.323.856 187.883 5.138 267.294. other operating income and expenses. and taxation are managed at Group level.124.017.1 Segment analysis The segment information for the reportable segments for the year ended December 31.263 1.801 3.722.183 4.735 Reconciliation of segment results with profit from operations: 2010 2009 (Rupees in thousand) Total results for reportable segments Restructuring costs Other operating expenses Other operating income Finance cost Profit before tax Information on assets and liabilities by segment is as follows: Home and Personal Care As at December 31.555.718 276.818 As at December 31.128.197 509. 2009 Segment assets Segment liabilities 3.548.849 5.277.350 123 .315 3.472 3. accrued interest. 2010 Beverages Ice Cream Spreads Total (Rupees in thousand) Revenue Segment results 24.796.844 38.102 1.440.495 3.133 537. 37.941 44.651 5.576 9.623 (189.124 128.671.507 5.525 835.390.736 Year ended December 31.323.000) (388.840.979.212.810 13.632 939.532.331 10.122.478 3.162. restructuring cost.709) 4.022.136.051) 140.917 2. 2010 5.195.225 3.165. other receivables.024 269.814 4. loans and advances. tax refunds due from government and cash and bank balances.785) 209.187.272.Finance cost.

60%) of the revenue during the year.432 2.028 212. 2010 Staff costs Advertisement and sales promotion Outward freight and handling Royalty and technical fee Depreciation Year ended December 31.593 287.843 295.521 599.819.881 762. 2010 Assets As at December 31.463 776.564.071 8.685 44.083.787 20.3 124 .039.214 553.278.185 13. 37.818 4.614 1.836 2.629.349.708 910.159 986.184 9.205 3.573 181.611.036 44.Reconciliation of segments' assets and liabilities with totals in the balance sheet is as follows: As at December 31.867 1.760 601.238 39.311 145.849 2.572.092 Total for reportable segments Unallocated assets / liabilities Total as per balance sheet 10.208 728.366 9.292.765 189.273 2.717 279.804 1.838 1.873 341.153.122.052 10.495 2.367.421 Other segment information is as follows: Home and Personal Care Year ended December 31.112 32.932 31.034 3.834 156.449 163.615 478.127.180 2.472.294.597 11.7% (2009: 2.691 666.026 31.894 228.930.40%) and to customers outside Pakistan are 1. 2009 Staff costs Advertisement and sales promotion Outward freight and handling Royalty and technical fee Depreciation 1.2 Sales to domestic customers in Pakistan are 98.771.533 211.174 4.064 371.718 135.821 487.864 402.635. 2009 Liabilities Liabilities Assets (Rupees in thousand) 5.350 4.254 470.554.3% (2009: 97.006 Beverages Ice Cream (Rupees in thousand) Spreads Total 37.257 9.925 25.135.237 555. The Group's customer base is diverse with no single customer accounting for more than 10% of net revenues.108 496.942.555.

Ultimate parent company Royalty and technical fee Associated companies Purchase of goods Sale of goods Fee for receiving of services from related party Payment to related parties for intangible asset Reimbursement of expenses to related party Recovery of expenses from related party Fee for providing of services to related party Contribution to : -Defined Contribution plans -Defined Benefit plans Settlement on behalf of : -Defined Contribution plans -Defined Benefit plans Purchase of operating assets iii.063 37.195 91.473 2.214 1.486 Royalty and technical fee are paid in accordance with the agreements duly acknowledged by the State Bank of Pakistan. RELATED PARTY TRANSACTIONS The following transactions were carried out with related parties during the year: Relationship with the Company i.078 1. The Group has entered into agreements with its associate.161 10.502 8.731 435.734 7.292. The charges by and recovery of costs from the associate have been disclosed in notes 28.755 679.326. Other transactions with related parties are settled in the ordinary course of business.329 99.553 7. Others Donations 245.605 31.467 126. 125 .165 1.573 36.420 62.564.943 1.108 Nature of transactions 2010 2009 (Rupees in thousand) 101.302 122.495 68.38.324 61.205 610 1.073 121. ii.983 189. Unilever Pakistan Foods Limited to share various administrative and other resources.034 428.041 1.140 101.690 37 2. Key management personnel Salaries and other short-term employee benefits Post-employment benefits Consideration received for vehicles sold iv. 29 and 30.877.

830 19.122 572.005 325 In addition to this.548 6.411 64.535 115 2. chief executive and executives of the Group are as follows: Executive Directors 2010 2009 Chief Executive 2010 2009 Executives 2010 2009 (Rupees in thousand) Managerial remuneration and allowances Share based compensation Retirement benefits * Rent and utilities Medical expenses Other expenses Number of persons 28.1 and 23.830 4.470 27.031 4 24.135 45.138 142. 251.612 12. 39. chief executive and certain executives of the Group are provided with free use of cars and household equipments.550 7.511 7.958 1. a lump sum amount of Rs.544 311 41. CHIEF EXECUTIVE AND EXECUTIVES The aggregate amounts charged in the financial statements of the year for remuneration including all benefits to directors.857 3.343 5 14.334 810 174 2.102 10.827 84.122 1.106 27.694 379 44.710 2. REMUNERATION OF DIRECTORS. Arrangements with parent company and an associated company for granting of their shares to employees of Unilever Pakistan Limited are disclosed in notes 13.874 3. Out of the variable pay recognised for 2009 and 2008 following payments were made: Paid in 2010 Paid in 2009 relating to relating to 2009 2008 (Rupees in thousand) Executive Directors Chief Executive Executives Other employees 15.206 1 600.4. The executive directors.885 191.419 550 362. 246.801 118.554 9.770 40.925 5.459 92.433 93.14 million) on account of variable pay has been accounted for in the financial statements for the current year payable in 2011 after verification of target achievement.418 11.628 1 13.797 157. 126 .942 1.510 809. 2010 is included in other receivables and trade and other payables respectively.017 * Retirement benefits represent amount contributed towards various retirement benefit plans.295 million (2009: Rs.757 8.006 9.652 6.967 11.The related party status of outstanding balances as at December 31.

Aggregate amount charged in these financial statements for the year for fee to 2 non-executive directors was Rs. 270 thousand (2009: 2 non-executive directors Rs. 300 thousand). 40. CAPACITY
Annual Capacity 2010 2009 Actual Production 2010 Metric Tons 2009

Own manufacture Home and Personal Care Beverages

60,385 62,377

58,883 58,587

51,429 33,861 Million Litres

46,299 34,240

Ice Cream

77

77

49

37

Annual capacity of Beverages and Home and Personal Care was increased in lieu of higher anticipated sales in future. The current capacity was under utilised on account of lower demand. 41. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

41.1 Financial risk factors The Group's activities expose it to variety of financial risks: market risk (including currency risk and interest rate risk), credit risk and liquidity risk. The Group's overall risk management programme focuses on having cost effective funding as well as manage financial risk to minimise earnings volatility and provide maximum return to shareholders.

127

41.2 Financial assets and liabilities by category and their respective maturities
Interest bearing Maturity up Maturity Sub-total to one after one year year FINANCIAL ASSETS Loans and receivables Loans and advances to employees Accrued interest / mark up 35 Deposits Trade debts Other receivables Cash and bank balances 1,100,935 Investment - held to maturity Long term investments at cost December 31, 2010 December 31, 2009 FINANCIAL LIABILITIES At amortised cost Trade and other payables Accrued interest / mark up Liabilities against assets subject to finance leases Short term borrowings December 31, 2010 December 31, 2009 ON BALANCE SHEET GAP December 31, 2010 December 31, 2009 OFF BALANCE SHEET ITEMS Letters of credit / guarantees December 31, 2009 1,781,822 334,600 918,304 (924,606) (19,818) (56,762) 898,486 (981,368) (6,213,742) (4,365,201) 85,989 100,019 (6,127,753) (4,265,182) (5,229,267) (5,246,550) 28,877 297,143 326,020 1,066,330 19,818 19,818 56,762 48,695 297,143 345,838 1,123,092 7,521,956 16,184 7,538,140 5,249,137 7,521,956 16,184 7,538,140 5,249,137 7,521,956 16,184 48,695 297,143 7,883,978 6,372,229 143, 354 1,244,324 141,724 35 1,100,935 143, 354 1,244,324 141,724 48,311 20, 617 522,795 70,960 661,715 1,324,398 883,936 83,887 1,902 200 85,989 100,019 132,198 22,519 522,795 70,960 661,715 200 1,410,387 983,955 132,198 35 22,519 522,795 70,960 1,762,650 143,354 200 2,654,711 1,125,679 Non-interest bearing Maturity up Maturity Sub-total to one after one year year (Rupees in thousand) Total

The carrying values of all financial assets and liabilities reflected in the financial statements approximate their fair values. (i) Credit risk Credit risk represents the accounting loss that would be recognised at the reporting date if counter parties failed to perform as contracted. The maximum exposure to credit risk is equal to the carrying amount of financial assets. Out of the total financial assets of Rs. 2.66 billion the financial assets that are subject to credit risk amounted to Rs. 522.8 million. For trade debts, internal risk assessment process determines the credit quality of the customers, taking into account their financial positions, past experiences and other factors. Individual risk limits are set based on internal or external credit worthiness ratings in accordance with limits set by the management. As of December 31, 2010 trade debts of Rs. 155.71 million were past due but not impaired. The carrying amount of trade debts relates to a number of independent customers for whom there is no recent history of default.

128

Deposits have been placed mainly against shipping guarantees and letters of credit hence exposed to no significant credit risk. Loans and advances to employees are not exposed to any material credit risk since these are secured against their retirement benefits. Other receivables constitute mainly receivables from the related parties, therefore, are not exposed to any significant credit risk. The bank balances represent low credit risk as they are placed with banks having good credit ratings assigned by credit rating agencies. The management does not expect any losses from non-performance by these counterparties. (ii) Liquidity risk Liquidity risk reflects the Group's inability in raising funds to meet commitments. The Group manages liquidity risk by maintaining sufficient cash and bank balances and the availability of financing through banking arrangements. (iii) (a) Market risk Foreign exchange risk Foreign exchange risk arises mainly where receivables and payables exist in foreign currency. As at December 31, 2010, financial assets of Rs. 30.78 million (2009: Rs. 13.32 million) and financial liabilities of Rs. 2.34 billion (2009: Rs. 1.20 billion) were in foreign currency which were exposed to foreign currency risk. As at December 31, 2010, if the Pakistan Rupee had weakened / strengthened by 8% against US Dollar with all other variables held constant, profit before tax for the year would have been lower / higher by Rs. 11.39 million (2009: Rs. 3.46 million), mainly as a result of foreign exchange losses / gains on translation of US Dollar denominated financial assets and liabilities. As at December 31, 2010, if the Pakistan Rupee had weakened / strengthened by 11% against Euro with all other variables held constant, profit before tax for the year would have been lower / higher by Rs. 242.64 million (2009: Rs. 119.72million), mainly as a result of foreign exchange losses / gains on translation of Euro denominated financial assets and liabilities. The sensitivity of foreign exchange rate looks at the outstanding foreign exchange balances of the Group only as at the balance sheet date and assumes this is the position for a full twelve-month period. The volatility percentages for movement in foreign exchange rates have been used due to the fact that historically (5 years) rates have moved on average basis by the mentioned percentages per annum.

129

22. CAPITAL RISK MANAGEMENT The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern in order to provide returns for shareholders and benefit for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. Borrowings obtained at variable rates expose the Group to cash flow interest rate risk.706 4. 345. 2010 and 2009 were as follows: 2010 2009 (Rupees in thousand) Total borrowings Cash and bank Net (surplus cash) / debt Total equity Total equity and debt Net debt to equity ratio 345.838 (1.12 billion). mainly as a result of higher / lower interest expense on floating rate borrowings.812) 3.46 million) lower / higher.331. 2010. At December 31.416. 130 .644) 844.(b) Interest rate risk The Group’s interest rate risk arises from borrowings as the Group has no significant variable interest-bearing assets.611.913 million (2009: Rs.176. profit before tax for the year would have been approximately Rs. 6.448 3.092 (278. The net debt to equity ratios as at December 31. the Group had variable interest bearing financial liabilities of Rs. During 2010 the Group's strategy was to maintain leveraged gearing.123. borrowings and management of working capital with a view to maintaining an appropriate mix between various sources of finance.533 1. 42. 1.650) (1.762.84 million (2009: Rs.154 20% The Group finances its operations through equity.611.533 3. and had the interest rate varied by 200 basis points with all the other variables held constant.

Executive Mr. is of the view that the agreement between the Group and DFL is not in violation of Monopolies and Restrictive Trade Practices Ordinance 1970. PLANT AND EQUIPMENT DISPOSALS The details of property.129 80.130 126 7.Executive Mr.288 30.359 48. the management.43.816 179 236 236 118 153 127 1. based on legal advice.Executive Mr. DETAILS OF PROPERTY.288 23.229 23. Adil Tahir . 250 million to Dalda Foods (Private) Limited (DFL) within fifteen days of receipt of the Order.183 88.283 230 395 395 259 256 281 1. 131 . plant and equipment disposed of during the year are given below: Cost Accumulated Depreciation / Impairment Book Value Sale Proceeds Mode of Disposal Particulars of Purchaser (Rupees in thousand) Motor Vehicles 409 631 631 377 409 408 2.865 Assets having book value less than Rs. The Group filed an appeal in the High Court of Sindh against the Order which was admitted and the operation of MCA's order was stayed. terminating the non-competition agreement and requiring the Group to refund the amount of Rs.Executive Mr.897 6. Zunair Hussain Khan .385 139 6. Talha Tariq .020 Company policy " " " " " Mr. Haseeb Siddiqui . 2006.739 32. the appeal is pending for hearing.Executive 44.049 302 450 466 240 286 276 2. MONOPOLY CONTROL AUTHORITY ORDER With respect to the Monopoly Control Authority (MCA) Order dated December 19.Executive Mr. At present. 50. Ahsan Saleem .023 6. Amin Khalique .054 8.000 each Motor vehicles Electrical and mechanical Plant and Machinery 49.

22 billion). The aforesaid reclassification has not had any impact on the figures of total assets or net assets as of December 31. DATE OF AUTHORISATION These financial statements were authorised for issue on February 14. the Group has not presented the balance sheet as at the beginning of the earliest comparative period presented (i. 2011 by the Board of Directors of the Group.82 billion). Reclassification from Trade deposits and short term prepayments Reclassification to Rupees in thousand Intangible asset under development 355. Ehsan A.45. 1. CORRESPONDING FIGURES The following prior year figure has been reclassified for the purpose of appropriate presentation. These financial statements do not reflect the proposed final dividend on ordinary shares and the dividend declared on cumulative preference shares as payable.274 million. 2008. 2011. 1. 1. 2009) and the related notes have also not been presented as of the beginning of that earliest period presented. The related figure for reclassification in 2008 is Rs 141. December 31. 239 thousand has been declared (2009: Rs.09 billion is proposed (2009: Rs. 92 per share amounting to a total dividend of Rs. 47. 2.e. 89 per share amounting to a total dividend of Rs. PROPOSED AND DECLARED DIVIDENDS On 5% cumulative preference shares At the Board meeting held on February 14. On ordinary shares At the Board meeting held on February 14.18 billion (2009: Rs. 157 per share amounting to a total dividend of Rs. therefore. 239 thousand). 46. Malik Chairman & Chief Executive Imran Husain Director & Chief Financial Officer 132 . 2008 and 2009. dividend in respect of 2010 of Rs. 2011. a final dividend in respect of 2010 of Rs. which will be accounted for in the statements of changes in equity as an appropriation from the unappropriated profit in the year ending December 31. The interim dividend declared and already paid in respect of 2010 was Rs. 137 per share amounting to a total dividend of Rs. 2011.123 As the reclassification is considered not to be material in the overall context of the balance sheet and does not have any significant impact on the financial statements for the year ended December 31.

(Signature should agree with the specimen signature registered with the Company) Witness 1: Signature Name CNIC # Signature of Member(s) Witness 2: Shareholder’s Folio No. 5/. _________________________ CNIC # Note: Sign across Rs.________________________ Signature and / or CDC Participant I. The Member is requested: (a) to affix Revenue Stamp of Rs. No. this Proxy must be received at the Registered Office of the Company at least 48 hours before the time fixed for the Meeting.________________ Name and Sub . (holding __________ ordinary / preference shares in the Company under Folio No. 2. son / daughter / wife of ______________________.D. holding ___________ordinary / preference shares hereby appoint _____________________who is my ______________ [state relationship (if any) with the proxy. (b) to sign across the Revenue Stamp in the same style of signature as is registered with the Company. to attend and vote for me / us and on my / our behalf at the Annual General Meeting of the Company to be held on March 29. (c) to write down his Folio Number. shareholder of Unilever Pakistan Limited. duly completed in all respects.Form of Proxy The Secretary Unilever Pakistan Limited Avari Plaza.at the place indicated above. Signed this __________ day of _________ 2011. I / We ________________________________.Account No. required by Government regulations] and the son / daughter / wife of __________________________. 2011 and / or any adjournment thereof. 5/Revenue Stamp 1. In order to be valid. Pakistan. . delete if proxy is not the Company’s shareholders] as my / our proxy. 3. Detailed procedure is given in the notes to the Notice of AGM. CDC Shareholders or their proxies should bring their original Computerised National Identity Card or original Passport along with the Participant’s ID Number and their Account Number to facilitate their identification. _______) [required by Government. Fatima Jinnah Road Karachi-75530.

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