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AkzoNobel ICI Annual Report 2010 Tcm102-58712

AkzoNobel ICI Annual Report 2010 Tcm102-58712

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Mission / Vision CE Statement Code of Conduct & values Company information About AkzoNobel Financial highlights Our Directors Report of the Directors Statement of Compliance Review report Management committees Corporate Governance & Compliance Awards & achievements / Calendar of major events Technology developments Community investment

02 03 04 05 06 08 14 16 24 25 26 28 34 35 36

Health, Safety, Environment & Security (HSE&S) Our Talent Factory Overview of our Businesses Paints Polyester Soda Ash Chemicals Life Sciences ICI Pakistan Financial Statements ICI Pakistan Consolidated Financial Statements Notice of meeting Admission slip Form of proxy Sustainability Report

40 42

44 56 60 64 68 75 125 165

44
Adding color to people’s lives; Harnessing the power of our palette

56
Going green; Achieving more by consuming less through innovative technology

60
Decades of development; Bringing about change through sustainable involvement

64
A vital part of everyday life; Providing a spectrum of products that are trusted by customers

68
Putting down roots; Breaking new ground with local seed production technology

Grounds for excitement
What excites us is asking the unasked question. And what drives us is knowing that what is good for our customers today is not necessarily good enough for them tomorrow. Our focus is to become bigger and better than ever, and to continue to touch the lives of our customers as we have for the past sixty-seven years. 2010 has been an eventful year, a year of many firsts, and also of unexpected challenges. We thrive on tackling these challenges every day, and finding new answers to questions before they are even asked. These are the reasons we come to work every day. These are our 'Grounds for excitement'.

Key Performance Indicators
Statement of income NSI in Rs. million 2009 28,430 2010 35,130 Operating result in Rs. million 2009 2010 Profit before tax in Rs. million 2009 2010 Profit after tax in Rs. million 2009 2010 EBITDA in Rs. million 2009 2010 EBITDA margin % of NSI 2009 2010 Ratios Equity in Rs. million 2009 2010

+24% +23% +21% +19% +19% -3%

13,483 14,548

+8% -71% +16% +25% +152% +22%

Operating working capital turnover 3,028 3,713 2009 2010 121 35

3,073 3,732

Return on capital employed in % 2009 19.4 2010 22.4 Return on fixed assets % of revenue 2009 32.8 2010 40.9 Dividend yield* in % 2009 2010

2,045 2,429

3,899 4,657

4.8 12.1

13.7 13.3

Operating result per employee in Rs. million 2009 2.3 2010 2.8

Dividend and earnings per share Earnings per share in Rs. 2009 14.73 2010 17.50 Dividend per share (proposed) in Rs. 2009 8.00 2010 17.50

+19%

Cash flows Net cash from operating activities in Rs. million 2009 4,476 2010 2,334 Capital expenditures in Rs. million 2009 826 2010 854

-48% +3%

+119%

* Based on year end market value

ICI Pakistan Limited Annual Report 2010 | Key Performance Indicators | 01

ensuring sustained leadership positions in the markets where we compete. This ambition defines us. consistent quality. We believe the future belongs to those smart enough to challenge it. environment and ethical matters • Ensure our products deliver maximum value to customers by maintaining dependable supply. We believe that real progress belongs to those who not only think with courage.Our Vision Tomorrow’s Answers Today Often people achieve only incremental progress. Tomorrow’s answers. This is the way we work. and reliability • Uphold excellent service levels to foster long-term relationships with customers and suppliers • Achieve the highest possible operating efficiencies and lowest costs. safety. What inspires us is seeing the opportunity others cannot. but also have the courage to deliver on the thought. innovation. What excites us is asking the unasked question. ethics and responsible care. delivered today. Our Mission To be the partner of first choice for customers and suppliers. This is why we come to work. What unites us is the intelligence to deliver where others have not. delivering long-term business value through a high performance culture. What drives us is knowing that what is good for our customers today is not necessarily good enough for them tomorrow. Strategic Thrust To achieve our mission we will: • Give highest priority to health. because their view of tomorrow is determined by what they see today. and expand the business through selective capacity increase and new product launches • Develop and retain a team of highly capable people dedicated to delivering the mission . This benefits our customers because we sustain their future competitiveness and meet the consumers’ unspoken needs.

we progressed further on our journey of sustainability and established a sustainability integration paradigm for the company. The journey has been long and the road tough but what has held us together is a consistent focus on delivering customer value and a solid commitment from our people in doing so. Warm regards. However. We conducted a comprehensive stakeholder engagement program. Creating an engaged workforce is a key focus area for us and we have stepped up our employee engagement programs to create a culture of cooperation and co-creation. We know that there are challenges ahead. feedback from which became the stepping stone for our way forward. We also realize that there are areas where we need to focus more. More details of our sustainability strategy and performance are given in the Sustainability section of this report. we shall stride forward to further integrate sustainability within the organization. on this wonderful journey. Costs and Cash”. Waqar A Malik ICI Pakistan Limited Annual Report 2010 | CE Statement | 03 . At ICI Pakistan. Our financial performance and top line growth is an evidence of the resilience of our footing and solidity of our portfolio. Our safety records have been excellent over the years. 2010 was a tough year with continuation of the energy crisis and a heightened security situation. Paints securing the first top coat order. Starting as a soda ash manufacturing concern tucked in the salt ranges of Punjab in 1944. I wish you the very best. Chemicals introducing Dissolvine and Life Sciences launching its own products in various segments. and we shall continue to vigorously focus on behavior based safety programs. In 2011. With the close of 2010. ICI Pakistan is now a leading manufacturing company of Pakistan with a range of products that practically touch all lives in the country everyday. This was a year of many firsts with our Polyester Business hitting new production records. Dear Stakeholders. and continue to do so. organizing a countrywide flood relief program that provided over 1 million meals and urgent medical assistance to affectees across the country. We set Key Performance Indicators and have now aligned business and functional priorities accordingly. hope and resilience. our ability to quickly adapt to the changing circumstances was crucial and we carefully rebounded as the year came to an end. I am proud to say that the company and its employees took the task to heart and immediately responded to the challenge. Soda Ash exploring new export markets and establishing itself as a regional player. In 2010.Statement from our Chief Executive Our rigorous efforts to maintain our competitiveness were underpinned by a strict focus on operational effectiveness. We can look ahead to 2011 with confidence. Over 20 million people lost their homes and livelihoods. I would like to express gratitude to all stakeholders who have helped us. The magnitude of the disaster demanded a swift and effective response. the toughest challenge came in the form of floods that hit the country in the second half of the year turning into one of the worst national disasters in the history of our nation. specifically concentrated on “Customers. we have a history of serving the nation's needs and I am proud to be leading this great company at such an exciting period where despite tremendous challenges we continue to grow and serve better. I would particularly like to thank all my colleagues who are helping lead us into a future of many possibilities. crops and cattle were destroyed while infrastructural damages were colossal. However. but we also know that we have the right resources to meet those challenges. Business conditions were difficult throughout the year particularly after the floods. we complete 67 years of existence as a company.

safe and secure environment • ensure the rights of employees to join unions/ associations • protect personal data of employees • engage in an active performance and development dialog Employee responsibilities The Code provides employees guidance on their responsibilities vis a vis: • Media relations and disclosures • Inside information • Corporate identity • Protecting our intellectual property • Internet use • Business travel policy • Prohibition on substance abuse Our values • Focusing on our customer’s future first • Embracing entrepreneurial thinking • Developing the talents of our people • The courage and curiosity to question • Integrity and responsibility in our actions 04 | Code of Conduct & values | ICI Pakistan Limited Annual Report 2010 . Our business principles and ethical standards are enshrined in the ICI Pakistan Code of Conduct. comply with and observe applicable laws. we encourage participation in community activities and take all measures for the safety and health of our employees as well as for the protection of the environment • Employees are expected to maintain confidentiality and to act in the Company’s interests at all times Company responsibilities The Code encourages us to: • adopt the spirit of open communication • provide equal opportunities and a healthy. support fundamental human rights and give due regard to health. safety and environment Business integrity • Bribery and any other form of unethical business practices are prohibited • We promote free enterprise and require strict compliance with competition laws • As responsible corporate citizens. A brief overview of the code: Business principles • Each employee should implement our core values.Code of Conduct & values We have always had a strong sense of business principles and high ethical standards for the conduct of our business.

Chartered Accountants Shares Registrar FAMCO Associates (Pvt) Ltd.com Suhail Aslam Khan M Asif Malik Feroz Rizvi Remuneration sub committee M Nawaz Tiwana Chairman Non-Executive James R Rees Non-Executive Vice President. Soda Ash Business Khalid Alvi Vice President. Karachi-74000 Tel : (021) 32427012.com/pk Email: ccpapakistan@akzonobel. 5 West Wharf. Paints Business Jehanzeb Khan Bankers Askari Bank Limited Bank Al Habib Limited Bank Alfalah Limited Citibank N. 32426597. Deutsche Bank AG Faysal Bank Limited Habib Bank Limited HSBC Bank Middle East Limited Habib Metropolitan Bank Limited Auditors Internal auditors Ernst & Young Ford Rhodes Sidat Hyder.Company information Board of Directors M J Jaffer Waqar A Malik Mueen Afzal * Ali A Aga Bart Kaster Chairman Non-Executive Chief Executive Non-Executive Executive Non-Executive James R Rees Feroz Rizvi Rogier M G Roelen M Nawaz Tiwana Derek W Welch Non-Executive Executive Non-Executive Non-Executive Non-Executive Audit & Remuneration Sub Commitees of the Board Audit sub committee M J Jaffer Chairman Non-Executive Mueen Afzal Non-Executive Bart Kaster Non-Executive Chief Financial Officer Feroz Rizvi Company Secretary Saira Nishtar Executive Management Team Chief Executive Waqar A Malik Ali A Aga * Vice President. Polyester Business Vice President. 32425467 Fax : (021) 32426752 * names in alphabetical order ICI Pakistan Limited Annual Report 2010 | Company information | 05 . Karachi-74000 Tel # 111-100-200. Chemicals Business Vice President.I Chundrigar Road. (021) 32313717-22 Fax # 32311739 Website: www.akzonobel. I. : 32475606.. 32420755. Chartered Accountants Registered office ICI House.A. 1st Floor. State Life Building 1-A. Corporate HR & Life Sciences Chief Financial Officer MCB Bank Limited Meezan Bank Limited National Bank of Pakistan Oman International Bank Samba Bank Limited Standard Chartered Bank (Pakistan) Limited United Bank Limited External auditors KPMG Taseer Hadi & Co.

the Netherlands. AkzoNobel is a Global Fortune 500 company consistently ranked as one of the leaders on the Dow Jones Sustainability Index. AkzoNobel is the largest global paints and coatings company and a major producer of specialty chemicals. AkzoNobel supplies industries and consumers worldwide with innovative products. Headquartered in Amsterdam. 2008. The company’s products can be found everywhere from the Beijing Olympic arenas and Sydney Harbor Bridge to. International® and Eka®. quite possibly. Looking closer. Its portfolio includes well known brands such as Dulux®. We are proud to be part of a group that is committed to innovation. the house next door to you. ICI Pakistan was acquired by AkzoNobel on January 2. Sikkens®. seeing further 06 | About AkzoNobel | ICI Pakistan Limited Annual Report 2010 . and is passionate about developing sustainable answers for its customers. it has 55. With operations in more than 80 countries.000 people around the world committed to excellence and delivering ‘Tomorrow’s Answers Today™.About AkzoNobel Look around you and chances are you'll see AkzoNobel's influence.

Every color on offer is matched to Toyota’s master plates to ensure the best possible match. when AkzoNobel – through its Sikkens brand – became the official supplier of paint solutions to the Vodafone McLaren. making the FIFA World Cup 2010 the most colorful world cup ever AkzoNobel's Stickerfix now being offered by Toyota introducing new ideas and developing sustainable answers for our customers every day.500 Walmart stores. The most colorful World Cup ever AkzoNobel supplied paint for five of the main stadiums of the 2010 Football World Cup in South Africa. Sikkens® and Interpon®. ICI Pakistan Limited Annual Report 2010 | About AkzoNobel | 07 . Our coating brands include famous names like International®. and also from Toyota After Sales facilities throughout the EMEA region. will be driven by former champions Jenson Button and Lewis Hamilton in the Grand Prix.000 items in our specialty chemical portfolio. We look forward to a bright and exciting future as one strong company with the drive to deliver ‘Tomorrow’s Answers Today’™. It has an ultra-thin high-tech adhesive film coated with a perfect match of the original vehicle color. color concepts and training courses for the building and renovation industry. together they supply businesses ranging from construction to consumer electronics and shipping to sports equipment. Dulux and Hammerite. using professional high-quality automotive refinish paint. The operational performance of our Specialty Chemicals division is among the best in the industry. New MP4-26 Formula 1 car AkzoNobel has become a full technology partner to the McLaren Group after expanding and extending the current relationship with Vodafone McLaren Mercedes. which features a sophisticated. and covers the most common colors of Toyota vehicles in Europe. A new Toyota Stickerfix™ solution will be available with every new color introduced to the range. Decorative Paints From brilliant ideas to brilliant paints AkzoNobel is the world's leading decorative paint company. home to famous names like Sikkens. Performance Coatings Coatings that help businesses do better We’re world leaders when it comes to performance coatings. There are over 2. Performance coatings have hundreds of uses. we make adhesives and floor leveling compounds. As well as paints. As a result. A portfolio of interior and exterior paints will be offered to more than 3. And our specialty coatings for metal. concrete and other critical building materials lead the market. we make sure that industries worldwide are supplied with quality ingredients for life’s essentials. AkzoNobel becomes primary paint supplier to Walmart AkzoNobel has been selected by the worlds largest retailer Walmart to be the primary paint supplier for the retailer’s US stores. our products appear in a remarkable variety of items we all use every day.Walmart selects AkzoNobel as primary paint supplier for US stores AkzoNobel. Toyota Motor Europe becomes first global automotive manufacturer to offer Stickerfix™ Stickerfix™ is an adhesive system which uses patented AkzoNobel paint technology in combination with a specially developed vinyl sticker. The stadiums were coated with AkzoNobel International protective coatings. Specialty Chemicals Why do some of the world’s biggest manufacturers rely on us? As a major producer of specialty chemicals with leadership positions in many markets. the product will be available in Toyota showrooms as part of a protection pack for new and used Toyota vehicles. We’ve divided them into five businesses. Branded as Toyota Stickerfix™. first-class service and flexible distribution. high gloss Sikkens system. The striking new MP4-26. The two companies have been working together since 2008. Interpon powder coatings and Dulux decorative paint. lacquers and varnishes. Over the years we’ve earned a rock-solid reputation based on our innovative technologies. We also offer a range of mixing machines. Our Decorative Paints business has a huge range of quality products for every situation and surface.

39. Omar Farooq Financial Analyst * Excluding discontinued Kansai business ** Excluding one-off recognition of deferred tax credit and discontinued Kansai business 08 | Financial highlights | ICI Pakistan Limited Annual Report 2010 .7 Billion % 24% Polyester 54 Soda Ash 24 Paints 4 4% Life Sciences 12 12% Chemicals 6 Turnover by business Total Turnover Rs.50 (2009: Rs 14.73) Total dividend per share for 2010: Rs 17. 3.00) proposed Operating result by business Total operating result Rs.Financial highlights Our results at a glance • • • • • 2010 turnover growth at 22 percent 2010 gross profit growth at 18 percent 2010 profit after tax growth at 19 percent 2010 earnings per share: Rs 17.50 (2009: Rs 8.9 Billion % Polyester 45 Soda Ash 20 Paints 17 Life Sciences 10 Chemicals 8 54% 6% In my two years with the company. both my routine tasks and exciting challenges have contributed towards enriching my experience.

I get to interact with different people. Asma Jamil Sheikh Financial Trainee Officer ICI Pakistan Limited Annual Report 2010 | Financial highlights | 09 .We are a company with five business streams. explore new areas of work and overall develop my individual as well as professional capabilities. Merging the synergies and consolidating this diversity to a single corporate portfolio is what makes my work exciting! Nasir Jamal Corporate Finance Manager & Treasurer I love how every day at work. each having its own dynamics and intricate financial structure. take up challenging tasks.

Profitability ratios Profit after margin Excluding one-off recognition of deferred tax credit in 2005 and discontinued Kansai business from 2005 .2007 10 | Financial highlights | ICI Pakistan Limited Annual Report 2010 .

selling & distribution and administration & general expenses ICI Pakistan Limited Annual Report 2010 | Financial highlights | 11 .Liquidity & other ratios Efficiency ratios Cost ratios * *Operating cost includes cost of sales.

97:1 0.05 25.1 (1.25 39.36 2.044 1.00 12.08 (20.0) 70.8) 1.16 2.81 50.16 6.33:1 0.62) 59.62 15.39 11.71 4.13 15.44 89.73 8.17 19.70 17.77:1 2.42 2.62 4.84 75.43) 48.554.468.84 2.5) (965.75 26.24 17.093.10 2.203 7.8 (789.73 2.74 0.49 103.8) (1.44 26.2) (1.040.08 2.17 – 89.28 2.51 34.53 1.36 – 0:100 6.67:1 0.16 2.42) (199.16 2.66 4.91 1.38 9.76 14.53 5.50 1.334.21 7.44 – 0:100 28.29:1 0.4) 1.91 % % % % % 8.36 3.32:1 0.69:1 0.90 10.819.81 15.42 19.29 – 0:100 – – 0:100 – Rs.71 13.61 (58.99 91.54 12.40 15.118.42 6.91 4.476.43 11.74 2.30 40.24 111.20 21.50 2.06:1 0.30 4.00 4.02 40.2) (2.4 (752.96 7.01 10.21 2.139.85 18.64 17.67 0.81) 1.59 3.00 28.02 12.24 (4.63 20.0 1.61 19.65 7.50 87.45 14.92 9.01 0.0) (1.50 1.781.39:1 0.77 (82.73 16.3 4.76 7.70 24.80 38.25 5.08 21.304 1.69) 53.05 46.35 11.44 14.82) 17.73:1 0.46 20.95 68.31 168.29 12.71 2.4 969.12 14.57 22.60 12.17:1 1.95 (7.95 5.37 19.38:1 0.45 18.858 2.7) 1.09 52.74 104.27:1 0.28 5.82 15.666.45 115.50 17.98 6.58 22.33 3.92:1 1.14 2.8 Excluding turnover of discontinued furnace oil and coal businesses in 2003.00 4.2) 1.06 (104.82 16.94 34.50 5.76 52.51 22.13 4.77 4.1 4.45 87.33 (11.05 4.4 4.5 4.89 2.397.00) (15.85:1 % Ratio Times 25.48 1.5 (32.72 – 40:60 3.2007.65 62.2 2.70 15. million Rs.74) 17.7 2.85 91.8 (1.84 4.02 4.57 8.25 58.77 4.38) 73.542.06 9.77 – Rs Rs Rs Times % % Rs Rs Rs 8. one-off profit on sale of PPTA shares in 2004.041.44 90.94 15.03 3.88) (31. The comparatives (2002 to 2004) have not been restated due to change in accounting policy on adoption of IFRIC 4.29 85.79 1.19 24.66 196.10:1 0.29) (41.46 48.7 3.43 44:56 1.86 9.34 10.77 1.27 3.22 1.43 % % % % 86.1 (103.03 16.52 4.24 13.5 (1.56 18.61) 81.58:1 1.9 3.23 4.52 10.43 2.27 3.24 2.5 1.92 19.91 4.35 104.17 16.18 21.312.86 6.18 4.52 2.85 97.00 1.14 5.04 9.69) 23.82 19.00 18.70 4.99 35.852 1.01 144.84 53.0) 4.05 73. recognition of deferred tax credit in 2005 and discontinued Kansai business in 2005 .64 6.14 140.29:1 1.23 2.946 1.37 20.81 Ratio Ratio Ratio 0.46 2.39 3.16 8.933.137 1.78 320.64) (52.04 13.35 4.572 2.23 5.388.34 3.45 18.98 1.52 13.026.8) 475.28 21.44 33:67 2.53 19.33 5.78 3.42) 227.77 10.337.20 6.40 11.51 10.07 79.12 1.91 5.3 3.08 32.36 30.938.00 2.16 (2.4 980.Operating & Financial Highlights Ratios Profitability Ratios Gross margin Gross profit turnover Operating margin Net profit margin Profit markup Profit before tax margin Return on equity Return on capital employed Return on assets Return on fixed assets Growth Ratios Net sales Operating results EBITDA Profit after tax Operating working capital Efficiency Ratios Asset turnover Fixed asset turnover Inventory turnover Current asset turnover Capital employed turnover Operating working capital turnover Inventory turnover ratio Debtor turnover ratio Creditor turnover ratio Operating cycle Revenue per employee Net income per employee Capex to sales Cost Ratios Operating costs (%of sales) Administration costs (%of sales) Selling costs (% of sales) Interest cost (%of sales) Equity Ratios Price earnings ratio Earnings per share Dividend per share Dividend cover Dividend (declared for the year) yield Dividend (declared for the year) payout Market value per share Break-up value per share with surplus on revaluation Break-up value per share excluding surplus on revaluation Liquidity Ratios Current ratio Quick/Acid test ratio Cash ratio Leverage Ratios Debt to equity Total debt to capital ratio Interest cover Summary of Cash Flows Cash generated from operations Net cash generated from operating activities Net cash used in investing activities Net cash used in financing activities Cash and cash equivalents at December 31 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 % % % % % % % % % % 23.65 78.86 24.07:1 0.29 0.70 23.878 1.65 89.91 23.69 6.14 15.50 82.91 10.56:1 0.54 32.64 10.62 89.00 2.32 89.43 3.24 2.14 5.14 3. million Rs.50 71.03 17. million 2.02 15.73 3. million Rs.406 4.22 10.65 1.98 7.44:1 1.823.35 16.87 6.27:1 0.28 3.6 1.77 17.12 13.95) 5.44 8.70 22.09 75.95 48.53 1.33 19.62 19.65 2. million Rs. 12 | Financial highlights | ICI Pakistan Limited Annual Report 2010 .55 2.19 8.95 15.1 1.23 17.08 41.62 13.142.67:1 0.41 13.67) 4.11 92.61 (118.01 18.51 2.82 0.56 44.64 Times Times Times Times Times Times Days Days Days Days Rs'000 Rs'000 % 0.37 218.20 81.85 13.03 (9.264 1.44 7.13 100.08 6.59:1 0.9) (1.40 5.75 4.477.72 21.434 806 3.27 (0.96 21.35 16.09 1.11 1.5) 3.9 2.54 25.33:1 1.787.46 52.14 5.66 7.00 1.379.94 4.23 23.438 399 8.78 4.52 14.81 25.51 6.45 2.26 5.03 26.96 2.13:1 1.68 11.28 9.58 30.42 5.1) 1.00 3.261.44 78.60 29.08) 15.8 2.16 60.18 23.044.68 15.45 1.34 48.39 (440.391 4.00 2.41 1.60 (23.62) 76.28 4.06 20.56 51.81:1 1.97 8.43 11.16 2.96 17.33:1 1.39 35.2 1.568 574 2.96 13.138 5.63 (324.94 10.94 45.79 1.916.59 25.81 33.91 (38.33 5.661.08 15.07 121.44:1 0.82 14.5 1.03 64.522.0 3.85 25.410 5.0) 4.71 96.77 14.56 2.30 13.87 9.50 2.42 – 0:100 32.04 3.25 4.39 1:99 5.7 447.03 3.86) 20.06 58.2 (4.41 17.687.75 54.62 16.06 13.00 44.704.615.74 36.971.07 2.67 48.83 21.420.92 40.4) (868.48 89.0 (1.09 (108.188.49 5.57 6.2 (938.25 56.0) (832.18 20.62 16.43 68.14 8.02:1 0.90 40.04 0:100 8.67 12.19) 23.716.04 15.97 6.93 18.03 7.00 11.44 94.47 12.35 0.66 58.

1 5.2 9.6 -3.9 1.299.027.6 460.8 2007 % 100.8 662.1 18.4 90.4 9 15 15 11 -2 28 11 13.7 6.6 0.7 67 6 27 100 48 52 100 15.1 22.929.612.764.9 613.2 22.9 21.969.470.500.9 613.1 2.8 3.7 213.9 9.4 10.8 2005 Rs.798.4 10.4 6.0 3.5 0.6 1.741.7 693.044.4 2.5 15.878.2 1.784.9 0.8 2007 % 17.455.3 171.3 16.476.6 10.4 21.7 73 3 24 100 56 44 100 14.9 18.799. In 2011 I'm looking forward to leading new automation and process improvement projects.0 119.5 287.3 22.8 4.7 7.4 2009 Rs.1 for 2010 are shown with inter business current account.455.862.9 3.7 1.987.7 1.9 9.784.572.1 18.675.4 2.5 14.495.1 5.6 163.023.4 -54.9 18.8 950.3 1549.2 104.6 67 1 32 100 59 41 100 12.5 1.2 58.741.9 115.674.117.Vertical and Horizontal Analysis Vertical Analysis Profit and Loss Account Net sales.8 2010 Rs.9 2. commission & toll income Cost of Sales Gross profit Administration & General Expenses Selling & Distribution Expenses Operating Result Financial Charges Other Operating Charges Other Operating Income Profit before taxation Taxation Profit after taxation Balance Sheet Total Equity and Revaluation Reserve Non Current Liabilities Current Liabilities Total Equity and Liabilities Non Current Assets Current Assets Total Assets 18.6 2008 Rs.044.1 129.1 1. m 28.0 81.4 40.842.5 11.7 31.0 22.7 22.7 7 -10 -5 3 -1 7 3 For better presentation segment assets in note 23.1 5.0 79.351.6 163.1 1.3 3.2 3.0 165.4 26.712.6 6.6 7.1 15.0 1.878.125.8 10.0 3.7 18.1 1.469.3 2005 % 100.8 760.0 1.4 876.436.8 1.574.4 486.5 1.0 1.4 7.2 8. m 18.1 2.0 146.081.470.030.081.1 20.0 17.9 15.7 2.6 9. m 19.3 4.3 153.035.1 15.9 21.030.5 -21.5 11.929.8 3.4 222.500.7 167.035.023.5 9.0 80.7 7.2 21.9 15.317. m 27.9 -91.4 11.030.905.6 0.6 25.9 22.0 19.4 4.130.381.027.862.422.6 22.4 40.5 18.117.9 59.6 2006 Rs.7 0.024.7 10.3 7.0 4.7 12.0 3.8 760. m 28.712.2 1.9 303.303.0 119.7 10.764.4 34.3 233.8 18.4 18.0 5.768.8 10.6 5.2 21.0 319.410.4 4.2 1.574.9 8.7 21.302.8 5.4 1.1 1.5 1.0 319.3 3.428.9 22.2 1.4 222.152.2 2010 Rs.8 6.0 1.7 10.6 0.2 3.9 9.5 2.6 36.8 18.303.6 0.8 1. m Profit and Loss Account Net sales.6 4.9 22. m 35.3 2.675.0 4.754.479.5 247.6 9.9 22.8 18.8 2010 % 23.027.479.7 10.8 0.891.8 3.812.7 2008 % 100.6 5.492.205.6 460.7 48.6 1.5 726.8 950.6 1.4 9.8 10.8 10.2 5.482.4 876.0 0.495.3 8.1 5.470.7 2.0 48.1 29.5 -7.8 0.5 247.429.389.1 5.3 4.093. m 35.125.469.0 1.2 45.969.0 1.6 5. commission & toll income Cost of Sales Gross profit Administration & General Expenses Selling & Distribution Expenses Operating Result Financial Charges Other Operating Charges Other Operating Income Profit before taxation Taxation Profit after taxation Balance Sheet Total Equity and Revaluation Reserve Non Current Liabilities Current Liabilities Total Equity and Liabilities Non Current Assets Current Assets Total Assets Horizontal Analysis 2005 Rs.7 8 413 -29 -2 7 -11 -2 14. m 23.1 15.0 0.764.7 10.7 2009 % 100.905.297.5 2006 Rs.686.093.842.0 146.022.126.0 28.9 63 1 37 100 59 41 100 11.4 1.8 -23. m 27.455.5 726.435. Shahzaib Khan Treasury Manager ICI Pakistan Limited Annual Report 2010 | Financial highlights | 13 .9 1.674.6 9.754.208.3 49.731.6 -0.4 66 1 33 100 52 48 100 13.984.5 12.4 9. This presentation does not have any effect on balance sheet or profit and loss account Managing the Treasury function offers dynamic learning opportunities.297.7 693.6 9.5 983.126.1 20.0 4.422.455.428.9 303.0 79.152.470.422.074.7 7 97 30 16 -1 38 16 15.2 1.205.6 2.7 70 5 25 100 46 54 100 9.4 2007 Rs.6 3.891.1 5.1 4.1 108.0 165.7 22.2 1.446.074.0 80.2 5.6 21.435. m 23.3 2.6 1.6 14 15 -8 6 5 8 6 12.5 983.8 662.6 0.7 4.2 2.3 2005 % 4.987.9 16 10 13 15 41 -10 15 11.027.1 129.389.414.9 1.3 16.443.7 13.7 11.6 2006 % 5.7 2009 % 2.3 3.1 108.429.6 30.7 1.1 15.351.443.2 104.2 2.5 2.5 15.6 6.9 16.984.410.6 4.0 81.6 0.5 1.2 23.0 4.6 11.0 20.3 8.6 815.3 233.8 3.7 3.0 0.4 486.2 1.4 4.302.1 3.969.3 13.414.6 -2.8 4.0 28.2 19.8 2.3 171.4 11.9 16.7 2008 % 20.6 17.7 10.4 90.8 18.422.0 1.470.6 815.929.612.1 4.022.9 3.2 8.969.7 1.072.470.208.124.8 18.7 213.818.130.812.052.317.5 287.3 1.1 5.0 22.8 4.124.7 10.024.8 2008 Rs.7 48.3 153.8 2.0 3.4 18.476.6 1.5 11.178.263.052.072.731.8 2010 % 100.7 2009 Rs.446.7 20.3 1. m 19.7 6.818.6 4.492.3 3.9 1.799.3 22.686.0 5.6 2006 % 100.263.1 3.764.8 6.768.030.4 2007 Rs.381.572.482.7 6.6 5.7 3.4 219.7 7.4 9.1 39.7 4.9 22.3 2.299.798.178.2 10.929.4 219.7 167.8 18.436.

Waqar is also a member of the Board of Governors of LUMS along with being a trustee of Duke of Edinburgh's Award Foundation.Our Directors M J Jaffer Chairman (Non-Executive) Appointed to the Board of Directors of ICI Pakistan Limited in October 1973. Port Qasim Authority as well as Chairman. Pakistan International Airlines Corporation. M Nawaz Tiwana Director (Non-Executive) Appointed to the Board of Directors of ICI Pakistan Limited in April 1997. an affiliate of the US Chamber of Commerce. Nawaz is also the Chairman of the Board’s Remuneration Committee. He is also the member of Advisory Committee for Pakistan of HSBC. Managing Director PSL and Chairman. Director Pakistan Business Council. His other engagements outside ICI Pakistan Limited are.. He retired as a senior partner of M/s Orr Dignam & Co. . State Cement Corporation of Pakistan. Waqar A Malik Chief Executive Appointed as the Chief Executive of ICI Pakistan Limited on October 1. He is the President of The Aga Khan Hospital and Medical College Foundation and a Director of Pakistan Centre for Philanthropy. He has held various positions such as Managing Director. Waqar Malik has over 25 years of extensive experience with the Group in senior management positions. Tourism Promotion Services (Pakistan) Limited and Lakson Investment Limited. He has diverse experience in commercial. A former President of Overseas Investors Chamber of Commerce & Industry (OICCI). Mahomed Jaffer is the longest serving member of the Board and is also the Chairman of the Board’s Audit Committee. 2005. Ali is also a Non-Executive Director on the Board of ICI Pakistan PowerGen Limited. Specializing in arbitration law. Mahomed Jaffer has represented Pakistan as an alternate member in the International Court of Arbitration of the International Chamber of Commerce Paris since 1997. non-executive Director on the Boards of Engro Polymer & Chemicals Limited and IGI Insurance Limited. 14 | Our Directors | ICI Pakistan Limited Annual Report 2010 Ali A Aga Director & Vice President Soda Ash Business Appointed to the Board of Directors of ICI Pakistan Limited in January 2009. Director on the Central Board of the State Bank of Pakistan. He is visiting faculty for Pakistan Institute of Corporate Governance and lectures extensively on Corporate Governance. An alumnus of Harvard Business School and INSEAD. He is also Chairman of the Advisory Committee of Pakistan of the Center for International Private Enterprise. Conciliation. Waqar is a Chartered Accountant by profession and a Fellow of the Institute of Chartered Accountants in England & Wales. Arbitration and related subjects. Ali is Vice President Soda Ash Business and has been with ICI Pakistan for the last 22 years. a leading corporate law firm of Pakistan. human resources and general management roles.

He joined AkzoNobel in 2003 and was previously the General Manager of the Americas Sub Business Unit Car Refinishes at AkzoNobel. Bart has been associated with the AkzoNobel Group since 1980. Before joining AkzoNobel Rogier had worked for various national and international clients. de C. Ltd. James is also a Director of AkzoNobel Comex S. Roelen Director (Non-Executive) Elected to the Board of Directors of ICI Pakistan Limited in August 2010. Rogier M. Mueen Afzal Director (Non-Executive) Appointed to the Board of Directors of ICI Pakistan Limited in May 2003.V. Derek Walter Welch Director (Non-Executive) Elected to the Board of Directors of ICI Pakistan Limited in June 2009. he joined the Civil Service of Pakistan in 1964 and held important positions. Feroz is the Chief Financial Officer and has been with ICI Pakistan for over 27 years.. James is an experienced executive and is currently the General Manager of AkzoNobel’s Car Refinishes Business Unit. James R Rees Director (Non-Executive) Elected to the Board of Directors of ICI Pakistan Limited in April 2008. during which he has held various senior positions.V. de C. Mueen is also the Chairman of Pakistan Tobacco Company Limited and Azgard Nine Limited.V. Derek has been associated with the AkzoNobel Group since 1998 during which he has held senior positions. Bart is also a Director of AkzoNobel UK Limited. a global business headquartered in the Netherlands. He is currently Director Business Development at AkzoNobel N. He also holds directorships in a number of companies of the AkzoNobel Group.A. and Vice President of AkzoNobel Chang Cheng (Guangdong) Co. Bart Kaster Director (Non-Executive) Elected to the Board of Directors of ICI Pakistan Limited in April 2008. Health Secretary. including Finance Secretary for the Government of Pakistan.Feroz Rizvi Director & CFO Appointed to the Board of Directors of ICI Pakistan Limited in October 2006. He is also a NonExecutive Director of ICI Pakistan PowerGen Limited and Faysal Asset Management Limited. He was awarded Hilal-eImitaz for distinguished public service in 2002. ICI Pakistan Limited Annual Report 2010 | Our Directors | 15 . and Secretary General. Rogier has been associated with the AkzoNobel Group since 2008 during which he has held senior positions. and Anco Servicios Profesionales S. AkzoNobel Decorative Coatings Limited and ICI Limited. He is currently Director of Murree Brewery Co. Finance and Economic Affairs from 1999 to 2002. G. A. and is on the Board of Governors of Aitchison College. Lahore. Limited and the Pakistan Poverty Alleviation Fund. during which he has held senior positions and various assignments in Europe and Asia.

Profit after tax at Rs 2. commission and toll income Financial Performance 2010 Rs Million Turnover Net Sales Income Gross Profit Operating Result Profit Before Tax Profit After Tax Earnings Per Share (Rs) 2009 Increase Percentage 22 24 18 23 21 19 19 39. This together with strong margin management and good cost control resulted in operating profit increasing by 23 percent over last year despite a very difficult operating environment.686 3.399 28. Earnings Per Share at Rs 17.713 3.43 billion was 19 percent higher compared with 2009.533 35.50 was also higher by 19 percent.130 6. 2010.045 14.430 5. 2010 The Directors are pleased to present their report together with the audited financial statements of the Company for the year ended December 31.2007 and recognition of deferred tax credit in 2005 .Report of the Directors for the year ended December 31. Six years financial performance at a glance Net sales.676 3. On group basis (including the result of wholly owned subsidiary ICI Pakistan PowerGen Limited) profit after tax for the year at Rs 2.732 2.48 billion was 21 percent higher compared with 2009.028 3. Overview Net Sales Income (NSI) of your Company increased by 24 percent over last year on the back of higher sale volumes as well as selling prices.429 17.50 32.073 2.73 Value of addition and its distribution Raw material & services Government exchequer & duties Dividends Employee remuneration & benefits Operating & other expenses Profit retained 16 | Report of the Directors | ICI Pakistan Limited Annual Report 2010 Excluding discontinued Kansai business from 2005 .

Till end 2010. To fill this casual vacancy. Board changes Mr Tariq Iqbal Khan resigned from the Board with effect from July 19. Polyester achieved 19.4 millions man hours and Life Sciences achieved 7. health. In addition certain other community activities are carried out directly by your Company. with effect from August 13. A detailed report on HSE performance and development in 2010 is available on page 40 of the annual report. Other than this.e. Energy consumption and CO2 emissions were lower by 5. run and managed by your Company.000 care packs containing immediate sustenance items and clean drinking water packed and prepared by the employees were also distributed in the flood affected areas. your Company has conducted Surgical Eye Clinic programs at Khewra in collaboration with the Layton Rahmatulla Benevolent Trust (LRBT). two minor injuries were reported by Paints site involving supervised contractors who resumed their jobs after treatment.subject to the approval of the shareholders at the forthcoming Annual General Meeting. Mr Tariq Iqbal Khan and welcomes Mr Rogier Roelen as a new Director of the Company. Health: Since 1991.9 million man hours. A similar program was initiated near our Polyester plant in Sheikhupura with the first eye camp being held in November 2010 treating nearly 200 patients.023. Notable energy conservation initiatives included the Reverse Osmosis Water Plant at Soda Ash brought on line in Q4 2010. 5. The Board places on record its appreciation for the valuable contribution made by the outgoing Director. Beach cleaning activity is a part of the project and this year along with our volunteers we also involved students of the area. In 2010. One million meals in the form of essential rations along with 10.204 to over 35. Disaster relief: In 2010 the country faced its worst natural disaster which left over 20 million people robbed of their homes and livelihood. Government Primary School in Tibbi Haria Sheikhupura and the Kakapir Government Boys School in Karachi to improve and upgrade them. 10 each of the issued and paid up capital of Rs. 17.3 million man hours without LTI (lost time injury) to Employees and Supervised Contractors. an institute for children with special needs. Rs 12 per share of Rs. Environment: Support for 'Save the Turtle Project' in collaboration with WWF Pakistan continues. This. Corporate social responsibility-CSR Your Company's community social and other charitable activities are managed through the ICI Pakistan Foundation which is operated by its own Board of Trustees. The foundation focuses on community development through investment in education. All these schools are supported by the foundation. Soda Ash achieved 23. a total of Rs 42. The foundation is now actively involved in the rehabilitation efforts and is helping build homes for flood affectees.388. contributions by staff and other stakeholders). Implementation of Asset Integrity plans and launch of Behaviour Based Safety during the year further aim to improve our Health and Safety Performance moving forward. environment and infrastructural development along with disaster relief.5 million was spent on community activities (inclusive of contribution by parent Company. the Directors appointed Mr Rogier Roelen. your Directors are pleased to announce a final dividend of 120 percent i. 2010.. Education: In the sphere of education the foundation made significant infrastructural investments in the Government Girls School in Bararkot Kashmir. We also completed twenty years of continued support to the Institute of Behavioral Psychology (IBP). The total contribution towards flood relief activities was over Rs 36 million (inclusive of funds contributed by parent Company directly to the ICI Pakistan Foundation. Safety and Environment (HSE) There was no reportable occupational illness to our employees or supervised contractors in 2010. 2010 for the remainder of the term to expire on April 28. 1. Health. ICI Pakistan Foundation launched a pan-Pakistan Flood Relief Campaign 2010. Accordingly. Specialty Chemicals achieved 5. free medical and veterinary camps were set up across the country by the Life Sciences business. the Board has decided to pay out the Profit after Tax for the year 2010 as total dividend for the year 2010.000 every season. During the year. To assist the affectees.Directors' visit to our Polyester plant Life Sciences Medical Camp for flood victims Relief goods being delivered to the Pakistan Navy for dispatch to the flood victims Dividends In view of the Company’s healthy cash position.992 major and minor surgeries conducted at the Winnington Hospital. 116. 2011.4 million man hours. staff and other related concerns for flood relief).988 outpatients have been treated and 11. ICI Pakistan Limited Annual Report 2010 | Report of the Directors | 17 . The Safety performance at other sites remained well controlled.000/.50 per share. This is our sixth year supporting this project.50 per share makes a total dividend of Rs. there is a significant increase in hatchling release from 2. After our engagement. including the already paid interim dividend of Rs.3 percent and 3 percent respectively on like to like basis compared with 2009.

legal & external risks and ensuring appropriate controls to mitigate these risks. A detailed report on human resource performance and development in 2010 is available on page 42 of the annual report. Higher usage of polyester resulted in unprecedented increase in PSF demand and prices. personal and functional effectiveness. talent movement across businesses and functions remained a strategic priority for your Company. development and growth. The Performance and Development Dialog mid and year end assessment processes was concluded as per timeline and company guidelines ensuring the employees continue to benefit from clear and credible systems. A detailed report on risk management philosophy. Human Resource In line with our ambition to be recognized as a Company which offers opportunity to its people for ongoing learning.Volunteering: Your Company greatly encourages its employees to participate in community activities. A detailed report on CSR performance in 2010 is available on page 36 of the annual report. In 2010 a total of nearly 4500 man hours were spent volunteering. Polyester Staple Fiber (PSF) Prices for PTA and MEG continued to rise throughout the year due to higher crude oil prices. however APTMA has challenged the methodology utilised by the NTC and secured a stay from the High Court which is being challenged by the NTC. key risks and tools used by the Company is available on page 31 of the annual report.982 man hours of training in 2010 compared to 20. Pakistan and to some extent in the USA along with pick-up in global economic activity has substantially influenced the demand for polyester. focusing on improving managerial. financial. This encompasses identification and prioritization of strategic. In 2010 your Company conducted the Gallup Viewpoint engagement survey with the aim of benchmarking and providing managers a high performance work environment fostering talent engagement and development. Earlier in the year.980 hours in 2009. operational. your Company imparted 27. A significantly lower cotton crop in China. In addition. speculative trading and concerns over supplies in the regional market. The domestic cotton prices followed the international lead and rose to a record high of Rs 10. the decision of National Tariff Commission (NTC) imposing anti-dumping duty on PSF from regional players had been set aside by the High Court on technical grounds. The global cotton prices rose to an all time high of 159 cents/lb. Learning opportunities for managers was also provided through AkzoNobel’s global strategic assignments and leadership development programs.500 per maund. NTC has moved to remove these technical issues. Risk Management Framework The Board has an overall responsibility for ensuring that an effective risk management process is in place. 18 | Report of the Directors | ICI Pakistan Limited Annual Report 2010 .

Iran and Pakistan.0 million was 14 percent lower than 2009 as the impact of higher revenue was dragged down by the higher usage of more expensive furnace oil during gas outages. China. EU. Kenya. leading to a decline in their consumption of soda ash. The overall gas supply was at an average 25 percent lower than last year causing major disruptions across all industries. which is adversely affecting the domestic industry. which benefitted from growth in the unorganized detergent sector. Dumping of soda ash into Pakistan from certain countries also remains a key concern and your Company has filed an anti-dumping application with the National Tariff Commission. specially Glass. the full year market growth remained at about 4-5 percent. Ukraine. The focus throughout the year was on optimizing operational efficiencies and strict cost control in all areas. ICI Pakistan Limited Annual Report 2010 | Report of the Directors | 19 . Going forward. primarily on the back of exports to various countries in the region as the business successfully established itself in the export market.736 tonnes on the back of a buoyant market. sales volume during the year was higher by 12 percent compared to 2009. This is further aggravated by dumping of soda ash into Pakistan. Soda Ash Global soda ash demand witnessed some recovery in 2010 based on higher consumption in the emerging markets of China. seeking an investigation into this practice and initiation of investigation is expected in the near future. Resultantly. regional feedstock prices are forecast to remain firm due to tightness in PTA and MEG supplies. 86 percent higher compared to 2009.Long Service Award ceremonies were celebrated across the company Advanced Management Program for senior managers An aerial view of our Polyester plant Our Soda Ash plant at night Sales volume for the year was 5 percent higher compared to last year at a record 129. Ministry of Commerce and Industry. Business had to incur an additional cost of over Rs 500 million on alternate fuels compared to 2009.1 million. impacting soda ash demand in the country.022. Higher volumes and better gross profit margins resulted in the highest ever operating result of Rs 2. Domestic soda ash market remained subdued as downstream industrial activity was severely affected by the unprecedented gas curtailments in 2010 which persisted throughout the year. To cater for the high demand the plant was run at full capacity throughout the year. However. Government of India has initiated anti-dumping investigations against exporters of soda ash from USA. The domestic soda ash market thus continues to remain in an over supply situation due to lower off take by the downstream industry. Business operations remained severely affected as the full time equivalent gas outages increased from 60 days in 2009 to 143 days in 2010. gas curtailments are expected to increase and will keep the industrial activity depressed. Overall. Going forward. All major industrial consumers of soda ash. though later in the year an expected good global cotton harvest will put pressure on PSF prices and margins. Operating result at Rs 895. Domestic fiber demand is expected to stay stable in the near term. Your Company was also served a notice along with other exporters under investigation and has given a written response to the Indian authority. in the short term. unlike previous years when curtailment was restricted to winter months only. Silicate and Paper industries were affected. the negative impact of lower consumption by industrial segment was somewhat mitigated by growth in the bazaar segment. India and Brazil during the first three quarters of the year.

Despite all the negative indicators the business through effective margin management successfully kept the unit margins intact. operating result was lower by 8 percent only. Performance of the business going forward would be highly dependent on external factors such as the economic conditions. 20 | Report of the Directors | ICI Pakistan Limited Annual Report 2010 . with consumers moving away from the premium paints segment and buying lower priced paints. Sales in the Pharmaceutical segment grew by 11 percent over last year through volume growth. Consequently. Vegetable Seeds segment growth was driven by product expansion and aggressive marketing. Refinish segment maintained its focus on establishing the Group products portfolio. Post floods and rising cotton prices considerably tilted farmers preference in favour of cotton compared to sunflower.761. The domestic construction sector which is the primary driver for growth. Life sciences Pharmaceutical. However a conservative policy towards debtor’s provisioning was adopted and one off provision of Rs 108 million was taken in view of the worsening economic conditions particularly liquidity crunch and high interest rates.Paints Sales volume was up by 4 percent over last year in the Decorative segment despite difficult market conditions due to the extended monsoon season and severe floods in Q3. However due to a sharp decline in market liquidity generally and also downtrading on account of high inflation. a new mid-tier product introduced into the market was well recieved and has demonstrated good potential for growth. Dynacoat. Animal Health and In the industrial segment. business successfully established itself in the OEM top coats segment with breakthroughs at major car manufacturers. With highest ever NSI at Rs 3. Some down-trading has also been observed. Excluding the effect of the above one-off provision. The burden of high inflation and lower disposable income has also adversely effected the painting maintenance cycle. is yet to return to its high levels of 2006-2007. whereas. Vegetable Seeds segment demonstrated strong double digit growth in sales compared to last year on the back of both price and volume in Animal Health segment. revival of construction activities and the law & order situation in the country. the operating result at Rs 133. However softening of the economy and resultant lower Foreign Direct Investment (FDI) has considerably contracted the projects business generally. extending it from a historical average of 3 years to 5 years.5 million. growth in the refinish segment remained generally low. Animal Health and Vegetable Seeds segments posted double digit growth in sales offsetting weak performance in the sunflower seeds segment. operating result at Rs 438.8 million was 4 percent higher compared to last year. Significant progress was made in establishing AkzoNobel's product portfolio in the Marine and Protective Coatings as well as Packaging Coatings businesses.3m was 49 percent lower compared to 2009. Rapid increase in raw material prices internationally is also expected to put margins under pressure.

2. ICI Pakistan Limited Annual Report 2010 | Report of the Directors | 21 . Other operating income was higher by 6 percent due to increase in interest income on bank deposits. Without additional freight expenses. 2. has badly affected the industrial sector of Pakistan. Finance The Company’s Balance Sheet management remained strong with current ratio improving to 2. The Company’s contention is that these are unwarranted actions and have filed appeals in High Court of Sindh against this highhanded action of the department. The debilitating power cuts and widening gap between demand and supply of gas in the absence of a sound energy policy and adhoc allocation of gas to the manufacturing units. The consolidated profit after tax amounting to Rs. Net sales income was higher by 24 percent compared to last year.Pan-Pakistan CE engagement session ICI Dulux color studio Our Pharmaceuticals team at the launch of Amybact Chemicals Operating result for the year at Rs 223. Excluding this administration and general expenses were higher by 1 percent.3) Future outlook Macro economic outlook is very challenging and business conditions are expected to remain difficult.429 million was 19 percent higher compared to last year. Financial charges for the year were lower by 2 percent. If the government does not move to address these issues it will damage the industrial sector of Pakistan with far reaching consequences. As mentioned in note 42 on page 113 the tax department continues to issue what is being referred to as “protective assessment” seeking to disallow unabsorbed depreciation relating to PTA assets.4 million was higher by 3 percent compared to last year on the back of better price management despite decrease in sales volume by 6 percent mainly due to lower demand on account of extensive gas load shedding and impact of floods in Q3 2010. Going forward. gas availability is a major cause of concern with the outage going beyond the expected levels adversely affecting demand from downstream industries. profit after tax amounting to Rs. Consequently.9) and liquidity ratio to 1. Gross profit was higher by 18 percent on account of better volumes across all businesses and effective margin management.4 (2009:1.2 (2009:1. Administration and general expenses for the year were 10 percent higher than last year mainly due to one off provision of Rs 108 million in Paints business explained earlier.50 for the year was higher by 19 percent compared to last year.477 million was also 21 percent higher compared with last year. selling and distribution expenses were higher by 7 percent. Earnings per share at Rs 17. Selling and distribution expenses for the year were 14 percent higher primarily on account of higher freight expenses relating to soda ash exports.

f. 11. Chartered Accountants retire and being eligible. 2009. August 13. Mr Zia U Syed (Secretary Audit Committee) 1 Resigned w. 4. M J Jaffer Mr. 5 (five) Audit Committee and 1 (one) Remuneration Committee meetings were held. Key operating and financial data for the last 10 years is summarized on page 12 Outstanding taxes and levies are given in the Notes to the Financial Statements. Waqar A Malik Mr. 8. Saira Nishtar (Company Secretary) 13. Nawaz Tiwana Mr. There are no doubts upon the Company’s ability to continue as a going concern.. 10.220 3.718 Attendance During the year. the results of its operations. Bart Kaster Mr. Amir Jamil Abbasi. cash flows and changes in equity. have offered themselves for reappointment with their partner in charge of audit Mr. James R Rees Mr. 4 (four) Board of Directors. Attendance by each Director/CFO/Company Secretary/Secretary Audit Committee was as follows. Mr. Derek W Welch Mr. 2010 Leave of absence was granted to Directors who could not attend some of the Board meetings 22 | Report of the Directors | ICI Pakistan Limited Annual Report 2010 .620 404. Name of Director Board of Directors Attendance 4 4 3 3 4 3 – 3 3 3 1 4 – 2 Appointed • • Audit Committee Attendance 5 – 4 – – – – 4 5 – – – 4 Remuneration Committee Attendance – – – 1 – – – – – 1 – – – • • • • • • • 1 2. suppliers and service providers.477 4.048. 3. Compliance with the code of corporate governance As required under the code of corporate governance dated March 28. Feroz Rizvi Mr. Mueen Afzal Mr. and appropriate steps are taken to comply with best practices. are as follows: Value (Rs ‘000) 1. Rogier M G Roelen2 Ms.e.066 2.. The management of the Company is committed to good corporate governance. ICI Pakistan Non-Management Staff Provident Fund 259. 5. Your Company’s future performance will be influenced by the issue around energy supplies and macro economic conditions.f. 2002. Investment in retirement benefits The value of investments. 9.e. International Accounting Standards. ICI Pakistan Management Staff Provident Fund 662. There has been no material departure from the best practices of corporate governance as detailed in the Listing Regulations. as applicable in Pakistan.With its diverse portfolio. ICI Pakistan Management Staff Pension Fund 1. 6. Appropriate accounting policies have been consistently applied in preparation of financial statements and accounting estimates are based on reasonable and prudent judgment.. Tariq Iqbal Khan1 Mr. July 19. ICI Pakistan Management Staff Gratuity Fund 329. 7. strong market positions and excellent management your Company is well positioned to grow if the external limitations mentioned above are managed by the Government of Pakistan. Proper books of accounts of the Company have been maintained. the Directors are pleased to state as follows: • The financial statements prepared by the management of the Company present fairly its state of affairs. have been followed in preparation of financial statements. 2010 w. The system of internal control is sound in design and has been effectively implemented and monitored. ICI Pakistan Management Staff Defined Contribution Superannuation Fund 5. Auditors The present auditors KPMG Taseer Hadi & Co. made by the staff retirement funds operated by the trustees of the funds as per their respective audited financial statements for the year ended December 31. Ali A Aga Mr. Acknowledgment The results of your Company are a reflection of the commitment and contribution by the strong pool of talented employees and the trust reposed in the Company by its customers. 12.

Pattern of shareholding A statement showing the pattern of shareholding in the Company along with additional information as at December 31. ICI Omicron B. (an AkzoNobel group company) continues to hold 75. The ICI Pakistan Group comprises of ICI Pakistan Limited and ICI Pakistan PowerGen Limited. This was duly reported to the Directors and the relevant statutory returns were also filed. a wholly owned subsidiary. Group financial statements The audited financial statements of the ICI Group for the year ended December 31. CEO. 2010 are attached. 2010 appears on page numbers 120 to 123. Company Secretary and their spouses and minor children did not carry out any transaction in the shares of the Company during the year except for Mr.000 shares of the Company in August 2010. The Directors.23 % and individuals and others held the balance 13. while Institutions held 10. The highest and the lowest market prices during 2010 were Rs 190.50 per share respectively.81% shares.96 %. Feroz Rizvi. 2011 Waqar A Malik Chief Executive Our veterinary camp during the flood relief campaign Students attending a class at the Governement Boys/Girls Primary School.40 and Rs 109. CFO and a Director of the Company who purchased 15. Employees signing the Safety Day pledge banner M J Jaffer Chairman Karachi February 16. Kakapir ICI Pakistan Limited Annual Report 2010 | Report of the Directors | 23 .V.

all of whom are non-executive directors including the chairman of the committee. At present the Board includes seven non-executive directors and three executive directors. The Directors have voluntarily declared that all the resident directors of the Company are registered taxpayers and none of them has defaulted in payment of any loan to a banking company. 3. nonexecutive directors and directors representing minority interests on its Board of Directors. 2010 which was filled up on August 13. were circulated at least seven days before the meetings. 5. which has also been in operation since 1997. The Company has applied the principles contained in the Code in the following manner: 1. well conversant with their duties and responsibilities. both in-house and external. The Directors have been provided with copies of the Listing Regulations of the Stock Exchange. whereby a listed company is managed in compliance with the best practices of corporate governance. adopted a Statement of Ethics and Business Practices. 4.Statement of Compliance with the Code of Corporate Governance for the year ended December 31. The Board of Directors has also approved and adopted a corporate strategy for the Company and significant policies. 2001. 15. the Directors adopted a new Code of Conduct which was circulated among all employees of the Company. 24 | Statement of Compliance | ICI Pakistan Limited Annual Report 2010 . The Board of Directors of the Company. All transactions with related parties are placed before the Audit Committee on a quarterly basis and approved by the Board along with the methods for pricing. Written notices of the regular Board Meetings. The financial statements of the Company were duly endorsed by the CEO and CFO before approval of the Board.Our Ambition’ was approved by the Board on February 18. The minutes of all four meetings were appropriately recorded and circulated in time. 12. The 2nd quarterly and annual accounts were also initialed by the external auditors before presentation to the Board. 2005 approved and adopted a mission statement which has been circulated to the employees of the Company. 2. One casual vacancy occurred in the Board on July 19. 2010. On October 23. the Company’s Memorandum and Articles of Association and the Code of Corporate Governance. including appointment and determination of remuneration and terms and conditions of employment of the CEO and other Executive Directors. The Directors. All the powers of the Board have been duly exercised and decisions on material transactions. None of the directors is a member of a stock exchange. Mr Rogier Roelen in 2010. a DFI or an NBFI. 2010 This statement is being presented to comply with the Code of Corporate Governance contained in the listing regulations of the stock exchanges for the purpose of establishing a framework of good governance. 11. A separate vision statement under the title of ‘ICI Pakistan . 9. 2008. 14. A presentation on corporate governance and the roles and responsibilities of directors was arranged for the new Director. 16. along with agenda and working papers. another booklet titled. The Company maintains a list of related parties which is updated on a regular basis. “A Handbook of Directors” was circulated amongst the Directors. During the year four regular meetings of the Board were held which were all presided over by the Chairman. therefore. 6. Orientation courses. The Company has complied with all the corporate and financial reporting requirements of the Code. The directors are. 8. ICI Pakistan also has a Remuneration Committee comprising two non-executive Directors. 10. the employees and the directors of the Company signed a statement on the Code of Conduct reaffirming their pledge that they are aware of the Code and abide by it at all times. in its meeting held on February 23. New Company Secretary. No new appointment of CFO or Head of Internal Audit has been made during the year. The Board of Directors at its meeting held on February 25. In 2010. 2010 has been prepared in compliance with the requirements of the Code and fully describes the salient matters required to be disclosed. The Report of the Directors for the year ended December 31. Besides a comprehensive paper on ‘Roles and Responsibilities of Directors’ was also circulated to the directors for their perusal in November 2006. In April 2008. The Company encourages representation of independent. 13. It comprises three members. The directors voluntarily confirmed that none of them is serving as a director in more than ten listed companies. The Audit Sub Committee of the Board has been in existence since 1992. were also arranged for the Board in 2003 & 2006. including ICI Pakistan Limited. have been taken by the Board. Training sessions were held at various locations in order to apprise all employees about the revised Code of Conduct. CEO and executives do not hold any interest in the shares of the Company other than that disclosed in the pattern of shareholding. 7. This statement under its title ‘The Way We Do Things Around Here’ and then ‘ICI Way’ had been regularly circulated within the Company since 2001. 2010. The corporate strategy is reviewed by the Board from time to time as appropriate. 2010. Ms Saira Nishtar was appointed by the Board on February 1.

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. Based on our review. 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. 2011 Waqar A Malik Chief Executive February 16. The responsibility for compliance with the Code of Corporate Governance is that of the Board of Directors of the Company. M J Jaffer Chairman Karachi February 16. 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. that they or any of the partners of the firm.Review report to the members on statement of compliance with best practices of code of corporate governance 17. 19. 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. Further sub-regulation (xiii) of Listing Regulations 35 (previously Regulation No. 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. They are involved in the internal audit function on a full time basis. KSE/N-269 dated January 19. We have not carried out any special review of the internal control system to enable us to express an opinion as to whether the Board’s statement on internal control covers all controls and the effectiveness of such internal controls. to the extent where such compliance can be objectively verified. all such transactions are also required to be separately placed before the audit committee. 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. 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 ICI Pakistan Limited to comply with the listing regulations of the respective Stock Exchanges. We have not carried out any procedures to determine whether the related party transactions were undertaken at arm’s length price or not. 2011 Karachi KPMG Taseer Hadi & Co. Further. their spouses and minor children do not hold shares of the Company and that the firm and all its partners are in compliance with International Federation of Accountants (IFAC) guidelines on Code of Ethics as adopted by Institute of Chartered Accountants of Pakistan. who are considered suitably qualified and experienced for the purpose and are conversant with the policies and procedures of the Company. 2009 requires the Company to place before the Board of Directors for their consideration and approval 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. where the Company is listed. Chartered Accountants. 21. Chartered Accountants ICI Pakistan Limited Annual Report 2010 | Review report | 25 . The Board has outsourced the internal audit function to M/s Ford Rhodes Sidat Hyder & Co. 18. There have been five Audit Committee meetings during the year under review. ICI Pakistan has an effective internal audit function in place. The Directors have approved the revised terms of reference of the Audit Committee in light of the Code of Corporate Governance. in all material respects. 37) notified by the Karachi Stock Exchange (Guarantee) Limited vide circular no. 20. We confirm that all other material principles contained in the Code have been complied with. 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. with the best practices contained in the Code of Corporate Governance as applicable to the Company for the year ended 31 December 2010.

This forum is supported by the following capability groups: • Commercial Capability Group • Technical Capability Group • Finance. Succession planning forum This forum is chaired by the CE and meets annually to review the company’s succession planning and talent pipeline at all levels.Management committees Executive Management Team 1 2 3 4 5 6 7 Executive management committee The CE is the Chairman of the Executive management committee. Business Vice Presidents. Soda Ash Business M Asif Malik Vice President. safety & environment functions of our company and is also responsible for ensuring that all our operations are environment-friendly and compliant with regulatory and AkzoNobel framework. HSE management committee The Health. Polyester Business Waqar A Malik Chief Executive 5 Khalid Alvi Vice President. Corporate HR & Life Sciences Business 3 Suhail A Khan Vice President. It oversees the health. This committee meets once a month under the chairmanship of the Chief Executive and is responsible for strategic business planning. and Head of Human Resources. IT. Paints Business 2 4 6 26 | Management committees | ICI Pakistan Limited Annual Report 2010 . The committee comprises the Chief Financial Officer. Legal & Administration Capability Group • HR Capability Group 1 Ali A Aga Vice President. Safety & Environment committee. decision making and overall management of the Company. Chemicals Business Feroz Rizvi Chief Financial Officer 7 Jehanzeb Khan Vice President. periodically reviews and monitors company-wide practices. chaired by the CE.

• Compliance and Risk Management • Community investment • Manufacturing • HSE • HR • Operations • Supply Chain The Council is formulated with the agenda of including sustainability in all aspects of our value chain.Organizational structure Chief Executive Corporate Technical Corporate Communications Chief Financial Officer Human Resources Soda Ash Business Polyester Business Paints Business Life Sciences Business Chemicals Business Supply Chain network Chaired by the Vice President Paints Business. Sustainability Council The objective of the Sustainability Council is to implement a sustainable business strategy for the company and stakeholders. the Supply Chain Network comprises of Supply Chain managers. ICI Pakistan Limited Annual Report 2010 | Management committees | 27 . to develop and retain leadership positions in all sustainability indicators. It comprises of a multi-disciplinary team representing the following segments of ICI Pakistan Limited. and aims to improve procurement and material handling effectiveness by seeking and capitalizing of synergistic opportunities and sharing of best practices.

Results of the investigation are communicated to the complainant. ICI Pakistan has had an Audit Sub Committee and a Remuneration Sub Committee of the Board much before the introduction of the Code of Corporate Governance comprising all non-executive directors including 28 | Corporate Governance and Compliance | ICI Pakistan Limited Annual Report 2010 .V. statutory. contractors. implementation of the aforesaid goals and strategies in accordance with the policies and guidelines laid down by the Board of Directors. suppliers and others while doing business for the Company. The Board of Directors is responsible for setting the goals. Besides this.Corporate Governance and Compliance How we govern our affairs is what dictates our long-term performance. In order to apprise the employees of the Code of Conduct. ICI Pakistan’s corporate governance structure is based on the company’s articles of association. The shares of the Company are listed on the three stock exchanges of the country. Thus the positions of Chairman and Chief Executive are held by separate individuals with clearly defined roles and responsibilities. a statement to the effect that he or she understands the Code of Conduct and that he or she abides by it at all times while doing business for the Company. the Karachi Stock Exchange (G) Limited. regulations and company's code of conduct. objectives and strategies the Company has to adopt and for formulating the policies and guidelines towards achieving those goals and objectives. The Chairman of the Board is a non-executive director. listing Regulations of the three stock exchanges. ICI Omicron B. In order to facilitate a smooth running of the day to day affairs of the Company. ICI Pakistan’s corporate governance structure is based on the requirements of the Companies Ordinance. These procedures include a risk management assesment and control system. complemented by several internal procedures. the Board entrusts the Chief Executive with necessary powers and responsibilities who in turn is assisted by an Executive Management Team comprising the Chief Financial Officer and the Heads of businesses and functions. The Board is accountable to the shareholders for the discharge of its fiduciary function. alongwith other circulars and guidelines issued by the Securities and Exchange Commission of Pakistan. Corporate Governance Statement ICI Pakistan Limited is a public limited company established under the laws of Pakistan. every employee and director of the Company is required to sign. Lahore Stock Exchange (G) Limited and Islamabad Stock Exchange (G) Limited. 1984. The Board is also assisted by a number of sub-committees comprising mainly non-executive directors. regulatory and other compliance requirements applicable to companies listed on the stock exchanges. the Company’s Articles of Association and Company's Code of Conduct. the Company organizes training sessions and induction programs on a regular basis. the employees also have access to a ‘Speak Up’ program whereby any employee can report any unethical dealing by any Company employee on a confidential basis either through telephone or e-mail. Complete anonymity of the person using this facility is assured and all complaints are thoroughly investigated either by the Company internally or by assigning it to the Internal Auditors. Even before the introduction of the requirement in the Code of Corporate Governance in 2002 (‘the Code’). the Code of Corporate Governance. The management is responsible for carrying out the The present Board of ICI Pakistan comprises a well balanced mix of executive and non-executive directors. A transparent structure to monitor and report our performance is what governance is all about. In order to facilitate strict adherence to the Code of Conduct. on an annual basis. as well as a system of assurances of compliance with the applicable laws. It has ten directors which include three executive directors (including the Chief Executive) and seven non-executive directors out of whom three are independent directors and four represent the majority shareholders. ICI Pakistan Limited has always held in high esteem the best practices of corporate governance and believes in widely propagating the values and the ethics for strict adherence by all the employees. ICI Pakistan had a Code of Conduct which was circulated to all the employees for necessary compliance.

The Company has a stringent policy on insider trading and securities transactions. the Company continued with the control measure then adopted. ICI Pakistan Limited Annual Report 2010 | Corporate Governance and Compliance | 29 .all to provide better and increasingly useful products and more efficient services to our customers. The Ten Principles form a set of core values in the areas of human rights. ICI Pakistan Limited has a sound system of internal control and risk management. rules and procedures governing extraordinary transactions. including our financial statements. All relevant employees are required to sign an additional declaration of compliance with the Competition Law. We request all our shareholders to participate. has been outsourced to M/s Ernst & Young Ford Rhodes Sidat Hyder & Co. Competition Law As embodied in our Code of Conduct. In addition. Saira Nishtar General Counsel & Company Secretary the Chairman.I am proud to work for a company that is among those leading the way forward in corporate governance practices in Pakistan. No other class of shares is issued by the company.81 percent shares in the company. culture and day-to-day operations. This is achieved through adequate and comprehensive disclosure of all communications to our shareholders and other stakeholders. the ‘Permanent Insiders’ can deal in the Company’s shares only during the open period specifically announced by the Company immediately after the quarterly Board meetings and the announcement of financial results. are disclosed in the notes to our financial statements. Ownership & Control Structure Complete disclosure of ICI Pakistan’s shareholding structure is given in the pattern pursuant to the Companies Ordinance and the Code of Corporate Governance in the printed accounts of the company. Our share capital is comprised of ordinary shares. we endeavor to provide as much supplementary information in the financial statements as possible. can deal in the Company’s shares any time outside the closed period announced by the Company on the eve of the quarterly Board meetings. All critical accounting estimates.V. The Legal Department conducted Competition Law Training of 156 relevant employees in 2009. ICI Pakistan competes vigorously but fairly with its competitors within the framework of applicable laws . with all stakeholders. Related Party Transactions We maintain a complete and updated list of related parties. ICI Omicron B. The rest of the shares are held by the general public and institutions. Certain senior executives and the finance staff are categorized as ‘Permanent Insiders’. The terms of reference of these Committees have been given elsewhere in this Report. We continue to regularly hold training sessions to ensure compliance with competition laws for relevant employees. As a consequence of regular review over several years the company now has an extremely robust system of internal controls which was further strengthened in 2005 when the Company had to go through a comprehensive implementation of the Sarbanes and Oxley Act (SOX) due to listing of its previous parent company’s shares on the New York Stock Exchange. divides the employees in certain categories on the basis of their position and involvement in day-to-day decision making process and access to price sensitive information. All such transactions are required to be reported to the Company Secretary within four days of execution of the transaction with relevant details of purchase/ sale of shares. We also ensure that a copy of the annual report containing the agenda and notice of our AGM is dispatched to every shareholder at her/his registered address. This open period does not exceed 15 calendar days in each quarter from the date of announcement of the financial results. All transactions with related parties are carried out on an unbiased. and reports directly to the Chairman of the Audit Committee. ICI Pakistan supports the principles of free enterprise and fair competition. Annual General Meeting The company holds its annual general meeting of the shareholders in light of the Companies Ordinance. arms length basis as per formulas approved by the Board of Directors. After review by the Audit Committee the transactions are placed before the Board for their consideration and approval. While ‘Executives’ (as defined in the Code of Corporate Governance) some of whom may not be ‘Permanent Insiders’. the environment and anti-corruption. Code of Corporate Governance and our Articles of Association. Adequate Disclosure At ICI Pakistan. or any changes in accounting policies along with their financial impact. The policy paper which is circulated to all the employees of the Company from time to time. Listing Regulations. United Nations Global Compact (UNGC) ICI Pakistan remains committed in making the UNGC’s Ten Principles part of our strategy. The internal audit function which is mainly responsible for internal control. labor standards. A complete list of all related party transactions is compiled and submitted to the Audit Committee every quarter. We follow the Companies Ordinance and applicable IAS and IFRS (that’s International Accounting Standards and International Financial Reporting Standards). Although this requirement is no longer applicable to ICI Pakistan Limited as a result of delisting of its ultimate parent company from the New York stock exchange. holds 75. it is our endeavor to continue to be transparent in all our dealings.

Material Interests of Board Members Directors are required to disclose, at the time of appointment and on an annual basis the directorships or memberships they hold in other corporations. This is in pursuance with the Companies Ordinance, Section 214, which also requires them to disclose all material interests. We use this information to help us maintain an updated list of related parties. In case any conflict of interest arises, we refer the matter to the Board’s Audit Committee. Chief Executive Performance Criteria The performance of the Chief Executive is evaluated on a blend of quantitative ‘value’ and qualitative ‘values’ driven objectives. Value driven objectives relate to growth and financial performance of the company while values relate to the company’s performance on sustainability parameters. Underpinning both these objectives is the ‘how’ component which measures what processes and policies were implemented and complied with.

The Audit Committee comprises three directors all of whom are nonexecutive directors including the Chairman. The Chief Financial Officer and representatives of internal auditors attend the Committee meetings by invitation. The Audit Committee meets at least four times in a year. At least once a year, it meets the external auditors without the CFO or the internal auditors being present. It further meets at least once a year, the internal auditors without the CFO being present. The Audit Committee met five times during the year under review. Remuneration committee The Remuneration committee is a Sub-Committee of the Board and is responsible for reviewing the remuneration and benefits of the Chief Executive, executive directors and other senior managers. It also reviews the overall remuneration budget of the Company. The Committee consists of two non-executive directors. The Vice President Human Resources acts as the Secretary and the committee meets at least once a year. Banking Committee This Committee comprising two executive and one non-executive director has been constituted to approve matters relating to opening, closing and day to day operations of bank accounts. The resolutions passed by the Banking Committee are subsequently ratified by the Board. Share transfer committee The share transfer committee consists of two executive and one nonexecutive director. This committee approves registrations, transfers and transmission of shares. Resolutions passed by the Shares transfer committee are subsequently placed at Board meetings for ratification.

Committees of the Board Audit committee with brief terms of refernce The Audit Committee ensures that the Company has a sound system of internal financial and operational controls. It serves as ‘the eyes and the ears’ of the Board, assisting it in discharge of its fiduciary responsibilities. The Audit Committee reviews the periodical financial statements of the Company and announcements of results to the stock exchanges. One important responsibility of the Committee is to recommend to the Board the appointment of external auditors and facilitate the external audit and discuss with the external auditors major observations arising from interim and final audits. In doing so, the Committee also reviews the management letter issued by the external auditors and management’s response thereto. Besides this, risk management, compliance with relevant statutory requirements, review of legal matters which may significantly impact the financial statements, monitoring compliance with the best practices of corporate governance and investigating any violations thereof and ensuring coordination between internal and external auditors are also the main responsibilities of the Audit Committee. In carrying out its duties the Audit Committee has the authority to discuss any issue within its remit directly with the management, internal auditors or external auditors and may obtain outside legal or professional advice on it, if it considers necessary.

30 | Corporate Governance and Compliance | ICI Pakistan Limited Annual Report 2010

Risk Management The Board has an overall responsibility for the risk management process, incorporating risk management and internal control procedures. The Company’s documented and regularly reviewed procedures are designed to safeguard our assets, address risks facing the business, and ensure timely reporting to the Board and senior management. We maintain a clear organizational structure with defined delegation of authorities. Our senior management takes the day-today responsibility for implementation of procedures; ongoing risk monitoring; and effectiveness of controls. On an ongoing basis, we monitor risks faced by our various businesses to ensure pertinent control arrangements. Our risk and control procedures are supported through: Control Self Assessment Tool In 2010 the Control and Self Assessment Tool (CSAT) was introduced by AkzoNobel which assisted in the thorough assessment of controls to ensure a robust control structure. Senior management, along with the active involvement of each unit’s management, led this annual self assessment exercise in 2010. Existing controls were identified, assessed and documented with the help of the online tool. Weaknesses highlighted through this exercise were documented through action plans which clearly defined the corresponding actions to close the identified weaknesses in the system and processes. Our internal auditors, Ernst and Young, also tested the results of the CSAT exercise. Further, action plans are followed up rigorously to ensure that timely corrective action is implemented for the effective functioning of controls. Enterprise Risk Management The Enterprise Risk Management (ERM) methodology is part of AkzoNobel’s effort to clearly and structurally prioritize the main risks affecting our operations and organizations, in order to focus the company’s efforts on those risks that are not controlled in an acceptable

manner. For this purpose, ERM workshops were conducted across all our Businesses. The purpose and goal of the ERM workshops was to identify, assess and develop responses to the main risks that are affecting or could in the future affect ICI Pakistan Ltd in achieving its strategy and objectives (financial & non-financial). A cross-functional Business Executive Team identified a detailed list of overall business risk exposures. This exercise was performed by all businesses during 2010 and the main outcome of these workshops was the development of a current and complete risk profile upon which necessary action plans was developed to mitigate the main risks. Compliance Non-Financial and Financial Letter of Representation The Non-Financial Letter of Representation is the representation of management to its higher level of management and the group on how management has dealt with the delegated responsibility, has adhered to the rules and regulations and explains exceptions and deviations that occurred during the year. The respective Business and Function Heads submitted an annual representation to the Chief Executive. A consolidated version is sent to the Group. Internal and External Audit Our Corporate Audit function plays a key role in providing the management and the Board an objective view and reassurance of the effectiveness of the risk management and related control systems throughout the entity. The Board, through the Audit Committee, has reviewed the assessment of risks, internal and disclosure controls and procedures and suggested remedial actions where applicable. The role of the Audit Committee is to assist the Board in fulfilling their oversight responsibilities regarding the integrity of ICI Pakistan’s financial statements, risk management and internal control, compliance with legal and

regulatory requirements, the external auditors’ performance, qualifications and independence, and the performance of the internal audit function. The external auditors are appointed by the shareholders on a yearly basis at the annual general meeting on the recommendation of the board of directors. The partner in charge of our audit is rotated every five years as per the local regulations.

In this uncertain world, management of operational risks is a top priority. We have formal risk assessment processes in place to give reasonable assurances to our stakeholders and to safeguard our interests.
Zia U Syed
Corporate Compliance & Shared Services Manager

Major risk factors assessed
As a result of the ERM exercises, our risk profile emerged. In the matrix below, we share some of these risks along with the action being taken to mitigate such risks.

Internal Strategic • Change in brand identity due to change in ownership. Risk of failure to successfully implement and merge the transition strategy can result in contraction of brand equity leading to loss in sales volume especially in Paints business. The transition is minimized and risk is managed through active engagement process.

External • Risk of large scale cheap imports or dumping of soda ash in Pakistan by major international manufacturers, in view of oversupply in global soda ash industry owing to economic recession, resulting in domestic sales / market share going down. • Ad-hoc tariff adjustments on imports negatively impacting competitiveness of local producers like ourselves. • Risk of expansion/ productivity enhancement projects deliverables and business continuity being impacted by volatile law & order situation. One of the key uncertainties is the manner through which government policies evolve and their consistency. The Board and management endeavor to define and implement a clear strategy to overcome these strategic external risks and continuously seek dialogue with the policy makers through various business forums in the overall interest of the domestic industries.

Operational

• Dependence on a single source supplier. Inability to access raw materials may adversely influence the future results of the company.

• Risk of disruption of electricity and natural gas, because of unavailability of resources, can negatively impact business deliverables due to delay in local manufactured items/ material and due to reduction in Contribution Margin as a result of using expensive alternate fuels. Another principal uncertainty facing the company is the extent of economic downturn based on above uncontrollable factors. The Board and the management closely monitor the economic and market developments and keep in-touch with our partners in the value chain. The company is assessing the implementation of an alternate energy option in its Soda Ash business.

The company aims to use its purchasing power and long term relationships with the suppliers to ensure continuous availability of raw materials and safeguard their constant delivery at the best conditions. We have also acquired our own salt mine on lease to ensure availability of vital raw material for Soda Ash. • Risk of failure to develop the talents of our people in line with changing organizational needs impacting overall Company sustainability.

32 | Corporate Governance and Compliance | ICI Pakistan Limited Annual Report 2010

The company’s counterparty risk is sufficiently diversified with established limits for key customers. Credit reviews are regularly conducted to align the exposure in line with the changing conditions while remaining within the overall risk appetite of the company. using engagement tools such as performance and development appraisals and dialogs. External Financial • Risk of default in payments.Internal Operational continued The board and management put great emphasis on attracting. motivating and retaining staff. It’s a firm belief that without people we would not have a business and growing business means having to develop our people. leading to adverse financial impact on the company. ICI Pakistan Limited Annual Report 2010 | Corporate Governance and Compliance | 33 . in highly difficult economic conditions. educating. leadership identification and review as well as leadership development. employees surveys.

Best Corporate Report Award Our Annual Report 2009 was amongst the top five in the Chemicals and Fertilizers category of the ICAP Best Corporate Report Awards. Corporate Communications & Public Affairs March April August October November December 34 | Awards & achievements | ICI Pakistan Limited Annual Report 2010 . Hafsa Zubair Brand Manager. but we’re also proud of being recognized by external corporate and government bodies for our efforts in various areas.Awards & achievements We know that excellence speaks for itself. Calendar of major events Meetings Month February Event Board Meeting Audit Committee Meeting Remuneration Committee Meeting Annual General Meeting Board Meeting Audit Committee Meeting Board Meeting Audit Committee Meeting Board Meeting Audit Committee Meeting Long Service Awards Lahore HSE Management Meeting Succession Planning Meeting Long Service Awards Karachi Communication is not just another job. every day I have the chance to come up with new ideas and new ways of putting across to the world what we as a company are all about. PCP Recognition for Best Corporate Giving We received recognition from the Pakistan Center for Philanthropy (PCP) for being amongst the top corporate givers for 2010. 7th Annual Environment Excellence Award 2010 We were among the winners of the 2010 Environment Excellence Awards organized by Pakistan’s National Forum for Environment and Health (a non-profit affiliated with the UN Environmental Program). This is the fourth successive year that we have had the honor of winning the Best Corporate Report Award.

web meetings etc. Our people have talent. and the establishment of a remote DR site. We have undertaken expansion of the IT infrastructure with the latest technology to enable our people to collaborate more effectively through the use of tools for video conferencing.2011 IT re-organized as a central shared service function Consolidation and standardization of IT infrastructure. State of the art central data center ITO scheme introduced Heterogeneous IT infrastructure Capability gap In an increasingly technologydependant workplace. efficiencies and controls. delivering value. through innovative and cost effective IT solutions. Major Projects / Improvements Our focus was on delivering key strategic initiatives emanating from the 5-year strategy roadmap. was key to our strategy. Highlights of 2010 • Strategic initiative to implement SAP at the Paints business • Deploying McAfee End Point to enhance security of information assets • Remote Disaster Site completed to strengthen business continuity • Migration from Lotus to MS Outlook / SharePoint in line with global policies • Enabling smarter business collaboration through tools such as video conference. Future Outlook We will continue to look for opportunities and innovations that will enable our businesses to work smarter and faster. in order to help them achieve their Key Strategic Objectives.Technology developments Vision To proactively partner with the businesses and functions of ICI Pakistan. Leveraging on our current SAP platform. efficiency and controls. and an opportunity to consolidate and standardize. The security of our information assets is made more robust with the deployment of end point security. which are aimed at achieving best in class in terms of processes. This has been reflected in the delivery of very challenging projects. which has enabled our businesses to run efficiently on processes derived from industry best practices.2010 SAP Implemented in ICI Pakistan SAP roll out in Paints 2010 . continue focus on the development of our people. The migration of our e-mail and non-ERP applications to Microsoft Outlook and SharePoint is aimed at both. Finding solutions for today and new answers for tomorrow is the excitement of my job! Zain Zafar Alvi SAP Consultant . web meetings etc. thereby simplifying the IM landscape. creative drive and enthusiasm. Team The team is a blend of rich experience and youthful energy. We will need to leverage the investments that have been made in our applications. In line with this strategic thrust it was decided to implement SAP at Paints. Before 2004 Bespoke systems in ICI Pakistan BPCS at Paints De-centralize IT organization 2004 . the evermorphing need for improvement provides constant challenges. and ensure business continuity and sustainability are strengthened. alignment with the group.

We have been helping run this school for the past six years.000 hatchlings every season. in this regard. When we became engaged with the project. and raising general awareness by involving the public in regular beachcleaning efforts. educating the local population.Community investment Working to ensure a positive impact on our surrounding communities and society as a larger whole is something we as a company have focused on since our early days. Tehsil Gari Habibullah: This school was completely devastated in the 2005 earthquake. Health Pakistan’s large rural population is faced with a severe lack of adequate healthcare facilities. Tibbi Hariya School. saving 63. our employees participated in this drive and carpooled to work in 2010. WWF Pakistan carries out this project in collaboration with the City District Government of the port city of Karachi. which has several important marine turtle nesting beaches. Save the Turtle Project: Since 2005. We run and support a variety of initiatives. especially in localities near our operations.5 kg of carbon dioxide. We worked with local authorities and rebuilt the school in 2006 and since then have helped run it. We have also participated regularly in WWF’s annual Nature Carnival which educates children on environmental issues. consequently reducing our individual and collective carbon footprint. from primary to secondary level. This number has now increased to 35. a small coastal fishing village. Over six years we have helped contribute to the safe release of 210. Last year we upgraded the school. Government Girls’ Middle School. both internal and external. Government Boys’ Primary School. Reducing carbon emissions We launched a company-wide carpooling drive with the objective of reducing our carbon emissions. 36 | Community investment | ICI Pakistan Limited Annual Report 2010 . Education Education is a prime focus in a developing country like Pakistan. Institute of Behavioral Psychology (IBP): We have completed twenty years of support to IBP. Bararkot. we have supported the WWF's ‘Save the Turtle Project’. and we have tried through our efforts over the years to combat this serious problem. This program involves keeping nesting beaches free from litter and debris which endangers marine turtles. Kakapir: This school caters to children from the locality of Kakapir. Sheikhupura: For the past six years we have supported this school near our Polyester plant. and helps give them the tools to become productive members of society Environment Protecting and maintaining the environment is becoming a more critical need with every passing day. We support various schools throughout Pakistan. 2204 hatchlings were released each season.000 hatchlings. We work to promote development and sustainable investment in various areas of social and community welfare. which provides children with learning disabilities an education.

Students of the Bararkot school during a performance A patient being examined at our free LRBT eye camp A student of the Kakapir school Distributing relief goods to the flood survivors in the flooded areas LRBT Eye Clinics: Since 1991 our Soda Ash Business has run surgical eye camps in collaboration with LRBT. We now have initiated the same program for the community near our Polyester plant in Sheikhupura. Volunteer program Launched in 2009. providing free of cost treatment to local residents of the Khewra and Pind Dadan Khan area. to visiting hospitals and organizing relief efforts. our volunteer program has completed its second successful year. carry out these free eye checkups. Blood Donation Camps: In 2010 our Life Sciences Business initiated a country-wide blood donation drive in collaboration with the Fatimid Foundation. medical screenings and surgeries using the facilities at our Winnington Hospital. A team of LRBT ophthalmologists from LRBT Karachi. . with the first eye camp being held in November 2010 examining nearly 200 patients. Employees from across the company volunteered in a variety of initiatives ranging from taking students out on field trips. During this drive there were two separate blood donation camps organized in which over 200 employees donated blood. which is a non-profit organization that works to provide lifesaving hematology services to thalassemia patients.

the worst floods in Pakistan’s history left 20 million people displaced. crops. Muhammad Umar Mushtaq Production Manager. Pakistan’s devastating floods were traumatizing for the whole nation. Soda Ash 38 | Community investment | ICI Pakistan Limited Annual Report 2010 . schools and more. Medical camps Our Life Sciences team also set up 15 medical camps in flood-affected areas of Punjab and Khyber Pakhtoon Khuwa.Our volunteer team headed by Waqar A Malik visiting flood affected areas in Sukkur Flood Relief and Rehabilitation In 2010. At ICI Pakistan Limited we worked actively to provide relief to those affected by the floods across the country. along with water and basic medical and sanitation supplies.000 emergency care packs filled with immediate sustenance items such as dates and biscuits. Nine veterinary camps were also set up for flood affected livestock. and was a reward in itself. The volunteer work I did during the Flood Relief Campaign was one of the most satisfying experiences of my life. homes. We initiated an immediate emergency relief program through the ICI Pakistan Foundation to provide food and medical assistance to areas that were severely flooded and cut off. destroying livelihoods. Staff from our businesses all around Pakistan volunteered their time and helped put together 10.

The Foundation signed an agreement to build houses in Rahim Yar Khan. biscuits. we have initiated a Rehabilitation Program for flood affectees. milk. we were able to dispatch rations all over Pakistan and achieved our 'million meal' target. These packs contained sweets. The Foundation dispatched one million meals in the form of essential rations and clean drinking water to affected areas. juice. We are now reconstructing houses in collaboration with Karachi Relief Trust (KRT).Company-wide care pack drive A young flood survivor A flood survivor carrying a box of relief goods One of the schools that were painted during the flood relief efforts One million meals The ICI Pakistan Foundation contributed Rs. starting with six schools in Nowshera Kalan that were destroyed in the floods. By August end. and pencil cases with crayons etc. Relief camp visit ICI Pakistan Limited Volunteers also visited a relief camp set up and operated by the Pakistan Navy in Thatta. Our volunteers also donated 5 water filtration devices to the camp. coloring books. a kitchen and a front open area. a bathroom. Construction of our first model village is nearing completion. Each house constructed in the model village has two rooms. and distributed 400 specially prepared packs to children on the occasion of Eid. Rehabilitation After the success of our Relief Program. 36 million for flood relief. Sindh. Punjab and Munda Headworks in Khyber Pakhtun Khuwa. .

Health and safety of employees and contractors 3. Security of people and assets 4. 3. In all 187 managers from our five businesses and corporate offices attended these courses. Asset integrity and process safety 7.3% and 3% respectively on like to like basis as compared with 2009. Syed Iqbal Haider Group Technical Manager employees and supervised contractors. four Leading in HSE&S Courses and one Accident Investigation Workshop were conducted. Site environmental protection & pollution prevention Compliance to local regulatory requirements and codes of practice applicable in Pakistan is mandatory covering all our business and operational activities. the successful achievement of results require the active participation of every employee of the company. 4. Specialty Chemicals achieved 5.9 million man hours. Product stewardship 5. protection of environment and focus on sustainable development remains a cornerstone of our strategic decision-making. More than 95% employees participated in this pledge-making. The activities on this day were designed to enhance focus on employees’ safety and to reinvigorate the spirit which has helped maintain an excellent safety record over the years for ICI Pakistan. instructions. It comprises of seven elements each outlining the minimum requirements to meet our HSE&S policy. Environment & Security Beliefs and Principles At ICI Pakistan we remain committed to maintaining our leadership position as a Responsible Care Company.4 millions man hours and Life Sciences achieved 7. One of the key activities was recording of an individual safety pledge by each employee committing to do something positive to improve their own safety and those of around them. Strict and to the book 'Management of Change' 5. Implementation of Asset Integrity Plans and launch of Behavior Based Safety during the year further aim to improve our Health and Safety Performance moving forward. Behavior Based Safety. Continue recognizing. Environment and Security performance is the responsibility of ICI Pakistan’s Executive Board. HSE&S Management System Our HSE&S management system is at the heart of ICI Pakistan’s continuous improvement drive. Environment Energy consumption and CO2 emissions were lower by 5. 2. Polyester achieved 19. safety and environment an essential catalyst for future success. Soda Ash achieved 23. opportunities and competitive advantage through our HSE&S performance.Health. HSE&S Assurance Processes Our slogan for sustaining this excellent HSE record is simple: 'Keep Doing the Basics Right'. Adhering to all systems and procedures that ensure health and safety of people. Our Performance Health There was no reportable occupational illness to our employees or supervised contractors in 2010.3 million man hours without LTI (Lost Time Injury) to 2010 was all about fully comprehending the scope of our sustainability framework. supervision and training to operate and maintain our equipment and facilities in a “Fit for Purpose” state. The health and safety of our employees. 16% of our total training hours were spent on HSE training. two minor injuries were reported by our Paints site involving supervised contractors who resumed their jobs after treatment. Sabir Mahmood HSE & Training Manager. and in 2011 I look forward to taking on sustainable development in diverse areas such as HSE. Safety. Safety. It's great to be a part of a company that has a strong culture of sustainability and considers health. Safety During the year. Comprehensive Auditing of HSE Performance to progress issues. Emergency response and community awareness 6. Managing improvement 2. These elements are as follows: 1. plants and environment. Notable energy conservation initiatives included the Reverse Osmosis Water Plant at Soda Ash brought on line in Q4 2010. Ensuring that employees are provided information. Soda Ash . eco-efficient products and sustainable water management. ICI Pakistan celebrated Safety Day throughout the company on October 26. HSE&S Training Training on HSE&S remained a key focus during 2010. Effective Communication to promote HSE 6. We strive at all levels to create business value. 2010. reporting and correcting hazardous conditions and unsafe acts through our Learning Events Database system and of course. Five HSE&S Awareness Courses. The Safety performance at other sites remained well controlled. While the drive to sustain and continuously improve our Health. and some of these basics are: 1.4 million man hours. What happened in 2010 Safety Day Being part of the AkzoNobel group.

Safety Day was celebrated throughout the company on October 26 2010

Our Paints factory staff on Safety Day

Signing of the Safety Day banner

HSE&S Framework

Course Name HSE Awareness Course Leading in HSE (Non-Manufacturing & Manufacturing) Accident Investigation Workshop

No. of No of Sessions Participants 5 4 1 102 68 17

CP BBS Training Program Behavior Based Safety is a program for safety through people. An implementation team headed by the Corporate HSE Manager was formed. The team developed the training modules and devised strategy for the implementation soon after that. The training and follow-up sessions have been successfully completed and all businesses are BBS compliant. There were two reportable injuries (one Lost Time Injury and one Restricted Work Injury) in 2010.

The immense opportunity of learning in the world of AkzoNobel's HSE&S systems motivates me and keeps me excited about my job.
Muhammad Afaq
HSE & Training Manager, Polyester

ICI Pakistan Limited Annual Report 2010 | HSE&S | 41

Our Talent Factory
We believe that attraction, development and retention of talented people is just as important to the success of our Company as the development, manufacturing and sales of great products. For this reason we call ourselves the Talent Factory.
Our Talent Factory Ambition We strive to create a working environment that’s entrepreneurial and customer-driven, which consequently helps our employees to develop their potential and sharpen their skills. The result of this strategy is strong, talented leaders who can truly contribute to the sustainable growth of our business. Fulfilling the ambition Work Environment • Performance & Development Dialog (P&D Dialog) This is our global performance management and employee development program which is designed around our company values. For continuous improvement in performance, our employees and their supervisors focus on individual and team goals. Through regular dialog, review and candid feedback, our aim is to achieve better business results and reward our employees for their good work. The P&D Dialog makes our evaluation process simpler and more transparent. Through a documented set of activities and agreed results and behaviors, the goal is to give clear direction and support necessary to achieve desired outcomes. • Viewpoint Employee Engagement We believe employee engagement is a fundamental driver of business success. To make sure that our employees are involved and committed to their roles, we embarked on the engagement journey in 2010.

People are my inspiration, and working with them is the best part of my job
Zainab Khan
Human Resource Manager, Paints

Our first survey was very well received, where a staggering 94% of our employees participated, to have their say and make a difference. Through dedicated training sessions across all businesses, we have equipped our managers with knowledge and skills to take effective action within their teams to achieve engagement and subsequently, better business performance. Using global benchmarks, expert advice and highly committed managers, we want to create an environment where people enjoy their work and feel positive about it. • Diversity & Inclusion (D&I) We are taking steps to create a place where everyone is valued, where everyone counts, and where everyone can be the best at what they do. For us to make real progress on D&I we ensure everyone goes through the e-learning awareness module to clearly understand what it means and how we can bring about changes in the way we think and across our businesses. We want to create a work place where everyone has the opportunity to develop skills and talents consistent with our company values and objectives, a place where we harness the power of all the ways in which we are different.

I started the year in Marketing at the Polyester Business in Pakistan, and ended it as a Global Program Manager D&I, at the Head Office in Amsterdam. That's the thrill of this company – the sheer diversity of opportunities!
Bilal Salahuddin
Global Program Manager, Diversity & Inclusion Head Office, Amsterdam

I am proud to be part of a function that is integral in making my company an even better place to work.
Muddassir Khalid
Human Resource Manager, Polyester

Opportunities for Learning and Development The overarching objective of our learning and development cell is to create an enabling environment where all our employees have access to the necessary tools, techniques and desired exposure, that will help them to grow in the organization through professional learning. In 2010, over 27,000 man hours were dedicated to formal training across all businesses and functions. • Sustainability Leadership Program is designed to increase understanding of the environmental impact we have on our planet and the unique responsibilities we have as leaders to do something about it and to use those insights to the advantage of our businesses. • Impact is a general management program developed and run in partnership with INSEAD, France. It pays particular attention to our success factors ‘Create Customer Value’ and ‘Dare to Re-Invent’. This is our way to ensure that our managers are living examples of our Company values. Two of our managers attended the Impact program in 2010. • Octagon is a program that trains our managers on enterprise level thinking so they get a deeper understanding of different business perspectives. One of our senior managers attended Octagon in 2010 and was part of a global team of eight, working on a business project assigned by the Board of Management of AkzoNobel and top executives. • Executive Leadership Forum is a top leadership program where new executives across the globe are collectively trained by the top leadership team at AkzoNobel Headquarters. • Advanced Management Program is designed to help senior and middle managers in becoming more proficient in leading large and/or complex functional teams, positively influencing their work culture, develop leadership talent among their staff and create high performing teams. Approximately 90% of our relevant managers have now been certified in the AMP. • Management Essentials Program Through this program, we have certified over 70% of all our managers, by virtue of which they have acquired the necessary people development skills including techniques such as the ‘Situational Leadership’ that will ensure continuous capability development. • Core development We provide our employees the tools to help them meet customer expectations and position the company as customers' clear choice. Employees seeking functional learning opportunities committed to a total of over 8,000 man hours of training on these programs in 2010.

Cross-business and functional opportunities • Business Learning and growth opportunities for our employees our endless! Through the year we have made sure our talented employees capitalize on cross-functional and business opportunities that can only be made possible in an environment like ours. Our five diverse business units across the country, cater to virtually every industry in Pakistan. The result is a group of talented employees who have, over the years, not only acquired multi functional skills but also worked in different business segments. • International Assignments Global mobility of our employees plays an important role in our internationally managed business. International assignments help the Group with the transfer of critical skills, the development of key employees and of leadership talent. Building an industry-leading Talent Factory Every day our dedicated team of employees and managers across all businesses and functions position us closer to our longer term goal – "Building an industry-leading Talent Factory," by creating a work environment that enables greatness in our people, giving our company deeper dimensions.

we offer free consultancy at all our studios where our color ambassadors will help you transform your surroundings. We offer a color palette of more than 6000 colors. It is a form of expression for people and thereby weaves us closely to their lives. So the quest for excellence is not just in terms of functionality and technological advancements. At our Paints Business. this is what excites us… this is who we are! Everyone wants a more 'colorful' life and decorating our surroundings is one way of expressing this to ourselves and to others. just dial 0800 .icidulux. . This is what defines us. We have set up color studios across the country where you can simply walk in and be transported to a wonderful world of color.Dulux or visit us at www.. Paint is one of the most powerful and affordable tools for bringing a large color effect into a space.com.pk and let us add more color to your life. Along with this. So.. but how we can affect and improve lives with everything we do. we take this responsibility very seriously and have identified the purpose of our business as ‘Adding color to people’s lives’.Adding color to people’s lives The coatings industry is more than just a business.

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celebrate successes together and support each other in the drive for Tomorrow’s Answers Today™. ICI Paintex is our value for money brand that caters to consumers who aspire to bring home results that offer value at its best. Customer comfort and convenience is the need of the hour. called K’Archcitecture. Bashar Rasheed Supply Chain Manager K’Archcitecture ICI Dulux sponsored a compilation of photo essays applauding the architectural heritage of the city of Karachi. not colleagues. technical assistance and paint previews at the customer's doorstep. Painter Training Painters represent an extremely key group of influencers.pk Mobile Color Solutions Today’s customer is more informed and involved in the paint process. A significant issue in the local market is that painters have little or no formal training. To locate ICI Dulux Point of Sale Tinting near you simply log on to www. trouble shooting. ICI Dulux Point of Sale Tinting (POST) offers over 2000 shades available all over Pakistan at designated dealer outlets.icidulux. Customer Connectivity & Engagement An ICI Dulux Innovation The paint category in Pakistan is rapidly maturing and consumers are becoming more conscious and aware of their needs. we initiated a pilot program with the Construction Technology Training Institute (CTTI) Islamabad. ICI Dulux appreciates the new attitude and intends to set new precedents. ICI Dulux Mobile Color Solution Center visited premium residential and commercial localities in Lahore. Our Paints team in collaboration with CTTI is training building painters in paint application techniques. To formalize the trade and bring about more professionalism.com. ICI Dulux has always been at the forefront of innovation through top quality products and cutting edge technology. Karachi and Islamabad to provide services such as color consultancy. contributing more to my business and spreading more color! Saad Masood Khan Assistant Brand Manager . Some of the best friends I've made in life are people who work with me every day. interior decoration advice.Paints Decorative Products Our two brands. We have a direct network that spans the country reaching millions of consumers across Pakistan. color selection and good safety and environmental practices. time-tested partnerships. resulting in a lack of technical knowledge and standardized practices. In 2011. Architect engagement events We hosted grand evenings at the historic Barood Khana Haveli in Lahore and at the Mohatta Palace in Karachi as part of our architect engagement plan. These events reiterated our commitment to our stakeholders and promised to strengthen existing. Color consistency and quality is our forte and our customers can be confident that the color they bring home is exactly what they want. ICI Dulux is our flagship brand that has earned its reputation based on its consistent ability to outperform both competitors and the expectations of its consumers with its product quality and innovation (products and services). I look forward to working with more zeal. and Paintex to the mid and low tiers. The best part of my job is that I am surrounded by friends. interacting with more diversity. ICI Dulux and Paintex each have a complete product portfolio with ICI Dulux catering to the premium and superpremium tiers. Eminent architects and industrial partners attended these events featuring leading musicians from Pakistan’s film industry. Trade is passed from master to student. The book is an overview of Karachi’s rich architecture seen through the lenses of some of Pakistan’s most distinguished photographers. ICI Dulux is the pioneer of the Tinting System in Pakistan under the label of ICI Dulux Color Solutions.

Year of Excellence in Service’ for internal and external customers. Product Development . which strengthen my skills and challenge me. Cycle time is a measure of how quickly batches are being manufactured (the lower the better) Challenges This year we continued to experience the impact of the global economic slowdown resulting in reduced consumer buying power. Global Color Week The global ambition for the Paints Businesses of AkzoNobel is "Adding Color to People's Lives". newspapers and outdoor exemplified an assortment of colorful themes nationwide. What excites me and keeps me motivated are the diverse responsibilities given to me over a period of 8 years. we had our first-ever Global Color Week. Fawad Ali Asif Mirza Regional Sales Manager Center Global Color Week . and several customercentric activities that will forge robust. This year we saw improved volumes despite slowdown in the construction industry and lengthening of the maintenance paint cycle. at 96% (for Decorative business during November 2010). radio. we set the following records: • Best ever Right First Time (RFT). color consultancy/interior decoration advice service and color studios. promote Color Futures – the global style and transform our communities by sharing our exciting color range. wall putty and sealer. and reinforced the ICI Dulux brand personality as the leading innovative one-stop shop decorative solution provider in Pakistan. The ICI Paintex portfolio now offers interior and exterior emulsion. The week was dedicated to learning what ‘adding color’ is about and experiencing the transformative power of paint. RFT is a measure of manufacturing process control – the higher the better • Best ever right first time at 98% (for Coatings business during July.ICI Dulux participates in the ArchAsia 2010 Expo ICI Dulux architect engagement event held at a historic location in Lahore Employees' children participate in Global Color Week drawing competition Deco employees adding color to their workspaces during Global Color Week What happened in Deco this year ICI Dulux Thematic Campaign A Theme for Every Dream This campaign centered on the tagline ‘A Theme for Every Dream’. and in line with this. new product developments. with the launch of ‘YES . The objectives of this event were to create Color Awareness. Operational Excellence During 2010. All communication platforms including television. October & November 2010) • Best ever cycle time at 15 hours (for Decorative business during November 2010). The campaign subtly introduced AkzoNobel as the new parent company and highlighted ICI Dulux groundbreaking services such as Customer contact center (0800-Dulux). enamel. Future outlook The year 2011 is expected to witness a gradual recovery after the economic slow down with the business geared towards focusing on AkzoNobel’s core value. Business Performance We have been market leaders for over two decades and enjoy a strong equity. sustainable and long-lasting relationships. With these launches complete before painting season this year we look forward to serving a broader customer base thereby resulting in a higher market presence.ICI Paintex range expansion We introduced new products into the ICI Paintex range with the launch of ICI Paintex Ultra Prime and ICI Paintex Duraguard. ‘Focusing on the Customer’s Future First’.

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training and support: a powerful formula for perfect results and high bodyshop profitability. . together with services. Based on the scans. including process analysis. we gave suggestions on how to improve each of these parameters. Enabling bodyshop profitability has always been at the heart of the Sikkens philosophy.Our focus: your success Achieving a perfect repair is one thing. this is what drives us. we worked towards a common goal – increasing bodyshop profitability and sustainability. Helping customers run their business with outstanding success – today. By combining our passion and expertise with the ambition and knowledge of our customers. tomorrow and beyond. this is how we do our business. We provided tools allowing bodyshops to benchmark their performance helping them understand how this affects their profitability. but creating a smooth and efficient repair process is another. When it comes to productivity and efficiency you need more than just good paint. the focus of our team in 2010 was on improving bodyshop profitability. this is our philosophy. Scans of each setup were carried out to allow a review of overall functioning. In a recession hit-market where managing cost remains a priority for customers. as well as advice on how to monitor and quantify results. cycle time and equipment. We offer the finest products on the market.

A focus on improving customer economics through process and efficiency initiatives helped the business gain market share to deliver a 20% increase in sales volumes. commitment and loyalty for AkzoNobel’s Automotive Coating brands in the market. and a strong focus on costs (a mainstay characteristic of the unorganized sector). inconsistent workflows and an increased incidence of down-trading. however. NC based color technology and thinners. particularly post the floods in Q3. the business also made notable strides in getting Pakistan recognized as a player in the CV export markets – providing extensive technical support and color solutions to Pakistan’s first export bus project and the refurbishment of Vespa Scooters for export to the Italian market. cost and cash helped capitalize on this situation and reinvent the image. 72% of the market is still represented by Automotive Enamels.Paints Automotive & Aerospace Coatings Market Overview The automotive coatings market size is estimated at 3 million liters. a focus on customers. metallic or pearl finish. DynaCoat is based on the mixing machine concept that allows bodyshops and retailers to accurately deliver any local and international color – be it solid.2 million road-going cars. This situation is further exacerbated by a lack of technical education and awareness at the end user level. coupled with extensive technical support prompting switchover from established brands. With this limited focus on quality. while a focus on cash provided the business with insulation against the liquidity pressures commonplace in the market. DynaCoat offers a complete range of quality refinish solutions aimed at the market with lower levels of technological advancement.helping to bridge the gap between the customer and my team. I relive the reasons I joined ICI in the first place. Pakistan’s organized automotive coatings market is still in its nascent stages. while maintaining a low complexity of stock. driven by poor road infrastructure and an aging car park have prompted strong growth of the unorganized sector over the last ten years. saw Sikkens gaining acceptance and market share at more than 75% of the organized vehicle repair operations across Pakistan. prompting me to explore and expand the boundaries of my own potential. Meanwhile. For our business. Even after 10 years with the company. Apart from the above-mentioned financial achievements. it's one of the few companies where you can be part of a team dedicated to redrafting the fundamentals of a business by investing resources in the downstream industry instead of only investing in the brand. Product We launched the Sikkens Automotive Coatings portfolio in Pakistan at the end of 2008. The DynaCoat product assortment is supplemented by professional color documentation and tinting formula’s especially developed for the mid market in car repair. however. Three Japanese car brands dominate the market. Syed Imran Qutab Marketing Manager Post the successful launch of Sikkens. One of the best things about my job is that I manage change . Collaborative programs with various OEM partners. Overall. worth approximately Rs. low incomes and a high accident ratio. 850 million and represented by 2. Business Performance An inconsistent year for automotive refinish activities in Pakistan. 2010 was marked by weakening consumer confidence. Each day is therefore a new challenge. Specially developed for the mid market in car repair. with no formal approval system for automotive coatings to allow their after-sales network to exercise cost independence. Aneka Fahima Sufi Assistant Manager Marketing Services Customer Engagement The thrust of our efforts is to improve bodyshop profitability by developing customized service programs for bodyshop owners. supported extensively by value added services aimed at improving downstream bodyshop processes and profitability. less than 18% of the market is represented by Top and Mid-tier paints (two-component technology). we introduced DynaCoat in 2010. We have developed different programs for different customer categories: .

To address this concern. Toyota: For Toyota we developed technical training programs aimed at improving body shop profitability Honda: At Honda we conducted week-long on-the-job training sessions at each dealership Suzuki: With Suzuki we carried out regional training for service managers and paint shop managers. resulting in a lack of technical knowledge and standardized practices. process development. Indus Motors. Painters: The most significant issue in the local market is that painters have little or no formal training. transcending the bodyshop. remains the biggest challenge. a balanced mix of technical as well as commercial modules. the penetration of the unorganized market. The first batch to graduate was provided a 6 month internship with these dealerships. we initiated a pilot program with one of our OEM customers. the business plans to continue focusing on improving the overall profitability of its customers. Islamabad and Lahore. actual costs of repair. with the expansion of the Painter Vocational Training program from its pilot stage to larger programs in Karachi. in collaboration with St Patrick’s Technical School. Challenges Within the vehicle repair industry. Future outlook In addition to exploring opportunities to further expand our product and customer portfolio. players within this segment are focused on finding the lowest prices for paints with little concern for quality. with stretched responsibilities and targets. sustainability. we focused on process development and helped them upgrade the service levels of their after-sales service programs. we suggested improvements as well as providing tools to assist bodyshops to benchmark and enhance their performance and profitability.The Automotive team during the color-matching process Our automotive coatings being applied to a vehicle OEM: For our OEM customers. offering a technical training diploma. to aid customers in areas of sales development. material management. As high competition and profitability of operations remains a common issue across this segment. progress to end-user development programs shall also be made. An over-whelming need exists to help this sector transition from “price-shopping” and reinforce a culture focused on cost reduction based on technological advancement. Most painters enter the profession as apprentices and the trade is passed from master to student. After comprehensive analysis of their overall functioning. A Vehicle Repair mid market B Vehicle Repair Premium C Commercial Vehicle 76 23 1 The business has taken on this challenge with the launch of its mid-market training programs. financial optimization and marketing effectiveness. This training focused on paint and color matching Bodyshops: For bodyshops the target was to improve cost and profitability. a segment with the largest market share. Further. Shaukat Ali Regional Sales Manager ICI Pakistan Limited Annual Report 2010 | Paints | 51 . targeting the improvement of awareness and education across a wide cross section of stake-holders in this segment. quality consciousness and process optimization. This program trains students on body shop processes and paint techniques. process efficiency or waste. 2011 promises an even greater thrill to excel. Future plans include the launching of formalized services packages. We developed and executed the program in entirety from developing syllabi and manuals to providing trainers. While 2010 delivered a lot of excitement through the opportunity to manage and exceed targets.

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we were able to offer our customers a high quality coating solution that is made in Pakistan. and after successfully completing the testing phase. and for many years have mainly used Japan-based paint brands. To develop our business in this market. By offering added benefits to the client such as assured availability of supplies and technical services.On the surface When you look at a new car. with benefits comparable to any world class products. More than 150 vehicles have been coated with our topcoats at Indus Motor Company and additionally we have secured an order for plastic white topcoat. one of the first things you notice is the finish. which managed to make breakthroughs into the Japanese passenger vehicle segment. Currently over 70 vehicles from Pak Suzuki Motor Company coated with our locally-developed white top coat have been rolled out in the market for feedback and evaluation purposes. and its durability and aesthetic appeal are of great importance. This achievement was further built upon by our Sales Team. World class car manufacturers including our customers Pak Suzuki Motor Company and Indus Motor Company. we improved our value proposition. while making our business more sustainable. . On any vehicle. the coating is the most visible part of the product. These significant developments will provide us ground to further expand our share in the top coats segment at both IMC and PSMC. our R&D team worked hard to develop new coatings of high quality and durability. have stringent quality requirements.

and we have begun actively servicing the needs of this market with leading players like DS Motors. Results showed that our service levels are improving. we provided training to the line staff (mostly comprising of painters) at Atlas Honda. having increased from 79 % in February to 81% in October. one of the largest motorcycle and three-wheeler manufacturers in Hyderabad. both in the high and low-tier segments. Customer Focus Atlas Honda Customer Service Improvement Sharing our best practices benefits our customers. Dawood Yamaha and Suzuki in our motorcycle portfolio. Our focus has been high in this segment. road line markings for the Lahore-Islamabad Motorway and many others. and Millat and Al Ghazi in the tractor segment. motorcycles. tank lining at Pakistan Refinery. Hino and Nissan in the commercial vehicle segment. but also taught our customers the efficient use of painting techniques and equipments as well as health. We also offer products in the appliances and the projects segment. AHL. Pak Suzuki Motor Company (PSMC) and Indus Motor Company (IMC) in the passenger car segment. and this segment has significant volume. we held two customer satisfaction surveys. This not only created a competitive edge. Along with these efforts. To measure how successfully we meet their needs. preferring to use our products and services. Our customers are major automotive manufacturers. Benazir International Airport. To improve things further. We strive to continue to enhance our service levels for the benefit of our customer. Millat Tractors Service level improvements In recent years numerous initiatives have been undertaken to address the changing requirements of Millat Tractors Limited (MTL). Coming to work each day knowing that there's a world of opportunities just waiting to be seized. and working with our teams to capitalize on these in better. such as expansion of the Engro plant. a key customer for many years. and to ensure activities were efficiently managed. Business Development Hyderabad Motorcycle Market Motorcycles are a primary means of transport in the rural areas of Pakistan. this year we took the initiative of providing more in-depth customer support. Our relationship with some of these customers extends beyond two decades. We also cater to major government and private projects in the country. Measuring customer satisfaction Keeping our customers engaged and satisfied is one of the mainstays of our business. Naqvi Marketing Manager . line audits and on job trainings for paint line staff are also conducted.Paints Industrial Market Overview We operate in a diversified market and our vast product range provides solutions for passenger cars. safety and environmental awareness. commercial vehicles and tractors. A full-time dedicated resource was deployed at the MTL production line to carry out pretreatment and paint line testing daily. It is also a challenging environment as Hyderabad’s huge motorcycle market has many manufacturers operating in it. MTL now has on-line technical service readily available to attend to any issue that arises. and so in 2010. A laboratory was also set up at the site where solutions are prepared at any time. more sustainable ways is the exciting part of my job! Mohsin R.

We plan to explore packaging coatings after a successful trial program in 2010. New automotive line uses Nihon Parkerizing Master Motors Corporation. The first sale was made to the Karachi Shipyard & Engineering Works to coat Pakistan Navy’s Special Utility Tanker Ships. Challenges While we continued our focus on exploring new markets and customizing solutions for our existing base. abrasion resistant. Future outlook We aim to continue our focus on providing new and innovative solutions and introducing the portfolio AkzoNobel offers.The Industrial Team with OEM manufacturers Indus Motor Company This unprecedented success allowed us to establish ourselves in place of previous brands at DS Motors in particular and in the motorcycle segment in Hyderabad at large. Interseal is a superior coating solution which will be applied in highly flammable zones and will significantly increase time between maintenance activities. not only for their upcoming Japanese brand but also for their Chinese brand. Lodhi Salman Ahmed Mohsin R. was in the process of acquiring Mitsubishi licensing in Pakistan and required pre-treatment metal sheets of international standards. It offers outstanding chemical resistance with quick turnaround for service and also high temperature resistance. Passenger cars and tractors performed well. Ceilcote This year we closed our first ever sale of AkzoNobel’s Ceilcote Flakeline coatings in Pakistan. over the past few years. We intend to continue our efforts to secure other Chinese manufacturers in this division and become the leading suppliers in this target market. Ceilcote Flakeline is a flake filled novolac vinyl ester coating which exhibits excellent resistance to both aliphatic and aromatic organic solvents and to concentrated organic and inorganic acids. self polishing copolymer (SPC) antifouling system with patented Copper Acrylate technology as well as the Intershield range which is a light colored. International brand launched We successfully closed our first sale of AkzoNobel’s ‘International’ brand in the Marine Coatings segment. Our white top coat for plastic parts was also approved for application on more than 100 vehicles at Indus Motor Corporation for their leading brand. Seeing this as an opportunity for business development we succeeded in getting them to use Nihon Parkerizing technology for their pretreatment. These highly specialized coatings were sold to Lotte Pakistan for their chemical storage tanks. which is a high performance. Ceilcote is geared towards clients that are looking for longevity in corrosion protection or are storing extremely corrosive materials. It is expected that this business will add to our organic growth outlook in 2011. More than 70 vehicles have been coated with our white top coat and have been rolled out into the market From left Sajjad A. however in the second half of the year tractor and motorcycle sales were affected because of the floods. These include highly specialized paints such as the Intersmooth range. for evaluation and feedback. Tributyltin (TBT) free. Naqvi Muhammed Iqbal Asgher Sheraz Samiullah Qureshi Shahid Islam Abdul Rehman Aleem ICI Pakistan Limited Annual Report 2010 | Paints | 55 . AkzoNobel’s Interseal used at Pakistan Refinery Limited Pakistan Refinery Limited (PRL) is now the first refinery in Pakistan to be using AkzoNobel’s surface Tolerant Epoxy Interseal 670HS. aluminum pure epoxy coating giving excellent long term anticorrosive protection and low temperature application capability. a Chinese truck manufacturer. Breaking into the OEM Market Focused efforts by our R&D and commercial teams have led to the first order for the line run for locally produced white top coats at Pakistan Suzuki (PSMC). the year 2010 was challenging. Corolla. A general economic slowdown was experienced with fewer new projects than before.

The product was then widely introduced in the market and trials were conducted at over 35 customer sites. to try and reduce our Off Specification Output (OSO). . Today. After extensive technical and commercial work. Product Salvage has become a sustainable variant in the Terylene line that will continue to support our business and serve customers. This initiative also made it easier for us to build stocks at the time of shutdown enabling effective inventory management for shutdown time. The concept of Product Salvage developed when. and this is exactly what we have accomplished with Product Salvage. Polyester Fiber. as part of our continued sustainability focus we decided in 2008. every little bit counts. While the development of this product was successful.Going green In a world of limited resources. we had struggled to establish a sustainable customer base for it. We make ourselves more sustainable when we are able to achieve more by consuming less. We did this by reducing the cost of production (by increasing the ratio of OSO used). Product Salvage helped deliver significant benefits. both to our business and to our customers in the form of improved raw material efficiency at our plant as well as improved profitability for us and our customers. it was agreed that the most sustainable way to do so was to recycle OSO into our primary product. we re-evaluated our strategy to make the venture more sustainable and profitable. and by creating a value proposition for our customers. with its improved cost and large customer base. By the end of Q3 we were able to sell and achieve the product potential. In 2010 therefore.

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which in turn accounts for 60% of total exports. (representing an investment of USD 500 million plus in Pakistan). further bolstered by healthy downstream demand. Hystorically. market conditions have been strong and there has been a growth in the industry. which is then woven into fabric used to manufacture goods such as clothing. and forms the backbone of the domestic textile industry. The two major raw materials in PSF production are Pure Terephathalic Acid (PTA) and Mono-Ethylene Glycol (MEG). especially in China. create and innovate. Faisal Akhtar Business Manager The Polyester Staple Fiber Chain The PSF industry in Pakistan is the fourth largest in Asia. PSF is a key value adder as more than 50% of PSF consumed locally is eventually exported in one form or the other. Poor cotton crops in China and Pakistan and high demand also drove cotton prices to all time highs making PSF highly attractive in comparison and fuelling demand further. In the past.Polyester My company is a great place to work. and makes me feel more fulfilled. and home textile products. creative and productive in my job. This encourages a more disciplined and professional approach in the industry's future operation. there has also been a rationalization of the less efficient spinning industry. The best part of my job is the excitement of applying and developing my skills to do something new and challenging every day. reached historical high price levels on the back of strong demand and surging oil and feedstock costs. Accordingly the price of PSF rose regionally and locally. Shamyl Uppal E&I Support Manager 58 | Polyester | ICI Pakistan Limited Annual Report 2010 . strong domestic competition and thin margins caused domestic manufacturers including ICI Pakistan Limited to focus on efficiency improvement and cost reduction initiatives resulting in an industry which is highly efficient compared to global benchmarks. A key positive aspect of this was that less efficient units closed down with only medium to large-scale. Market Overview PTA and MEG are derivates of crude oil and in 2010. robust spinning mills remaing operational. energy-efficient. Despite challenging environmental and economic situations. with the freedom of doing it my own way. PSF is sold to the spinning industry where it is spun into yarn.

although the general rule is that the longer the cut-length of the fiber. Development work by our technical services has resulted in the removal of technical difficulties at mills and hence spinning mills are expected to increase their productivity by 12% with the use of this fiber. international and domestic cotton prices are anticipated to remain at high levels due to production estimates being lower than previously forecasted and uncertainty regarding exports of Indian Cotton. Overall the cost of doing business in Pakistan escalated. technical difficulties at the mills limit the length to 51mm. In addition. Domestic market conditions are expected to remain healthy and prices to stay stable to firm. the business achieved its highest ever sales and sold an impressive 129. Amal Piracha Commercial Trainee Officer . lower margins and increasing competitiveness have all compelled spinning mills to look for ways to become more efficient and cost effective in a sustainable way. However. Traditionally fiber lengths ranging from 32mm to 51mm have been used in the spinning industry. the higher its productivity. energy shortages and the recent rise in fiber and feedstock costs. this innovation has resulted in improved raw material efficiencies and greater profitability for both our business and our customers. thanks to this innovative new product.356 MT more than sales in 2009. Polyester demand in Asia is showing no signs of stagnation and monetary measures in China are expected to restrict speculation in an attempt to reduce price volatility. Blend economics has continued to favor PSF largely because of the gap between cotton and polyester prices caused by a cotton supply shortage. increasing production costs. Business Development Product Salvage We successfully recycled our Off Specification Output product (OSO) into a viable. Extra Long Fiber – Enhanced productivity Recently. Fiber cut-length was an area we decided to explore. which is very motivating. Future outlook Going forward. However. the business was able to partly offset difficulties created due to energy and power shortages.737 MT of PSF which was 6. The people I work with support and encourage my personal and professional development. our customers were greatly affected by lack of power and gas availability affecting continuity of their operations. What is worth seeing is the consumer's ability to pay the high prices of value-added fabrics.Off Specification Output product A picnic with the special children visiting our Polyester site The Continuous Process batch line Polyester bales in the warehouse Lorem Ipsum Etue Enisit Faciliquis Ullandio. Challenges High inflation and the overall depressed economic situation coupled with energy crisis in the country were our main challenges. We hope to also enhance our fiber sales on a sustainable basis. Consequently. Business Performance Market conditions for the textile industry held strong throughout most of the year despite the flood crisis. Due to the Co-Gen project commissioned in 2008. Dubbed Product Salvage. feedstock prices are forecast to be firm due to tightness in PTA and MEG supplies and strong downstream demand.OSO . profitable product. and my ideas are valued.

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we are a lifeline of sorts for the remote rural community of Khewra where our operations are based. to the adjoining areas.000 tons. These initiatives in the health. . education and environment sectors extend from Khewra and Pind Dadan Khan. our Soda Ash business is about a lot more than just our annual production capacity of 350. Today we continue to be the market leaders for this key ingredient and just as importantly. sleepy small town nestled amongst the salt range in the 1940’s when we first started operations. In addition. We may be the country’s largest producers of Soda Ash. but so is the bigger picture. we run various community welfare and development initiatives. However. It has flourished in to a developed center with economic activity and improved lifestyle for its inhabitants. We did this initially by providing employment to a large number of residents of the impoverished localities of Khewra and Pind Dadan Khan. helping to raise the living standards of the community. at a time when Pakistan was yet to come into existence. we also continuously worked for the betterment of our community. Khewra today is vastly different from the barren. Our business started out with a production capacity of 18.Decades of Development The bottom line is important to us. Some of our company’s major community and sustainability initiatives over the decades are based here. Generations have progressed and gone on to change their lives for the better. Over the decades while we built our plant capacity to a world class level based on the most modern equipment.000 tons per annum in 1944. We have firm belief that true development for any business is only possible when all those associated with it develop alongside. and this is an achievement we are certainly proud of.

988 outpatients have also been treated. Education Winnington School The Winnington School is located within our plant premises and provides quality education to our employees' children as well as to children from the local community. These clinics are held over three days each month and 11. 5. paper. including glass (both for construction and domestic purposes). and also as an ingredient in several industries including poultry/cattle feed. 116. textiles. We actively contribute to the uplift of the community where we operate by providing employment to a large number of people directly or indirectly. and from detergents to textiles. much appreciated by the local community. Our hospital team also provides a vital immunization service in accordance with government immunization programs in the area. and in line with our value ‘Focusing on our customer’s future first’. which given the remote location of Khewra. chemicals and textile industries Dense Soda Ash: Used mainly as a raw material in the glass and sodium silicate industries Refined Sodium Bicarbonate: Used as baking soda. sodium silicate. we have conducted Surgical Eye Clinic programs in collaboration with the Layton Rehmatullah Benevolent Trust (LRBT) every month. soda ash remains a main component in a wide range of end products. Our longest-running healthcare initiative. Monthly Eye Clinics Since 1991. Aamir Chaudhry National Sales Manager . we are proud to provide customer-centric solutions. and includes OPD consultations as well as major and minor surgeries and refractions. Apart from benefiting directly through association with ICI Pakistan. Light Soda Ash: Used as a raw material in detergents. in addition to being a major source of employment and income for a significant number of residents. transporters etc who have flourished through their association with our business. Rizwan Aziez Human Resource Manager Business Overview The soda ash market in Pakistan continues to evolve. we have run several long-standing community welfare and development initiatives to benefit the people. the local community also benefits from the indirect effect on the local economy through an increasing number of contractors. soaps. I enjoy the challenges of providing customized solutions for each of them.Soda Ash We enter 2011 with exciting goals of building employee engagement and a high performance culture. We also have a scholarship program for deserving children in the community where we provide financial assistance enabling them to pursue their academics. Eleven water supply points installed around our works provide approximately 23. We try to help the local community by supplying this essential need free of charge. is a highly valued service. paper. Along with this. soap. Some of our key assets are the long-term relationships with our customers. and we know that our decades of experience in the Soda Ash Business are an asset in the face of changing market dynamics. one of the few institutions offering post-matriculate studies. Contribution to economy We mainly utilize indigenous raw materials in our production and save hundreds of millions in foreign exchange for the country through import substitution of an extremely important industrial raw material. Patients operated on for cataract problems are implanted with free intra-ocular lenses (IOLs. Community Development Over the years.) Infrastructural Development & Support Drinking Water for Khewra Like many other areas in the salt range. We currently manufacture two different varieties of Soda Ash and food grade Refined Sodium Bicarbonate which is a derivative of Soda Ash. We are also recognized as one of the largest tax payers in the area and have contributed about Rs. In addition the Business is helping the local government to develop a long term water supply scheme At Soda Ash. Approximately 300 patients are catered to by our hospital every month.6 billion to the national exchequer during the last decade alone.000 gallons of clean drinking water to the residents of Khewra and the vicinity every day. this eye camp is open to the public.992 major and minor surgeries and 15. by delivering consistently high quality products on time whenever the customer needs them. we have been assisting Al-Beirooni College. this hospital provides a free outpatient facility to the local community. leather tanning and the textile industry To sum up. detergents and household cleaners. In addition. we have customers from diverse industries from glass to paper. We also extend support to local government run schools in the area with the aim of improving the facilities and quality of education. Most of our employees are residents of this relatively impoverished and water starved rural area of Khewra and Pind Dadan Khan with very little alternate employment opportunities. clean drinking water is an extremely scarce resource in and around Khewra as the underground water is brackish with high salinity due to the proximity of salt range. Health Program Outpatient care at Winnington Hospital Located within our Khewra premises.292 refractions have been carried out till year end 2010.

resultantly the full year market growth is expected to be about 4-5%. I have had the unique privilege of working in three businesses in as many years. My current position in the Soda Ash Business motivates the process engineer and the scientist in me to find new solutions to challenges every day. where our free eye camps are held every month Students of the Winnington School during the Flood Relief Campaign The newly repainted Khewra railway station Project Green at our Soda Ash site for the area through financial assistance and administrative support. This is further aggravated by dumping of soda ash into Pakistan. Khewra Railway Station We have undertaken the upkeep and maintenance of the Khewra Railway Station to demonstrate our commitment to the town and the people who use this facility. Business operations were severely impacted by gas supply curtailment to the works and the number of equivalent zero gas days increased from 60 in 2009 to 143 in 2010. seeking an investigation into this practice and initiation of investigation is expected in the near future. Business Development Although the main focus of our Business remains the domestic market in Pakistan. Dumping of Soda Ash into Pakistan from certain countries also remains a key concern and your Company has filed an anti-dumping application with the National Tariff Commission. In addition liquidity issues being faced by industrial customers are becoming another area of concern. exports had to be restricted recently due to the energy crisis in the country as gas curtailment impacts our production. On account of excessive gas outages. We are also looking at developing a long term solution to mitigate the adverse affects of worsening gas outages in the coming years. primarily on the back of exports to various countries in the region as the business successfully established itself in the export market. All major industrial consumers of soda ash. The consistent acceptance of our product in international markets reaffirms our status as a reliable supplier of high quality soda ash. unlike previous years when curtailment was done during winter months only. stitching. While the business has a number of opportunities available to increase volumes. Domestic Soda Ash market remained affected as downstream industrial activity was severely affected by the unprecedented gas curtailments in 2010 which persisted throughout the year. In addition we regularly undertake free maintenance and upkeep of the areas adjoining our works. The focus throughout the year was on optimizing of operational efficiencies and strict cost control in all areas. leading to a decline in their consumption of soda ash. However. Going forward gas curtailments are expected to increase and will keep the industrial activity depressed. Operating result was 13 percent lower than 2009 as the impact of higher revenue was dragged down by the higher usage and higher cost of expensive furnace oil during gas outages. Young girls from the community flock to the center enrolling the six month long course the center offers. during the last two years we have successfully established our products in the export markets to earn foreign exchange for the country. Business Performance Global Soda Ash demand witnessed some recovery in 2010 based on higher consumption in emerging markets China. The domestic market thus continues to remain in an over supply situation as domestic production capacity is significantly higher than domestic demand. Many of those trained have gone on to establish similar small centers which are running successfully. Demand during Q4 has however witnessed a slight decrease due to some decline in China. embroidery etc to young girls from the community. Skill Development (Vocational Training Center) Set up in 1989. Overall sales volumes during the year were higher by 12 percent compared to 2009. our Ladies Vocational Center in Khewra imparts valuable self employment skills like knitting. The overall gas supply was at an average 25% lower than last year and caused major disruptions across all industries. India and Brazil during the first three quarters of the year. and is managed by volunteers from the families of our Soda Ash team based in Khewra. which benefitted from a growth in the unorganized detergent sector. which is adversely affecting the domestic industry. the business had to incur an additional cost of Rs 508. Silicate and Paper industries were affected.Winnington Hospital. During the last two years many incidents of major fires in the area were handled by our volunteers.21 million on alternate fuels compared to 2009. Attika Khan Assistant Manager Development . impacting soda ash demand in the country. the negative impact of lower consumption by industrial segment was somewhat mitigated by growth in the bazaar segment. Fire Fighting Services Our fire fighting department is the only resource of its kind in the entire area and our team of fire fighters is regularly called upon to provide assistance in cases of an emergency. especially Glass.

We offer an assortment of chemicals to manufacturers across Pakistan that go into making products used by millions of people. adhesives. We work with trusted technology partners across the globe and bring to Pakistan leading edge innovative solutions.A vital part of everyday life From mayonnaise to asphalt. Our chemical ingredients touch lives in small but meaningful ways every day and this is what challenges us and prompts us to continuously innovate and convert new ideas into customer solutions. agriculture. soup to soap. textile chemicals etc. . paint. crops. our chemical ingredients go into the making of a spectrum of products that are trusted by customers every day. and plastics to fabrics. we take pride in the fact that we service practically every industry in the country! Our chemicals are essential in all kinds of manufacturing processes and products ranging from refrigerators and car seats to home insulation. At our Chemicals business. We value the trust placed in us and are proud to be such a vital part of daily life. petrochemicals.

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I have enjoyed 22 long years with ICI because of its highly ethical value system and because of it's care for people. Our product range is inclusive of Liquid Emulsifiers. complete range of textile chemical products to help them manufacture high quality textiles. Customer Focus • Over the years textile industry processes have become more advanced requiring the use of superior quality chemicals. my business has implemented sustainability inititiatives such as energy conservation and the Effluent Treatment Recycling Project. General Chemicals Business Structure We cater to almost every industry and are of key value in various industrial processes. Market Highlights The 2010 floods were the biggest catastrophe faced by the country and majority of the markets suffered as a result. • A new partnership was developed with Diversey. with products sold on both indent and Ex Stock basis. Our main customer segment is the appliances industry. and adhesives for PVC pipes. • A testament of our focus on customers is that we won an award from Dawlance Group for high levels of trust and reliability. We also supply polyurethanes. water treatment. Thus all the new variants will further aid in better soil management of arable land and help improve yield of the crop. all of which are naturally deficient in Pakistani soil. Business Development Textile segment: To retain customer focus and remain competitive in the market. The business has two segments: General Chemicals We have a trading business which operates like a trading house. community and the environment. Ali Kamal Marketing Manager. To meet customer needs we locally developed a new.Chemicals I have spent an amazing time at ICI. high performance adhesives and sealants etc. rubber adhesives and appliances industries. used primarily as insulation and also in flexible foam seating. We also sell solvents to oil. Specialty Chemicals This segment manufactures a range of adhesives. rigid foam insulation panels. • Introduced chelated nutrients modified for local soil which helped improve the soil’s pH • The business ventured into new territories such as Sri Lanka and Tanzania for exports. Commercialization of new chelated nutrients is expected during 2011 as part of our expansion of the Dissolvine range. Along with this gas supply shortages affected the textile industry resulting in plant shutdowns. food and beverage etc. and make a mark in the domestic as well as the international market. Every new day is a challenge that brings new opportunities and the learning curve is exponential. Major Highlights • Developed and commercialized five new textile chemicals which were developed locally and helped replace obsolete products in the market. Polyurethane: A sustainable supply of Polyurethane is a key goal the business is expected to achieve through good customer relationships and effective supply chain management. primarily the white glue range Calabond. Three new nutrients to be launched are Copper. mostly for the wet-processing stage of textile manufacturing. We also manufacture a range of locally developed textile chemicals. Efforts are underway to develop new deals with suppliers for consistent raw material availability. Our product range caters to many industries including paint. Inc which is a leading global provider of cleaning and hygiene solutions to the institutional marketplace. showing a continuing commitment to sustainability M Ahsan Anwar Plant HSE&S and Supply Chain Manager 66 | Chemicals | ICI Pakistan Limited Annual Report 2010 . Moreover our product range includes crop emulsifiers which are used by the Pesticide manufacturers. Currently. Manganese and Iron. used in the wood and furniture Industry. local innovation capability has been identified as an integral part of the segment’s success and reasonable resources and efforts are being put in to develop in-house technical capability to focus on new product development on a regular basis. Chelates: Our new variants will aid in better soil management of arable land and help improve yield of crop.

along with yarn pricing issues have crippled the textile industry at large and affected the off-take of ICI’s products. • The energy crisis is expected to remain at the same level as this year. The Industry during the year was affected greatly due to the lack of demand and increased Federal Excise duty on appliances. the textile industry has shrunk by about 30% over the year. • Majority of the markets are expected to grow only marginally on the back of slow recovery in demand. Moreover the implementation of the textile policy 2014 would be an important factor in the development of the textile sector.We turned the tide in HR last year with fundamentally significant intitiatives which work around capability-building to bring people to the heart of the business. However any improvement in gas supplies to the industry may result in an improved textile segment Our product range includes crop emulsifiers Our locally developed textile chemicals are widely used in the textile industry The appliance industry is a key customer segment ICI Pakistan Limited Annual Report 2010 | Chemicals | 67 . Future outlook • 2011 is expected to be a year of recovery during which economic indicators affected by floods are expected to improve. I'm excited to see this strategy become a resounding success! Shifa Ibrahim Human Resource Manager • Developed new crop emulsifiers with better chemical properties resulting in effective bonding strength Challenges The textile industry has suffered greatly throughout the year on the back of gas supply shortages and yarn pricing issues affecting both demand and supply. Textile units have not received gas for over 100 days in the year which impacted the sales of textile chemicals. particularly the gas supply cutoffs for the industrial sector. if not worse. This coupled with our mature product range led to a Strategy Review for the segment. The recent electricity and gas crisis. These policies will be related to the handling of the energy situation of Pakistan. As a result. Government policies in the coming year will determine a lot of our key decisions.

this has added to the business’ profitability. and also had the important effect of increasing technical know-how among farmers and local vendors. but creates a host of benefits. we are not only putting down sustainable roots for our business. The effective use of these improved seeds can result in higher agricultural production and increase the net incomes of farming families. which requires a degree of self-reliance. which is one of the ultimate goals we strive to promote. It stands to reason then. . We are confident that through our efforts.Putting down roots As the saying goes. We also want our business to be truly strong. you reap what you sow. both for our business and our customers. but also for the agricultural community we serve. In 2010 we began locally producing our open-pollinated seed varieties and our range now includes several varieties of vegetable seeds. In addition to increasing our own sustainability. that if you want to grow healthy crops you have to start with the best quality seeds. which in turn will have a positive impact on rural economies. This not only makes us more sustainable. We are therefore also focusing on creating our own product range. Giving farmers improved access to good quality seeds is a critical requirement for sustainable agricultural growth and food security.

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1. List of our Products Oncology Arimidex Nolvadex Zoladex Casodex Anti-Infectives Meronem ICEF Fortexone Ciprocide CNS Seroquel Zomig Gastro-intestinal Amybact Etipro Anthelmintic Ketress Cardiovascular Tenormin Tenoret Zestril Zestoretic Inderal Etizem Prescard Analgesics Synflex Proxen Dexifen Anaesthetic Diprivan (EDTA) Oral Chelator-for Thalassemia Ferriprox Anti-diabetic Glibetic The fact that brands and products I manage bring hope and relief to cancer patients is what drives me to remain dedicated to my work.6%. all prices fixed and controlled by government • No price increase by the Ministry of Health. a leading multi-national healthcare company. Two new contractual agreements were signed in 2010. intensifying pressure on margins Future outlook ICI Pharmaceuticals has always outperformed the market and with new launches in 2011 is expected to grow faster than the market. Business Development The Pharmaceuticals segment proactively seeks sustainable partners.53 billion and a growth rate of 14. Moreover. While twelve out of these thirteen brands are ranked in the top three. The segment is ranked number one in Cardiology and number 3 in Oncology. we have recently expanded our antibiotic range with the launch of a number of products in one of the fastest growing segments in the market. one of our products will change the way diarrhoea is treated! Aamir Naveed Business Manager Market Overview Our Pharmaceutical Business not only markets a strong portfolio of leading and innovative brands of prescription medicines from AstraZeneca.9% and four years CAGR of 15. Out of thirteen AstraZeneca brands that ICI markets in Pakistan. and one such partnership that came to fruition was Amybact. Pharmaceuticals Challenges • Hyper–competitive market • Increasing customer expectations and decreasing brand loyalty • Rampant unethical practices by competitors • High promotional spend by competitors • Strong regulatory environment. Dr Irum Sajid Compliance Manager & Product Manager Oncology . A new innovative probiotic specially designed for combating diarrhea in the pediatric population was sourced from Europe and launched in 2010. one with a local manufacturer and one with a European company. nine are now ranked as number one in their respective segments. but also markets its own brands. and we made a major breakthrough in this area in 2010. Business Performance ICI Pakistan. Pharmaceuticals Segment is ranked 23rd with retail sales value of Rs.Life Sciences Innovative new products that change the way diseases are treated are the most exciting thing about my job.

Our Pharmaceuticals Team at the Amybact launch One of the many blood donation drives arranged by the Pharmceuticals Team Animal Health team with livestock farmers Animal Health Market Overview Agriculture sector of Pakistan contributes about 21% to the national GDP and employs nearly 44% of labor force. The poultry sector is the second largest industry in Pakistan after textiles.5 billion. The animal health team is periodically trained on product technologies as well as on general good farm management practices. Poultry is the largest consumer of grains. Future outlook Despite the many challenges facing the livestock and poultry markets. rising costs of production due to high energy costs and increasing grain prices made poultry farmers generally more cost conscious in terms of their purchasing of medicines and other required products. For the poultry sector. Working with a team determined to aggressively grow the business is the most motivating and exciting part of my job! Matin Amjad Marketing Manager . This coupled with rising inflation and slow economic growth due to both internal and external factors. with net sales of Rs. cleaning and disinfecting solutions for livestock and poultry farmers. A key feature of the industry is its rapid mechanization and introduction of integrated farming systems. “VAD 3” a vitamins supplement and “Melonac” an NSAID. 8. New products launched during 2010. registering a growth of 34% over last year. Challenges We witnessed one of the worst ever natural disasters in the country’s history with devastating floods impacting lives and livelihoods across the country. created difficult business conditions as farmer’s ability to purchase products for their livestock declined. a number of new products were launched to provide more options and solutions to our valued customers. for 2010. Business Performance Our Animal Health segment crossed the Rs.040 million. Our rural population suffered the most and there was high incidence of distress sales of livestock. especially maize. DuPont and LNB International Feeds (a Cargill company). From our “Own Brands” range new launches included “Vanda Pellet” a cattle concentrate feed to enhance homogenous intake and minimize nutritional wastage. “Disulf” an antibiotic. However. Elanco Animal Health. “Supervit” and “Broiler Premix” in poultry and “Cattle Top Dressing” in livestock as supplements. Pakistan is the fourth largest global milk producer. “Biosolve Plus” and “Hyperox”. the organized animal healthcare market is estimated at Rs. Poultry meat contributes 19% of the total meat production in the country. the livestock market is still primarily unorganized and technology adoption is a challenge since the livestock population is scattered with average farm holding of one to six animals. Customer Focus 'Focusing on our customers future first' is the driver behind our approach of serving farmers at grassroot level across the country. Overall. Our discussions with customers are. this segment has robust plans to continue with the growth momentum through effective execution of well researched marketing plans for the existing portfolio of products and by continuing to add new products/technologies from world leading suppliers including Intervet/ScheringPlough Animal Health. focused on finding the right 'business solutions' to improve 'farm economics'. The Division also marketed DuPont’s world leading brands including “Virkon S”. 1 billion mark. through use of innovative products from our wide range of products as well as adoption of good farm management practices. 1. LNB International Feeds’ “Nascor” a broiler pre-starter feed to maximize farmer’s profitability through better feed efficiency. With abundant natural resources in the shape of a large livestock population. included Intervet/Schering-Plough Animal Health’s “Coccivac B” a vaccine for poultry coccidiosis disease. therefore. Business Development In 2010.

This is done by demonstrating that the produce our seeds generate commands a higher market value than that of conventional seed. In 2011. • To be the leading supplier of quality open pollinated vegetable seed varieties in Pakistan. Our technical team uses this research in assessing proper positioning of our own varieties in appropriate segments. We train them on optimal use of inputs. This differentiation is based on the shape. and post harvest handling of produce. In order to ensure our future business health. Peas. which is a thrill on its own! Zia ur Rehman Khalique Materials Manager Vegetable Seeds Market Overview Currently the estimated value of vegetable seeds in Pakistan is nearly Rs. Similar trials are conducted at public sector research institutes to establish the impact of our products in benefiting farmers across the nation. In these meetings we engaged more than 1600 farmers for a shared learning experience. The supply of seeds through imports and local production is dependent upon more than 600 companies. a US based company. and longer shelf life of the fruit. While at the same time. size. Cucumber. • Create a new customer segment focused on quality seed as a priority concern. The project is expected to save valuable foreign exchange and consolidate our margins. Our technical team actively engages growers and middlemen through farmer gatherings where we highlight the greater value proposition of produce that results from our seed. Sponge Gourd. These trials have provided promising results in varied settings. Hot Pepper. and we are doing everything for the first time. In addition. crop protection. the product pipeline is augmented and more competitive varieties are brought to the market. We have conducted initial trials for 5 Peas varieties at government and private farms. and Khyber Pakhtoon Khawa. In order to disseminate this knowledge. The supply of seed is dominated by imports from India which accounts for around 57%. 2. Customer Focus Farmer Training Programs We aim to generate awareness amongst farmers about how integral seed quality is in improving farm economics. Tomato. the segment has planned local production of Peas and Okra on approximately 250 acres of land across Punjab in order to fill the evident gap in the market for high quality open pollinated vegetable seeds. and Cauliflower. This company specializes in Peas and Beans. Product Range Currently. a pilot project for local production was initiated under technical assistance from Advanta.6 billion with Compound Annual Growth Rate (CAGR) of 13%. Saboor Ahmed Manager Supply Chain & Vegetable Seeds . to evaluate crop performance in varied climatic conditions. while USA is the 2nd largest supplier with 12% share. Our product assortment covers both hybrid and open pollinated seeds. our segment promotes the most diverse and widespread portfolio of vegetable seed products in the Pakistani market. Product Trials We create a strong “Reason to Believe” for our products by generating trials with opinion leading farmers. vegetable seeds segment has engaged Pureline Seeds. Spinach. Local seed production of Okra and Pea seeds (OPV) Sustainability is critical for our long term success. India. Egg Plant. We focus our efforts on educating customers to maximize outcome from their limited landholding by enhancing their agronomic practices. Informal supplies through farmers own grown local seeds share a significant portion of Wheat. every challenge is fresh and vital and we are keen to take on new projects. in 2010 our team organized approximately 55 farmers’ meetings across the country. Bitter Gourd. Hence we help farmers in finding the most appropriate and climatically adaptable variety that maximizes outcome in terms of enhanced yields and profitability. Future Outlook • To be amongst the top 3 Vegetable Seed Companies in Pakistan. Business Development We benchmark our seed varieties against market leading brands. Ridge Gourd. Vegetables (Open Pollinated Varieties). This research is conducted at a farm in Sahiwal and government research centers in Punjab. color. The immediate impact of desired results provides our customers with the confidence to convert onto our high yielding and genetically adaptable hybrid seed varieties. local seed production creates opportunities for farmers and the seed processing industry of Pakistan. Sindh. This initiative was aimed at generating long term business strength by providing high quality seeds and sharing best agronomic practices with local famers.My time with the company has provided me the chance to perform to the best of my capabilities. Rice and Cotton seed supply. Bottle Gourd. New varieties introduced To meet longer term business objectives. Our aim is to generate options for farmers with new varieties of Pea seeds with resistance to tough climatic conditions and better profit margins due to early maturity. Coriander. These include 51 varieties of seed covering 13 crops including Okra. • To improve farm economics of low income agriculture sector The exciting thing for me is that Vegetable Seeds is a new segment. Every day is a challenge to do even better.

Challenges Sunflower market faces many challenges which are hampering its growth. Business Development We are working to promote the concept of intercropping of sunflower and canola with sugarcane. New areas were developed in upper Sindh and Punjab for sunflower and corn. share of hybrid seed market is gradually increasing. we took this as an opportunity to create business diversity in any possible way. Business Performance Our Seeds segment has shown good volume growth in all its products barring sunflower which was impacted by unfavorable conditions. We are also entering into the lucrative micronutrients market by introducing products like zinc and humic acid.Vegetable Seeds Team members during a visit to Advanta India Vegetable Seeds Team during a crop handling activity with the farmers Seeds Team members at Pacific Seeds in Australia Catering to the sunflower market Seeds Market Overview Seed industry is estimated at Rs 40bn where Open-Pollinated Variety (OPV) seed market is around Rs 36. We also intend to introduce small packs of fodder products to cater to the needs of farmers with small land holdings. Customer Focus We take a keen interest in fulfilling customer needs and demands. We have also been working on developing the concept of silage for its corn products in coordination with Nestle and Engro staff.4bn with 8% share of total seed market. The trend towards early BT cotton is also proving unfavorable for sunflower. therefore Seeds segment is constantly striving to find suitable products that could be introduced in this segment of market. Future outlook We have chalked out an aggressive growth strategy. Sajid Mehmood Business Development Manager The floods in 2010 greatly impacted the agriculture sector resulting in a tough business environment. In line with this we introduced small packs of corn products to effectively meet customer requirements. importance of OPV market cannot be overlooked. Low cost and quality imports of fodder are also a major challenge for our fodder range. My biggest challenge was to keep my team's morale high and motivate them to excel. Segment also maintained strong GM/Sales ratio for 2010. many other micronutrient products are also in the pipeline. With increased level of awareness among farmers. ICI is only present in the hybrid market segment along with few other major multinational companies. Abdul Wahab Marketing Manager ICI Pakistan Limited Annual Report 2010 | Life Sciences | 73 .7bn with 92% share and Hybrid seed market is reported at Rs 3. However. where we will strengthen our position in the current market and diversify into other markets to focus on sustainable growth. 110% and 100% was recorded in fodder. We have coordinated with government departments and sugar industries to establish the concept and benefit farmers by increasing their income. canola and MR Buster respectively. whereas volume growth of 10%. Government focus towards wheat affects farm economics making sunflower an unviable crop for farmers. Volume growth of 43% was recorded in corn. We provided free seeds drill plates to solve farmer’s problem of seed sowing in sunflower growing areas of Sindh. Even though markets were turbulent and environmental factors adverse. We are entering into the huge OPV market by introducing corn fodder and rice varieties which would be followed by other varieties.

ICI Pakistan Limited Financial Statements

ICI Pakistan Limited Annual Report 2010 75

Auditors’ Report to the Members

We have audited the annexed unconsolidated balance sheet of ICI Pakistan Limited (“the Company”) as at 31 December 2010 and the related unconsolidated profit and loss account, unconsolidated statement of comprehensive income, unconsolidated cash flow statement and unconsolidated statement of changes in equity together with the notes forming part thereof, for the year then ended and we state that we have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purposes of our audit. It is the responsibility of the Company's management to establish and maintain a system of internal control, and prepare and present the above said statements in conformity with the approved accounting standards and the requirements of the Companies Ordinance, 1984. Our responsibility is to express an opinion on these statements based on our audit. We conducted our audit in accordance with the auditing standards as applicable in Pakistan. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the above said statements are free of any material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the above said statements. An audit also includes assessing the accounting policies and significant estimates made by management, as well as, evaluating the overall presentation of the above said statements. We believe that our audit provides a reasonable basis for our opinion and, after due verification, we report that: a) b) in our opinion, proper books of account have been kept by the Company as required by the Companies Ordinance, 1984; in our opinion: i) the balance sheet and profit and loss account together with the notes thereon have been drawn up in conformity with the Companies Ordinance, 1984, and are in agreement with the books of account and are further in accordance with accounting policies consistently applied; the expenditure incurred during the year was for the purpose of the Company's business; and the business conducted, investments made and the expenditure incurred during the year were in accordance with the objects of the Company;

ii) iii)

c)

in our opinion and to the best of our information and according to the explanations given to us, the unconsolidated balance sheet, unconsolidated profit and loss account, unconsolidated statement of comprehensive income, unconsolidated cash flow statement and unconsolidated statement of changes in equity together with the notes forming part thereof conform with approved accounting standards as applicable in Pakistan, and, give the information required by the Companies Ordinance, 1984, in the manner so required and respectively give a true and fair view of the state of the Company's affairs as at 31 December 2010 and of the profit, its cash flows and changes in equity for the year then ended; and in our opinion Zakat deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980), was deducted by the Company and deposited in the Central Zakat Fund established under section 7 of that Ordinance.

d)

Date: 16 February, 201118 February 2009 Karachi

KPMG Taseer Hadi & Co. Chartered Accountants Amir Jamil Abbasi

ICI Pakistan Limited Annual Report 2010 77

548.628.500.928 13.694.352 15.019 1.190 Current Liabilities Trade and other payables Contingencies and Commitments Total Equity and Liabilities 8 9 22.846 LIABILITIES Non-Current Liabilities Provisions for non-management staff gratuity and eligible retired employees' medical scheme Deferred tax liability .000. subscribed and paid-up capital Capital reserves Unappropriated profit Total Equity Surplus on Revaluation of Property.845 11.023 465.000 ordinary shares of Rs 10 each Issued.796 931.208.000. Plant and Equipment 5 3 4 2010 2009 15.000 1.000 1.388.898 183.037 5.025.388.482.030.225 14.422.942 870. 2010 Amounts in Rs ’000 Note EQUITY AND LIABILITIES Share Capital and Reserves Authorised capital 1.482.845 12.093.000.799.248 1.657 5.098 1.net 6 7 222.117 78 Annual Report 2010 ICI Pakistan Limited .Balance Sheet As at December 31.093 907.023 465.672 21.

110 9.438 677.674 606.895.500 324.225.379 10.951 4.463 406.240 4.280 545.822 11.152.739 452.415 Current Assets Stores and spares Stock-in-trade Trade debts Loans and advances Trade deposits and short-term prepayments Other receivables Taxation recoverable Cash and bank balances 21 15 16 17 18 19 20 450.458 1.596 3.072.657 The annexed notes 1 to 46 form an integral part of these financial statements.264 40.091 180.257 Total Assets 22. plant and equipment Intangible assets 10 11 2010 2009 8. M J Jaffer Chairman / Director Waqar A Malik Chief Executive Feroz Rizvi Chief Financial Officer ICI Pakistan Limited Annual Report 2010 79 .030.110 712.125.244.297.489 Long-term investments Long-term loans Long-term deposits and prepayments 12 13 14 712.867 590.525 919.500 330.672 496.102 9.251 11.661.077.786.468.168 21.075.401 3.345 792.722 443.Amounts in Rs ’000 Note ASSETS Non-Current Assets Property.422.078 1.222 10.225.878.193 9.111 460.801 29.

2010 Amounts in Rs ’000 Note Turnover Sales tax.290 (1.754.072.256 3.428.566 (163.719) (1.402.131) 459.005) 3.Profit and Loss Account For the year ended December 31.738 (Rupees) 14.590) (415.897 (22.044.005) 5.506 (4.027.731.178. commission and discounts Net sales.690) 6.526) 35. commission and toll income Cost of sales Gross profit Selling and distribution expenses Administration and general expenses Operating result Financial charges Other operating charges 28 29 26 27 24 24 23 2010 39.Basic and diluted The annexed notes 1 to 46 form an integral part of these financial statements.284) 28.129.302.969.299.541) (247.892 (1.516 31 (1.768) 2.426) (467.306) 2009 32.826 (Rupees) Earnings per share . excise duty.712.443.73 Other operating income Profit before taxation Taxation Profit after taxation 30 486.532.690) 2. 32 17.174) (1.064) 3.429.674.980 (28.654 (167.880) (303.983 3.399.675.470.181 (3.506 (1.686.50 M J Jaffer Chairman / Director Waqar A Malik Chief Executive Feroz Rizvi Chief Financial Officer 80 Annual Report 2010 ICI Pakistan Limited .027.

738 2.044.Statement of Comprehensive Income For the year ended December 31.428.428. 2010 Amounts in Rs ’000 2010 Profit for the year Other comprehensive income Total Comprehensive income for the year 2.044.826 2.738 The annexed notes 1 to 46 form an integral part of these financial statements. M J Jaffer Chairman / Director Waqar A Malik Chief Executive Feroz Rizvi Chief Financial Officer ICI Pakistan Limited Annual Report 2010 81 .826 2009 2.

plant and equipment Profit / mark-up received on loan to subsidiary Loan / Standby finance facility to subsidiary company .543.187 3.293) 56.008 (228.937 4.148 58.680) (97.497 (196) 1.888) 282.251) (101.957) 101.211) 58. plant and equipment Provision for non-management staff gratuity and eligible retired employees' medical scheme Mark-up on bank deposits and loan to subsidiary Interest / mark-up expense 943.000) Net cash used in investing activities (752.068) (1.403 1.888 4.685) (11.991 (351.938.811 (10.334.474.853.479 (826.097) 163.038 Movement in: Working capital Long-term loans Long-term deposits and prepayments Cash generated from operations Payments for : Non-management staff gratuity and eligible retired employees' medical scheme Taxation Interest / mark-up Profit / mark-up received on bank deposits Net cash generated from operating activities (19.448 2.624) 88.380) 3.231 Cash Flows from Investing Activities Payments for capital expenditure Proceeds from disposal of property.786) (15.606 4.716.net (854.402) 17.688 (5.083.118 3.830) (938.516 2009 3.428 (730.506 870.033 68.342) 33.043) 82 Annual Report 2010 ICI Pakistan Limited .072.239) (513.476.Cash Flow Statement For the year ended December 31.310 (15.211 (187. 2010 Amounts in Rs ’000 2010 Cash Flows from Operating Activities Profit before taxation Adjustments for: Depreciation and amortisation Gain on disposal of property.731.

764 71.027) 193.596 (161.388.661.786) 1.861 (450.251 4.822 2009 (1.851) (26.Amounts in Rs ’000 2010 Cash Flows from Financing Activities Dividend paid Net cash used in financing activities Net increase in cash and cash equivalents Cash and cash equivalents at January 1 Cash and cash equivalents at December 31 . M J Jaffer Chairman / Director Waqar A Malik Chief Executive Feroz Rizvi Chief Financial Officer ICI Pakistan Limited Annual Report 2010 83 .971.note 21 (1.753 (358.468.571 4.251 Movement in Working Capital (Increase) / Decrease in current assets Stores and spares Stock-in-trade Trade debts Loans and advances Trade deposits and short-term prepayments Other receivables 45.761) 8.083.286 1.170 1.388.555) (Decrease) / Increase in current liability Trade and other payables (280.018) 2.027) (1.497.468.789) The annexed notes 1 to 46 form an integral part of these financial statements.569) (112.820) 126.497 42.139 (292.776) 78.041.485) (47.231) (730.805 (541.081 4.041.018) (1.442.

recorded directly in equity Total comprehensive income for the year ended December 31. M J Jaffer Chairman / Director Waqar A Malik Chief Executive Feroz Rizvi Chief Financial Officer 84 Annual Report 2010 ICI Pakistan Limited .687 13.258 (555.126 (555. 2009 Final dividend for the year ended December 31.428.949 2.796 Balance as on December 31.Statement of Changes in Equity For the year ended December 31.075.023) 2.694.041.845 24. 2010 Transfer from surplus on revaluation of property.494 2.610) (763.738 - 465. 2008 @ Rs 4.482. 2010 Amounts in Rs ’000 Issued.388. plant and equipment incremental depreciation for the period . subscribed and paid-up capital Balance as on January 1.548.413) (1. plant and equipment incremental depreciation for the period .388.023 - Capital reserves Unappropriated profit Total 465.041. 2009 1.00 per share Interim dividend for the year 2009 @ Rs 3.453.687 11.320 12. 2010 1.448.826 - 465.017) 2. 2009 Transfer from surplus on revaluation of property.453. 2009 @ Rs 4.net of deferred tax .388.044.320 14.225 24.388.017) 2.949 2.808) (1.845 30.044.388.808) (1.610) (763.209) (485.023) 2.net of deferred tax .209) (485.826 (624.428.note 5 1.note 5 - - (624.628.023 The annexed notes 1 to 46 form an integral part of these financial statements.928 30.494 2.594.093 Balance as on December 31.50 per share Transactions with owners.413) (1.845 - 10.075.738 12. recorded directly in equity Total comprehensive income for the year ended December 31.023 Final dividend for the year ended December 31.50 per share Transactions with owners.50 per share Interim dividend for the year 2010 @ Rs 5.

unless the changes to the plan are conditional on the employees remaining in service for a specified period of time (the vesting period). the provisions of. The pension and gratuity schemes are salary schemes providing pension and lump sums. Defined contribution plans The Company operates two registered contributory provident funds for its entire staff and a registered defined contribution superannuation fund for its management staff.3 Staff retirement benefits The Company's retirement benefit plans comprise of provident funds. paints. 1984 shall prevail. The preparation of financial statements in conformity with approved accounting standards requires management to make estimates. The valuation uses the Projected Unit Credit method.Notes to the Financial Statements For the year ended December 31. Revisions to accounting estimates are recognised prospectively commencing from the period of revision. the past-service costs are amortised on a straight-line basis over the vesting period. who have either opted for this fund by July 31. Pension and gratuity schemes for management staff are invested through two approved trust funds. 1984. Judgments and estimates made by the management that may have a significant risk of material adjustments to the financial statements in subsequent years are discussed in note 42. Estimates. toll manufactured and imported pharmaceuticals and animal health products. In addition to this the Company also provides group insurance to all its employees. 2. 2. ICI Pakistan Limited Annual Report 2010 85 . The pension and gratuity plans are final salary plans. The Company recognises expense in accordance with IAS 19 “Employee Benefits”. The Company also operates gratuity scheme for non-management staff and the pensioners' medical scheme which are unfunded. The Company's registered office is situated at 5 West Wharf. pensions. It also acts as an indenting agent and toll manufacturer. 2010 1. Past-service costs are recognised immediately in profit and loss account. or directives issued under the Companies Ordinance. respectively. plant and equipment have been included at revalued amounts and certain exchange elements referred to in note 2. In case requirements differ. Actuarial gains and losses are amortised over the expected average remaining working lives of employees as allowed under the relevant provision of IAS 19 “Employee Benefits”. gratuity schemes and a medical scheme for eligible retired employees. Status and Nature of Business ICI Pakistan Limited (“the Company”) is incorporated in Pakistan and is listed on the Karachi.1 Statement of compliance These financial statements have been prepared in accordance with approved accounting standards as applicable in Pakistan. 1984. Defined benefit plans The Company operates a funded pension scheme and a funded gratuity scheme for management staff. 2004 or have joined the Company after April 30. 2. specialty chemicals. and merchanting of general chemicals. The Company is engaged in the manufacture of polyester staple fibre. 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. including reasonable expectations of future events. The pensioner's medical plan reimburses actual medical expenses to pensioners as per entitlement. Summary of Significant Accounting Policies The accounting policies adopted are the same as those which were applied for the previous financial year. except that certain property. Lahore and Islamabad Stock Exchanges. plant & equipment. soda ash. assumptions and judgments are continually evaluated and are based on historical experience and other factors. marketing of seeds. 2. polyurethanes. assumptions and use judgments that affect the application of policies and reported amounts of assets and liabilities and income and expenses. sodium bicarbonate.8 have been recognised in the cost of the relevant property.2 Basis of preparation These financial statements have been prepared under the historical cost convention. provisions of and directives issued under the Companies Ordinance. In this case. An actuarial valuation of all defined benefit schemes is conducted every year. POY chips. Karachi. 2004.

4 Provisions A provision is recognised in the balance sheet when the Company has a legal or constructive obligation as a result of a past event. Depreciation on additions is charged from the month in which the asset is available for use and on disposals up to the month of disposal. depreciation method and the useful lives of each part of property. 2. The cost of leasehold land is amortised in equal installments over the lease period.5 Trade and other payables Trade and other payables are recognised initially at fair value plus directly attributable cost. providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.6 Dividend Dividend distribution to the Company's shareholders is recognised as a liability in the period in which the dividends are approved. The Company recognises a deferred tax asset to the extent that it is probable that taxable profits for the foreseeable future will be available against which the asset can be utilised. plant and equipment comprises historical cost. exchange differences recognised in accordance with the previous Fourth Schedule to the Ordinance. 2. using the enacted or substantively enacted rates of taxation. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised. plant and equipment upto the commencement of commercial production and the cost of borrowings during construction period in respect of loans taken for specific projects. Cost of certain property. leasehold land and plant & machinery) are stated at cost less accumulated depreciation and impairment losses. Assets replaced.8 Property. at each balance sheet date. in which case it is recognised in other comprehensive income or below equity respectively. plant and equipment is credited to the surplus on revaluation account. except to the extent that it relates to items recognised directly in other comprehensive income or below equity. if any. and it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of obligation. Further. The amount recognised as a provision reflects the best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The residual value. plant and equipment and depreciation Property. Surplus on revaluation of property. plant and equipment (except freehold land. are derecognised. Freehold land. To the extent of the incremental depreciation charged on the revalued assets the related surplus on revaluation of property. The charge for current tax includes adjustments to charge for prior years. Income tax expense is recognised in the profit and loss account. if any. Maintenance and normal repairs are charged to income as and when incurred. 86 Annual Report 2010 ICI Pakistan Limited . the Company recognises deferred tax asset / liability on deficit / surplus on revaluation of property. Improvements are capitalised when it is probable that respective future economic benefits will flow to the Company and the cost of the item can be measured reliably. leasehold land and plant & machinery are stated at revalued amounts less accumulated depreciation. Current Provision for current taxation is based on taxable income at the enacted or substantively enacted rates of taxation after taking into account available tax credits and rebates. Depreciation charge is based on the straight-line method whereby the cost or revalued amount of an asset is written off to profit and loss account over its estimated useful life after taking into account the residual value. if material. if any. if any. and adjusted if appropriate. 2010 2. Deferred Deferred tax is recognised using balance sheet method. plant and equipment which is adjusted against the related deficit / surplus. Capital work-in-progress is stated at cost. plant and equipment that is significant in relation to the total cost of the asset are reviewed. if any. 2.7 Taxation Income tax expense comprises current and deferred tax. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities. 2. cost of exchange risk cover in respect of foreign currency loans obtained for the acquisition of property.Notes to the Financial Statements For the year ended December 31. plant and equipment (net of deferred taxation) is transferred directly to unappropriated profit.

All individually significant receivables found not to be specifically impaired are then collectively assessed for any impairment that has been incurred but not yet identified. are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined. An impairment loss is recognised if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount. Losses are recognised in profit and loss and reflected in an allowance account against receivables. The Company's corporate assets do not generate separate cash inflows. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. If there is an indication that a corporate asset may be impaired. the decrease in impairment loss is reversed through profit and loss account. are capitalised initially at cost and subsequently stated at cost less accumulated amortisation and impairment losses.10 Impairment Financial assets (including receivables) Financial assets are assessed at each reporting date to determine whether there is objective evidence that they are impaired. useful lives and residual values are reviewed at each reporting date and adjusted. if appropriate.11 Investments Investments in subsidiary (ICI Pakistan PowerGen Limited) and unquoted equity securities classified as available for sale are stated at cost less provision for impairment. if any. 2. Impairment loss recognised in prior periods is assessed at each reporting date for any indications that the loss has decreased or no longer exists. A financial asset is impaired if objective evidence indicates that a loss event has occurred after the initial recognition of the asset and that the loss event had a negative effect on the estimated future cash flows of that asset that can be estimated reliably. then the asset's recoverable amount is estimated. Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. if any.9 Intangible asset and amortisation Intangible assets with a finite useful life. Impairment losses are recognised in profit and loss account. 2. All other expenditures are recognised in profit and loss as incurred. assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the “cashgenerating unit. and the related surplus on revaluation of property. Amortisation is recognised in profit and loss on a straightline basis over the estimated useful lives of intangible assets. An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the asset's original effective interest rate. Receivables that are not individually significant are collectively assessed for impairment by grouping together receivables with similar risk characteristics.Gains and losses on disposal of assets are taken to the profit and loss account. The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. plant and equipment is transferred directly to retained earnings (unappropriated profits). net of depreciation or amortisation. licenses and property rights. Amortisation methods. if no impairment loss had been recognised. In assessing value in use. indications that a debtor or issuer will enter bankruptcy. the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessment of the time value of money and the risks specific to the asset. 2. Amortisation is based on the cost of an asset less its residual value. When a subsequent event causes the amount of impairment loss to decrease. Non-Financial assets The carrying amounts of non-financial assets other than inventories and deferred tax asset. Interest on the impaired asset continues to be recognised through the unwinding of the discount. such as certain softwares. Objective evidence that financial assets are impaired may include default or delinquency by a debtor. All individually significant receivables are assessed for specific impairment. then the recoverable amount is determined for the CGU to which the corporate asset belongs. For the purpose of impairment testing. or CGU”). ICI Pakistan Limited Annual Report 2010 87 .

2.6. 2.16 Functional and presentation currency Items included in the financial statements are measured using the currency of the primary economic environment in which the Company operates. including revenues and expenses that relate to transactions with any of the Company's other components. 2. and for which discrete financial information is available. Monetary assets and liabilities in foreign currencies are translated into Pak Rupees at the foreign exchange rates at the balance sheet date. income tax assets. 2010 2. at the foreign exchange rate prevailing at the date of transaction. For those products which are often sold with a right of return. costs of conversion and other costs incurred in bringing the inventories to their present location and condition. 2. An operating segment's operating results are reviewed regularly by the CEO to make decisions about resources to be allocated to the segment and assess its performance. liabilities and related income and 88 Annual Report 2010 ICI Pakistan Limited . A provision for impairment of trade and other receivables is established when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of receivables (Refer note 39. Mark-up / Interest income is recognised as it accrues in profit and loss account. which is the Company's functional and presentation currency. Commission income is recognised on the date of shipment from suppliers.1). Unallocated items comprise mainly corporate assets. • • • • 2. Finance income comprises interest income on funds invested.18 Financial expense and finance income Financial expenses are recognised using the effective interest rate method and comprise foreign currency losses and mark-up / interest expense on borrowings.17 Revenue recognition • Revenue from the sale of goods is recognised when the significant risks and rewards of ownership have been transferred to the customer.19 Segment reporting Segment reporting is based on the operating (business) segments of the Company. Cost comprises all costs of purchase. if any. The financial statements are presented in Pak Rupees.13 Stock-in-trade Stock-in-trade is valued at lower of weighted average cost and estimated net realisable value. Profit on short-term deposits and mark-up on loan to subsidiary is accounted for on a time-apportioned basis using the effective interest rate method.12 Stores and spares Stores and spares are stated at the lower of cost and net realisable value. Dividend income is recognised when the right to receive dividend is established. accumulated experience is used to estimate and provide for such returns at the time of sale. Segment results that are reported to the CEO include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.15 Foreign currency translation Transactions denominated in foreign currencies are translated to Pak Rupees. Toll manufacturing income is recognised when services are rendered. An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses. Exchange differences are taken to the profit and loss account. 2.Notes to the Financial Statements For the year ended December 31. Cost is determined using the weighted average method.14 Trade debts and other receivables Trade debts and other receivables are recognised initially at fair value plus directly attributable cost. 2. using the effective interest rate method. Net realisable value signifies the estimated selling price in the ordinary course of business less net estimated costs of completion and selling expenses.

Paints. 2. Segments reported are Polyester. Soda Ash. if any. ICI Pakistan Limited Annual Report 2010 89 .22 Cash and cash equivalents Cash and cash equivalents comprise of cash in hand and current and deposit accounts held with banks.20 Finance lease Leases that transfer substantially all the risks and rewards incidental to ownership of an asset are classified as finance leases. 2. derivatives that do not qualify for hedge accounting are accounted for as trading instruments. 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. Assets subject to finance lease are stated at amounts equal to the fair value or. plant and equipment. The minimum lease payments are apportioned between the finance charge and the reduction of the outstanding liability. or to realise the assets and to settle the liabilities simultaneously. Payments made under Ijarah contracts are recognised in the profit and loss account on a straight-line basis over the term of the lease. are capitalised as part of the cost of that asset. Life Sciences and Chemicals. the present value of the minimum lease payments. Such borrowing costs. financing and investment activities. In accordance with its treasury policy. 2. construction or production of a qualifying asset.24 Financial liabilities All financial liabilities are initially recognised at fair value plus directly attributable cost. if lower. and subsequently measured at amortised cost. The finance cost is charged to profit and loss account and is included under financial charges. which also reflects the management structure of the Company. if any. 2. plant and equipment. Payments made under operating leases (net of any incentives received from the lessor) are charged to the profit and loss account on a straight-line basis over the period of the lease.26 Off-setting Financial assets and liabilities are offset and the net amount is reported in the financial statements only when there is a legally enforceable right to set-off the recognised amount and the Company intends either to settle on a net basis. the Company does not hold or issue derivative financial instruments for trading purposes. However. The business segments are engaged in providing products or services which are subject to risks and rewards which differ from the risks and rewards of other segments.27 Earnings per Share The Company presents basic and diluted earnings per share (EPS) data for its ordinary shares. which are payable on demand and form an integral part of the Company's cash management are included as part of cash and cash equivalents for the purpose of statement of cash flows. Basic EPS is calculated by dividing the profit after tax attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. 2. net of transaction costs incurred.25 Derivative financial instruments The Company uses derivative financial instruments to hedge its exposure to foreign exchange and interest rate risks arising from operational.expenditure. Running finance facilities availed by the Company.21 Operating lease / Ijarah contract Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Assets acquired under finance leases are depreciated in accordance with the Company's depreciation policy on property. 2.23 Borrowings and their cost Borrowings are recognised initially at fair value. Segment capital expenditure is the total cost incurred during the period to acquire property. 2. 2.

023 With effect from October 1..1 Share premium includes the premium amounting to Rs 0. The remitting companies have no claim to their repayments. at the date of acquisition i.258.1 Capital receipts . 4.023 126.V.V.795 4.229..185 252 3.300 3.1 3. 2001.300 126.618.259 586 465.V.V. 2000 approved by the shareholders and sanctioned by the High Court of Sindh. 2010. ICI Omicron B. 2010 Amounts in Rs ’000 2010 2009 (Numbers) 2010 2009 3. an ex-associate.190 125.391 ordinary shares issued by the Company and the market value of Rs 590. Surplus on Revaluation of Property. Capital receipts represent the amount received from various ICI PLC group companies overseas for the purchase of property.184 1.846 962.402 318.. which is a wholly owned subsidiary of AkzoNobel N.258.492 25.357 million representing the difference between nominal value of Rs 10 per share of 12.845 465. ICI Pakistan Limited continues to be the direct subsidiary of ICI Omicron B.845 4.618.391 138.492 25. 2000 the Pure Terephthalic Acid (PTA) Business of the Company was demerged under a Scheme of Arrangement (“the Scheme”) dated December 12.2 465. 2008.e.2 5. AkzoNobel N. UK.388.1) 125. effective January 2. 2001 and the number of shares that have been issued were determined in accordance with the Scheme in the ratio between market value of the shares of two companies based on the mean of the middle market quotation of the Karachi Stock Exchange over the ten trading days between October 22.802. plant and equipment. 2001 to November 2.541 million of these shares corresponding to 25% holding acquired in Lotte Pakistan PTA Limited.846 90 Annual Report 2010 ICI Pakistan Limited .184 1..259 586 465. (24.229. Plant and Equipment Balance as on January 1 Less: Transfer to unappropriated profit in respect of incremental depreciation charged during the year net of deferred tax Balance as on December 31 931.Notes to the Financial Statements For the year ended December 31.902 million received on shares issued for the Company's Polyester Plant installation in 1980 and share premium of Rs 464.190 1.352 (30.note 4.949) 931. and became the ultimate holding company of ICI Pakistan Limited. the parent company of ICI Omicron B.618.227 3. Issued.402 1.185 252 12. Capital Reserves Share premium .840.802. held 105.227 318. Subscribed and Paid-up Capital Ordinary shares of Rs 10 each fully paid in cash Ordinary shares of Rs 10 each issued as fully paid for consideration other than cash under scheme of arrangement for amalgamation Ordinary shares of Rs 10 each issued as fully paid bonus shares Ordinary shares issued pursuant to the Scheme as fully paid for consideration of investment in associate (note 3.494) 907.note 4. November 2.125 (2009: 105.2 12. acquired ICI PLC.391 138.840.125) ordinary shares of Rs 10 each at December 31.388..V.

258)* 6.827 442.469 734.235 236.126.101.867 (60.008 6.319 310.387 1.Amounts in Rs ’000 2010 6.043 298.008) 15.374 1% (9%) 6.560 (390.126.903) 13.744) 18.535 41.1 Staff Retirement Benefits 2010 Pension 6.483 1.798 259.472 (286.903 42.727) 181.442 million).354.844 (64.688 747.895 213.569 7% 5% 2009 2.469 (462.146 19.1.084 6.1.181) * 1.354) 155.1.363) (2.659 381.170) 117.768) 36.1.582 70.749 216.991) 19.173 7.413 3% 13% 2008 1.6 Historical information As at December 31 Present Value of defined benefit obligation Fair value of plan assets Deficit Experience adjustments on plan liabilities Experience adjustments on plan assets 2010 2.010 156.841) Deficit (167.101.835 362.067.437 (175.547 (103.584 391.584 33.026 1.483.239 (183.819.304 (142.885 56.326) 46.5 Movement in the fair value of plan assets: Opening balance Expected return Contributions Benefits paid Actuarial gain Fair value of plan assets at the end of the year 1.354.019 (390.426 8.997 194.437 62.867 300.258)* 6.150 1.926 (103.1.150 1.380.1.798) (145.720 2.043 263.113 462.1 Unfunded Total The amounts recognised in the profit and loss account against defined benefit schemes are as follows: Current service cost Interest cost Expected return on plan assets Termination cost Recognition of actuarial loss Net charge for the year 47.971) (1.145 (173.579 265.252 Recognised asset / (liability) 342.771.770 1. Provisions for non-management staff gratuity and eligible retired employees' medical scheme .380.658 98.771.173 Present value of defined benefit obligation .236.043 115.043 101.294 (30.741 40.288 1.779) 198.note 6.786 1.1.105 9.449) 13.525 24. The table has been rated down three years for mortality of female pensioners and widows.477 815.926 (64. ICI Pakistan Limited Annual Report 2010 91 .150 39.926 342.426 (19.250 198.971 31.304 (236.286) 134.748.286) 13.634 (98.827 47.173 317.771.449 16% 7% 2006 1.768) 35.301 (30.844 (133.828) 42.084 9.526 153.991 24.062 693.971 1.1 Contributions / payments during the year Closing balance 319.002 50.304 1.526 153.477 (553.117.824 58.220 (95.404 31.610) 122.472 319.062 130.060 60.560.535 41.945 319.352 318.826 (183.068 (223.385 1.610) 75.354) 93.560 (130.285.223 62.037.059) (329.633 33.173 (15.821) (394.010 156.926 (31.741 40.note 6.469 173.312.170 245. Actual (loss) / return on plan assets during 2010 was Rs 267.258) (58.142 million (2009: Rs 300.220 362.972 1. The return on plan assets was assumed to equal the discount rate.895 213.842) 158.319 133.744) 32.920) 12.2 Movements in the net asset / (liability) recognised in the balance sheet are as follows: Opening balance Net Charge for the year .724 13% (27%) 2007 1.204) (162.204 340.864 (265.019 353.054) 13.109 169.835 353.084) 156.842 1.748.175 175.579) 318.634 (286.716 (194.867 353.751 26.489) (56.4 Movement in the present value of defined benefit obligation: Opening balance Current service cost Interest cost Benefits paid Termination cost Actuarial loss Present value of defined benefit obligation at the end of the year 1.181) * 238.084) (340.449 275.894 692.3 The amounts recognised in the balance sheet are as follows: Fair value of plan assets .019 6.779 31.555.942 183.885 56.547 33.419 (381.068) 10.note 6.064 317.319 (1.304 (340.1.5 1.419 (183.285.7 Major categories / composition of plan assets are as follows: 2010 Debt instruments Equity at market value Cash 62% 30% 8% 2009 50% 32% 18% Mortality of active employees and pensioners will be represented by the LIC(96-98) Table.950 553.037.842) (381.1.148 (70.329) 179.088.749 216.579 7.920 46.285.831 340.661 (223.547.304 1.828 50.354.798 78.223 62.841 462.300 56.note 6.827) (248.363 1.882 1.668) Unrecognised actuarial loss 510.684 391.498 1.301 (39.508) 567.469 - 6.239) 46.037.352) 13.054) 170.1 Funded Gratuity Unfunded Total Pension Funded Gratuity 2009 2009 222.326 78.145 (95.938 242.784 7.751) 275.477 711.477 26.547.437 317.105) 245.4 (1.090 1.1.250) 105.046 1.354.294 19.748.

150. The sensitivity to reflect the effect of a 1% movement in the assumed medical cost trend were as follows: 2010 Increase Decrease 8.098) 2009 963.565 1. doubtful debts and others Taxable temporary differences Property.421) (19.567 305.870) (470.653 253.287 These figures are based on the latest actuarial valuation.269 million (2009: Rs 29.808 5.3 Workers' welfare fund Distributors' security deposits .993 10.270.10 The Company contributed Rs 62.807 9.482.361. Deferred Tax (Liability) / Asset . Actuarial gains and losses are amortised over the expected future service life of current members. as at December 31.553 million) and Rs 35.note 8.note 8.025 7.8 The principal actuarial assumptions at the reporting date were as follows: Discount rate Expected return on plan assets Future salary increases Future pension increases 14.note 8.net Deductible temporary differences Tax losses carried forward Provisions for retirement benefits.810 5.000 106.353) (870.5 Others 92 Annual Report 2010 ICI Pakistan Limited .75% 44. excise and custom duties Accrued interest / return on unsecured loan .025.155.066 154.38% 6.752 4.139 335.75% 12. 2010 Opening 7.544 99.419) (554.784 470.003 255.note 8.25% 12.098) 21.note 8.549) (1.975 164.1.421 355. 2010.60% 7.103 248.00% 8.419) (1.4 Contractors' earnest / retention money Advances from customers Unclaimed dividends Payable for capital expenditure Provision for compensated absences .424) 336.745 (272.037 (262.727 4.239 million) pertaining to ICI Pakistan PowerGen Limited.239 million (2009: Rs 0. The valuation uses the Projected Unit Credit method.704) 2010 1.760 71.599 119.020.9 Medical cost trend is assumed to follow inflation.2 Accrued expenses Technical service fee / royalty Workers' profit participation fund .361.025.321 177. Trade and Other Payables Trade creditors .618 299.248) (1.75% 10.75% 2009 12.649 30.098. plant and equipment 336.321 million) to the provident fund and the defined contribution superannuation fund respectively during the year.Notes to the Financial Statements For the year ended December 31. * The unfunded liability included in the above table includes Rs 0.340. 6.987.25% 14.000 124.payable on termination of distributorship .799.104 76.321 133.105 272.898 8. 2010 Amounts in Rs ’000 2010 6.1 Bills payable Sales tax.1.647 1.905 291.810 20.995 35.153 80.109 1.992 2.75% Effect on the aggregate of the current service cost and interest cost Effect on the defined benefit obligation 35.698 million (2009: Rs 55.933 125.75% 32.394) (1.548 136.1.700 11.850 (1.184 20.321 Reversal Closing Opening 2009 Charge Closing (1.316 204.

280 million) against which Lotte Pakistan PTA Limited and KP Chemical Corporation Limited have issued counter guarantees to the Company.197 36.014 25 23.542 164.260 75. 9.204 204.105 312.3 This represents amount payable to Mortar Investments International Limited.948 368.104 174 15 1.323 53.934 243.350 9. Lahore.Amount paid on behalf of the Fund .note 28 Less: .1 164. The Company is of the opinion that the order was not justified and has filed an appeal against the order in the Environmental Tribunal in Lahore.573 2009 6.282 147. This figure is based on the actuarial valuation.5 9. 9.360 6.Deposited with the Government of Pakistan Balance as on December 31 8.448 14.599 Interest on security deposits from certain distributors is payable at 11.5 percent (2009: 7.036 2.017 92.1 The above balances include amounts due to following associated undertakings: ICI Paints UK (part of AkzoNobel group) ICI Paints (Asia Pacific) Pte Ltd (part of AkzoNobel group) AkzoNobel Paints Malaysia Marine Protective International Coating Malaysia (part of AkzoNobel group) C&P Residual (part of AkzoNobel group) AkzoNobel NV AkzoNobel Functional Chemicals International Paint Netherland (part of AkzoNobel group) ICI Packaging Coatings (part of AkzoNobel group) AkzoNobel Functional Chemicals BV AkzoNobel Functional Chemicals Pte Ltd AkzoNobel Surface Chemistry Pte Ltd ICI Paints Thailand (part of AkzoNobel group) ICI Paints Indonesia (part of AkzoNobel group) CR Netherlands (part of AkzoNobel group) AkzoNobel Car Refinishes BV 8. Guarantees issued by the Company in respect of financial and operational obligations of Lotte Pakistan PTA Limited pursuant to the Scheme of arrangement.187 164. as at December 31.141 72.4 8.827 3. 2009. Pursuant to this an order was passed by the EPA for violation of certain provisions of the 'Act'.103 82.336 137.178 91.190 million (2009: Rs 2.5 percent) per annum as specified in the respective agreements.3 ICI Pakistan Limited Annual Report 2010 93 .339 43.note 29 Interest on funds utilised in the Company's businesses at 60.214 161.631 93.248 148.392 1.00 percent (2009: 41.599 196. amounting to Rs 2.396 161. Workers' profit participation fund Balance as on January 1 Allocation for the year . Contingencies and Commitments Claims against the Company not acknowledged as debts are as follows: Local bodies Sales Tax authorities Others 14.2 8. which is pending.280 3.2 A notice was issued by the Environmental Protection Authority (EPA) against the Paints factory located at Ferozpur Road.822 310.911 26.400 101 5.105 3.592 2.25 percent) per annum .995 154 197 11.308 72.761 361.Amounts in Rs ’000 2010 8.

377 6.775) (734.175 (1.341.293.676 30.750 (75. 2009 Opening net book value (NBV) Addition/transfer (at cost) Disposal/transfer (at NBV) Depreciation charge Closing net book value (NBV) Gross carrying value basis At December 31.765 164.33 to 7.33 120.598 (94.193.201 2 to 4 3.1 Property. 10.377 6.628) 21.307) 234.note 10.829 8.001.789.305 23.211 47.493 2 to 4 3.165 45.515 30.082 128.515 901.202) 200.7 2009 Guarantee issued by the Company to a bank in respect of financing obtained by Senior Executives amounted to Rs 35 million (2009: Rs 35 million).443 719.670) (914. plant and equipment: Operating property.283 779.988) 162.159 million (2009: Rs 195.493 217.677.33 836.305) 68.945 5.742 7.746 128.822) (53. Commitments for rentals under operating lease / ijarah contracts in respect of vehicles amounting to Rs 164.765 68.962) 2.159 67.677.159 66.854 (678.470 56.082 8.314) (862.4 9. plant and equipment: Land Freehold Leasehold Lime beds on freehold land Buildings On On freehold leasehold land land Plant and machinery Railway sidings Rolling stock and vehicles Furniture and equipment Total 2010 Net carrying value basis Year ended December 31. 2010 Amounts in Rs ’000 2010 9.479.143) 26.166 million) are as follows: Year 2010 2011 2012 2013 2014 Payable not later than one year Payable later than one year but not later than five years 67.540) (10.648 2.312) 2.724 (2.077) (11.895.388 8.769 7.071 (104.5 10 to 25 10 to 33.2 The following is a statement of operating property.559.909 9.743.149 (4.858 (568.229) (63.359 5 to 10 1. Guarantee issued by the Company of Rs 133 million (2009: Rs 133 million) to a bank on behalf of its subsidiary ICI Pakistan PowerGen Limited for availing funded facility.087) 89.166 66.335 22.004 2.201 92.6 9.715 (636.820 (65. Commitments in respect of capital expenditure amounted to Rs 138.324. in accordance with the terms of employment.663 949.443 162.225.166 (18.598 8.837 (72) 2.001.871) (68.980 (32) (9.789.6 8.636 864.648 48.909 21.758 78.934 864.377 6.091 8.211 5 to 10 1.875 million).790.235 6.388 8.103) 725.835.186) 223.835. plant and equipment .721 (32.702 7.950) 234.034) 2.33 126.455 (36.33 to 7.166 10.695 (518.835. Plant and Equipment The following is a statement of property.741) 68.837 78.5 9.054) (22.702 836.080) (12.270 195.476 332.267.135 164.677.865) (10.783 17.800) 89.516) 26.702 27.702 836.746 58.110 10.621 1.680 1.939) 705.708.636 - 567.286 (549) (11.5 10 to 25 10 to 33.559.947) (13.493 864.314.256 (9.235 6.35 million (2009: Rs 23.33 .799 (564.189) (698.201 389.636 2.643) 223.648 - 31.210) 725. 2010 Cost/Revaluation Accumulated Depreciation Net book value Depreciation rate % per annum Net carrying value basis Year ended December 31.702 - 567.711) 705.855) (44.689 164.004 - 26.420 195.2 Capital work-in-progress .359 725.note 10.515 224.082 668.33 to 10 297 (297) 3.633 523.753.548) (10. 2009 Cost/Revaluation Accumulated Depreciation Net book value Depreciation rate % per annum 94 Annual Report 2010 ICI Pakistan Limited 836.789.829 8.516.754 (506.5 to 10 3.799 (565.5 to 10 2009 3.Notes to the Financial Statements For the year ended December 31.560 (2.33 to 10 297 (297) 3.201 836.829 8.309 (714.785 32.917 16.061) 200.553) 162.498) 21.211 455.837 133.835.504 (9.812 7.880 2.663 223.470 96. 2010 Opening net book value (NBV) Addition/transfer (at cost) Disposal/transfer (at NBV) Depreciation charge Closing net book value (NBV) Gross carrying value basis At December 31.

Karachi Jaffer and Sons. Color Bank and Awan Brothers. Roomi Paints.note 26 Administration and general expenses . Lahore Habibullah Khan.089 710 5.929 6.993 38.519 747 1.487 3.719 862. condition and obsolescence. Lahore Murtaza Khan Babar and Syed Farhat Abbas Jafri. The valuation was conducted by independent valuers.088 1.719 Hi-Tech Electronics & Machinery.157 788 14.924 70 194 28.500 10.000 are as follows: 2010 Mode of sale Plant and machinery Gas condenser & Various items Tinting Machines & Dispenser Tender Negotiation 27.note 25 Selling and distribution expenses .726 34.061 815.836 130.5 The depreciation charge for the year has been allocated as follows: Cost of sales .388 6.652.479 10.664 121. As at December 31. 2000.180 12. and Muhammad Akram Ghouri. Asian Paints.598 50.569. Awami Paints.1 Had there been no revaluation.318 77 144 1.917 3.095 4.035 26.207 million and Rs 1.114 217. 2010 plant and machinery included equipments held with Searle Pakistan Limited and Maple Pharmaceutical (Private) Limited (toll manufacturers).510 80 192 3 323 1.note 27 10.575.429 23. Karachi Syed Ghulam Mustafa.967 million. 1959 and September 30.4. Lahore .338 3.543 12.808 734 7.965 33. Chaudhry Paint House.111 Alfa Laval Middleeast Ltd. the net book value of specific classes of operating property.3 2009 Subsequent to revaluation on October 1.7 39.863 6.200 2.481 8.634 183. depreciated to reflect the residual service potential of the asset having paid due regard to age.583 20. Land was valued on the basis of fair market value.289 2.909 858.576 4.902 Tufail Iqbal & M Inam.100 3. Valuations for plant and machinery was the open market value of the asset based on estimated gross replacement cost.381.655 8.4 10.988 48.829 6..6 The following is a statement of capital work-in-progress: Civil works and buildings Plant and machinery Miscellaneous equipment Advances to suppliers / contractors 10.443 200.875 Details of operating property. Mandi Bahauddin Al Habib. Khurram Contractors. having cost and net book values as follows: Cost Net book value 4. plant and equipment would have amounted to: Net Book Value Freehold land Plant and machinery Rolling stock and vehicles Furniture and equipment 10. the land and plant and machinery were revalued again on December 15. Saad contractor. which had resulted in a surplus of Rs 14.100 3.889 21. Lahore Hi-Tech Electronics & Machinery.956 44.646 389. 2006 resulting in a net surplus of Rs 667.626 914. plant and equipment disposals having net book value in excess of Rs 50.869 million respectively.Amounts in Rs ’000 2010 10.784.2 nos Hino Dump Trucks Negotiation Auction 1.082 162.392 4.938 3. Karachi Cost Accumulated depreciation Net book value Sale proceeds Particulars of buyers Rolling stock and vehicles Honda City & Toyota Corolla Honda Motorcycle Furniture and equipment Water cooling coil and Chiller Auction 467 2009 Plant and machinery Dust extraction unit and other items Auction Tinting Machines Negotiation Rolling stock and vehicles Toyota Corolla . Karachi ICI Pakistan Limited Annual Report 2010 95 Auction Auction 1.719 3.

781) Total 57. 2010 Amounts in Rs ’000 11.500 710.note 26 Administration and general expenses .1 The amortisation charge for the year has been allocated as follows: Cost of sales .352 65.386) 48.500 712.605) 48.136 (21.102 11.750) 180.000 12.136 (21.633 (198.at cost Unquoted Subsidiary .Notes to the Financial Statements For the year ended December 31.ICI Pakistan PowerGen Limited (wholly owned) .746 2.781 (168. 96 Annual Report 2010 ICI Pakistan Limited .note 25 Selling and distribution expenses .991 87.352 65.700 (7.700 12. 306.Arabian Sea Country Club Limited 2.145) 65.145) 65.565 19.1 The value of the Company's investment on the basis of net assets of the Subsidiary as disclosed in the audited financial statements for the year ended December 31. Intangible Assets 2010 Software Net carrying value basis Year ended December 31 Opening net book value (NBV) Additions (at cost) Amortisation charge Closing net book value (NBV) Gross carrying amount At December 31 Cost Accumulated amortisation Net book value Rate of amortisation % per annum Licenses Under development 65.700) 168.note 27 7.750 3. 2010 amounted to Rs.102 378.000 ordinary shares (2009: 7.352 2009 Net carrying value basis Year ended December 31 Opening net book value (NBV) Additions (at cost) Amortisation charge Closing net book value (NBV) Gross carrying amount At December 31 Cost Accumulated amortisation Net book value Rate of amortisation % per annum 7.000) of Rs 100 each Others Equity security available for sale .1 7.000 710.759 20 87.100.706 million (2009: Rs 258.636 639 3.759 226.781) 20 2010 2009 7.700) 168.145 (177.700 (7.note 12.364 (8.991 20 to 50 209.531) 180.500 2.425 7.500 712.100. Long Term Investments .781 (168.426 million).852 (29.352 65.439 29.

721 65.547 626. Long-Term Loans .756 The above loan balance includes an amount of Rs 0. These loans are interest free and granted to the employees including executives of the Company in accordance with their terms of employment.237 20. 13. This loan is repayable in nine equal semi annual installments commencing from October 1. 2009: Rs 11.637 54.073 34.less than three years but over one year . Long-Term Deposits and Prepayments Deposits Prepayments 22.3 Reconciliation of the carrying amount of loans to Directors and Executives: Opening balance at beginning of the year Disbursements Repayments Balance at end of the year 121.078 14.more than three years 13.058 million.486 Total 121.595 million) in respect of house building relating to key management personnel.486 324.801 330.264 2009 200.401 ICI Pakistan Limited Annual Report 2010 97 .415 44.Considered good Due from Subsidiary .509 million (2009: Rs 125.424 26.211 7. Executives and Employees Motor car Due from Directors and Executives .Amounts in Rs ’000 2010 13.1 Due from Executives and Employees .801 This represents loan given to ICI Pakistan PowerGen Limited (wholly owned subsidiary) of Rs 200 million carrying mark-up at 3 months KIBOR + 2%.577 House building 51.873 17.note 13.note 13.801 Due from Employees Less: Receivable within one year . 2011.215 (52.117 79. Stores and Spares Stores (include in-transit Rs 20. Aga (Director). Loan outstanding during the year relates to Mr.note 15.556) 153.Unsecured .688 million) Spares Consumables Less: Provision for slow moving and obsolete items .144 Total 153.568 25.1 13.note 13.119 96.3 Less: Receivable within one year .613 493.762 27.847 19.164 130.415 102.000 130.801 70.4 13.180 146.270 82.801 512.771 450.799 76.019 77. 15.458 21.596 37.778 146.362 million).338 60.293 (59.306 77.660 608.1 36. The maximum aggregate amount of long-term loans due from the Executives at the end of any month during the year was Rs 161.367 175.Long term portion .2 177.654) 121.867 29.585 40.756 84.319 million (2009: Rs 1.072 111.765 146.671 496.note 18 101. Ali A.463 130.997 37.5 Loans for purchase of motor cars and house building are repayable between two to ten years.486 69. Due from Directors.756 25.694 108.2 13.note 18 Outstanding for period: . who was provided this loan as per his terms of employment.

813 55.661 40.617 (5.Secured .446.282.525 113.701 83.Notes to the Financial Statements For the year ended December 31.note 39.note 16.997.524 million) which are held with toll manufacturers namely Searle Pakistan Limited.Discounts payable on sales 343.510 (18. 148.242.608 812. NovaMed Pharmaceuticals and Polymer International (Private) Limited. Epla Laboratories (Private) Limited.553 2.092 48.244.463 267.2 Work-in-process Finished goods (include in-transit Rs 9. 2010 Amounts in Rs ’000 2010 15.869 118.120 343.225 3.000 (32.813 3.873 million) .253 792.671 64.786.525 3.23 million) Less: Provision for slow moving and obsolete stocks .677 1.631 1.865 38. Stock-in-Trade Raw and packing material (include in-transit Rs 436.916 98 Annual Report 2010 ICI Pakistan Limited . 2009: Rs 9. 17.169.1 .463 68. 2009: Rs 219.Unsecured Considered doubtful Less: Provision for: .Raw material .1 Movement of provision in stock-in-trade Provision as at January 1 Charge for the year .100 175.941.365 1.000) (28.285 277.669) 118. Trade Debts Considered good .062 155.note 27 Write-off Provision as at December 31 111.338 16.585. Breeze Pharma (Private) Limited.944 54.note 16.1 Movement of provision in stores and spares Provision as at January 1 Charge for the year .990) 111.6 .798) 155.490 million.note 27 Reversal Write-off Provision as at December 31 118.813 Stocks amounting to Rs Nil (2009: Rs 18.887 million. Maple Pharmaceutical (Private) Limited.870 1.453 919.341 million (2009: Rs.345 63.867 277.755 974.663 million) are measured at net realisable value and has been written down by Rs Nil (2009: Rs 1.408 3.631 249.2 Raw and packing materials include Rs 283.490 1.107.786.822 527.490 449.525 1. 16.363.610 356.62 million) to arrive at its net realisable value.Doubtful debts .743 792.229 1.771 2009 104.Finished goods 87.671 16.

383 694.554 78.815 78.383 677.913 5. 20.note 20.355 5.280 16.982 606.note 13.829 16.65%).222 283.1 .note 18.245 million and Rs 7.494 17.073 283.note 13.208 677.Current portion of long term loan .3 ICI Pakistan Limited Annual Report 2010 99 .738 452. sales tax and octroi refunds due Due from Associate .012 6.721 9.2 Insurance claims Commission receivable Interest income receivable from subsidiary Interest income receivable Rebates receivable Others 269.342 10.700 430.761 200.547 406. Loans and Advances Considered good Loans due from: Directors and Executives .111 17.note 39.438 19.739 8.Unsecured .2 Employees .2 Due from Subsidiary: .note 20.000 328.859 8.119 20.003 2.6 18.427 184.Amounts in Rs ’000 2010 18.1 18.note 18.516 179. Other Receivables Considered good Duties.620 590.058 123.117 606.722 25.65% (2009: 3 months KIBOR + 1.225 11.429 443.128 4.341 16.262 16.626 60.000 377.120 406.245 421. Trade Deposits and Short-Term Prepayments Trade deposits Short-term prepayments 22.111 Considered doubtful Less: Provision for doubtful receivables .887 39.1 & 20.280 212.446 million) respectively.674 21.965 47.620 601. The maximum aggregate amount of advances due from the Directors and Executives at the end of any month during the year were Rs 3.2 A standby finance facility of Rs 300 million (2009: Rs 300 million) is provided to ICI Pakistan PowerGen Limited (wholly owned subsidiary) which is repayable on demand at a markup rate of 3 months KIBOR + 1.982 623.809 590.997 22.note 13.917 212.739 Considered doubtful Less: Provision for doubtful loans and advances .1 Advances to: Directors and Executives .805 4.2 Employees Contractors and suppliers Others 2009 44.694 27.722 10.233 4.364 million (2009: Rs 3.192 6.120 414.244 85.967 million and Rs 4.

795 169.1 2009 The maximum aggregate amount due from ICI Omicron B.383 1.721 80.160 4.V. The markup return on these deposits ranges between 11. Cash and Bank Balances Short term deposits .30% per annum (December 31.420 4.000 1. 2010 at relevant KIBOR + 1.633 11.1 Current accounts In hand .Cash 2.661.V.823 4.Notes to the Financial Statements For the year ended December 31.691 million) and carried mark-up during the period ranging from relevant KIBOR + 0.805 85. at the end of any month during the year was Rs 80. Short-Term Financing The facilities for running finance available from various banks amounted to Rs 2.350. wholly owned subsidiary of AkzoNobel N.37 percent per annum).471 million (December 31. 2010 Amounts in Rs ’000 2010 20.V.755 million (2009: Rs 81.000 936.3 Movement of provision for doubtful receivables Provision as at January 1 Charge for the year .30% to 11. 2009: 12.75% to 3.note 27 Reversal Provision as at December 31 17.942 14. 2009: Rs 2.1 These are placed with various banks with maturity up to January 2011. 100 Annual Report 2010 ICI Pakistan Limited .720 230.Cheques .004 (1.47% per annum with an average mark-up rate as on December 31.64 to 17.822 3.note 21.71%.927.251 21.383 21.586 89 46 78.982 17.2 20. 22. ICI Swire Paints (Shanghai) Limited (part of AkzoNobel group) AkzoNobel Functional Chemicals 78.978 million).468.533 (150) 17.405) 16. The facilities are secured by hypothecation charge over the present and future stock-in-trade and book debts of the Company and first pari passu charge over plant and machinery of Soda Ash Business of the Company. The above balances include amounts due from following associated undertakings: ICI Omicron B.489.225 20.

263.080 753.157.008.934 14.608 99.854 326.184 23.007.281 2.359 97.539 39.442.833 158.115 811.207 12.868.933 44.115.901 1.456.383.661.285 6.840 5.810.310 1.120 1.800 93.006 121.821 1.088.522 4.507 16.317.702.888 158 18.080.820 304.370.383 462.605 16.543 75.347.646 1.794.470 23.076 216.840 1.910 1.219 276.388 1.675.547.4 Segment liabilities 2.497 23.055 25.828 11.031 3.115.402.516.929 2.180 4.037 22.571.947 1.850.379 84.873 133.260 6.546 272.991 223.686.069.879 84.005 3.111 1.897 5.872 6.3 23.611 448.913 2.110 6.949.030.345 13.703.147 6.988.069. Operating Segment Results Polyester Note Sales Afghanistan Bangladesh India South Africa United Arab Emirates Others Inter-segment Local Commission / Toll income Turnover 2010 2009 Soda Ash 2010 2009 Paints 2010 2009 Life Sciences 2010 2009 Chemicals 2010 2009 Company 2010 2009 18.433 145.714 22.991 56.657 6.230 6.449 837.033 326.926 88.869 3.598 1.030.810 2.492 1.042.953 419.299.740.740.675.949 262.360.107 420.223 765.793 6.299 2.242.699 4.623 6.944 36.105 52.621.827 3.934 25.345 13.004 290.225.160 21.015 943.623 105.603.645 419.238 72.712.583 137.033.298 1.Amounts in Rs ’000 23.516 Unallocated liabilities 2.114 493. commission & toll income Cost of sales 25 Gross profit Selling and distribution expenses - - 1.883 6.824.010.672 4.674.692 11.535 148.333.821 2.021 5.795 10.517 44.850 35.688 13.208 4.242 438.115.489 26.015 23.073.258 6.088 7.790 28.092 1.681.6 335.088 3.493 27.151.074.173 112.5 Non-cash items (Provision for non-management staff gratuity and eligible retired employees' medical scheme) Depreciation & amortisation 10.242.172.087 32.883 14.927 374.861.422.264.575.976 83.554 8.821 3.012 1.242 718.614 982.101 276.688 18.359 97.755 15.482 4.041 5.285 52.774 2.526 1.986.590.438 6.359.615 448.895.709 7.089 322.236.030 3.957 39.522 6.420 38.542 8.605 16.075 725.006.766.249 28.896.872.740.052 8.545 58.892 132.508.290 28.178.885 461.654 16.2 Unallocated assets 4.262.136.227 23.191 2.474 2.134 1. There was no major customer of the Company which formed 10 percent or more of the Company's revenue.384 128.705 2.980.645 25.429.621.131.899 417.927 150.556 3.022 448.770 19.790 28.195 7.539 3.338.722 6.933 52.180 810 810 3.172 109.716 870.706.595.653 6.180 4.635 1.875 32.599 54.030 8.8 Inter-segment pricing Transactions among the business segments are recorded at arm's length prices using admissible valuation methods.124 1. 23.941.376 148.785 23.344.470.882 76.232.030 86.369.339 1.9 ICI Pakistan Limited Annual Report 2010 101 .356.365.064 3.754 Sales tax Excise Duty Commission and discounts to distributors and customers Net sales.386 1.573 2.284 17.822 1.826 13.873 767.388.566 17.119 - - 290.420 2.040 436.010 417.661 1.819.022.010 510.033.009 107.574 309.609 480.476 27.969.270 1.875 2.331.403.271 2.800 88.889 35.998.447.620.840 3.364 27.573 31.517 282.881 88.400 28.027.719 1.960 239.197.038.128 291.969.811 816.680.1 Segment assets 265.688 18.881 6.979 49.793 105.110.345 1.463.580.350.488 7.033.644 176.800 6.328 900.578 5.284 477.866 169.972 986.010 2.748 352.309 5.571.600 469.254 106.508 90.225.579 60.174 Administration and general expenses 27 Operating result 23.761.743 1.265.016 6.242.573 475.008 23.989 211.708 895.210 156.580 381.955.700 140.297.289 3.892 26 72.539 1.839 1.236 203.968 2.387 99.587 353.882 76.121 5.160 1.050 1.606.599 15.508 6.036 424.706 374.7 Capital expenditure 109.688 746.

Notes to the Financial Statements For the year ended December 31.675.657 24.949.2 Long term Investments .443.754 (276.2 Unclaimed dividends .703.005 24.672 16.110 (417.926 (417.586 712.951 2.820 299.350.note 12 Total Assets 17.227 6.000 80. 24.008.497 460.note 21 Due from Associates .265. assets and liabilities Turnover Total turnover for reportable segments .030.note 8.2 Cost of sales Total cost of sales for reportable segments .927. 2010 Amounts in Rs ’000 2010 2009 24.3 Assets Total assets for reportable segments Taxation recoverable Bank deposits .399.574 305.548 7.000 78.015 102 Annual Report 2010 ICI Pakistan Limited .573) 32.573) 22.690 23.note 20.500 21.1 Reconciliations of reportable segment turnover.4 Liabilities Total liabilities for reportable segments Accrued interest / return on unsecured loan .109 4.861.420 712. cost of sales.030.note 8 Total liabilities 6.532.819.note 23 Elimination of inter-segment turnover Total turnover 39.635 545.240 3.note 25 Elimination of inter-segment purchases Total cost of sales 28.500 22.506 32.766.420) 39.575.420) 28.647 4.544 6.754.181 24.578 (276.422.

037 930.643.713 17.674.080.877.505 1.854 1.886 3.332) 2.030.757) 15.745.621 1.554) (246.986.114 104.333.775.229) 20.242 4.1 Staff retirement benefits Salaries.404 (725) 1.368 324.184 1.057 (203.405.952.000) 1.021 100.899 3 11 4.893 (10.109 221.975) 1.782 21. ICI Pakistan Limited Annual Report 2010 103 .195 1.942 (48.021) 837.709 887.835 26. wages and benefits Stores and spares consumed Conversion fee paid to contract manufacturers Oil.376 27.046.124 3.722 1.193.478 224.630 13.505) (233.573 15.024 846 15.852 85. Cost of Sales Polyester 2010 Raw and packing materials consumed Opening stock Purchases Inter-segment Others 13.076 400 11.969) 3.518 18.617) 23.604.655) 961.014.851 15.805 54.980 Closing stock .172 17.502 2009 Soda Ash 2010 2009 Paints 2010 2009 Life Sciences 2010 2009 Chemicals 2010 2009 Company 2010 2009 1.466.note 16 Cost of goods manufactured Opening stock of finished goods Finished goods purchased 106.1 319.350) 10.note 16 Provision for obsolete stocks .612 973 3.470 10.205 23.395.368 2 9 186.263.928.note 27 (725.672 134.866 455. wages and benefits include Rs 162.489) 741.179 23.812 (259.681 million (2009: Rs 193.690 37.368 Depreciation & amortisation charge .801 417.080 74.114) 844.163) 11.312 3.822.235 6.394.911.174 205.658 1.263.852 10.585 28.674.547) (246.757 1.510 840.458 954.436) 1.965 1.797 882.316 16.882.824 (1.854 1.464) 1.160.791 246.655 13.586 64.406.163 320.861.539 30.661 (12.255 2.627 - 423.070) 945.927 1.928.470 840.405 499.470 944.590 392.103.962.651 4.952 114.841 (74.686 245.065 612.217 2.250) 2.388) 15.217 3.730 (146.148 108.010 24.931.003 476.826.Amounts in Rs ’000 25.542 83.201 191.074.235 2.861 96.339 (21.621 1.877.828 2.578 25.218.109 1.155 1.039.115.811 694 1.705 1.251.210 26.573 2.205 141. gas and electricity Rent.862 10.800 3.140 15.284.585 92.811) 928.229 819.709 3.750 24.345.734 25.386 (9.070.334 1.976) 3.598 (2.251.191.685 3.932 (612.461.163) (1.523 8.956 (54.078 776.098 (1.637 15.698.883 271.600) 2.600 60.236 91.614 (20.241 3.067 21.622.743 (10.839) (837.755 43 28.341 7.234 17.658) (2.804 (100.938 269.955.489 111.753 33.284 (55.097 207.647 20.237 (24.070.908 (285.404 509.190 201.932.119.497 950 1.010 (5.073 22.218.268 - 75.080 146.737.140 4.315 2.969.431 496 866.661 (24.248 212.942.896.554 5.530 276.338 1.857 300 3.087 5.146 90.852 10.912) (207.236 695 1.note 10.234 4.734 Closing stock of finished goods .834 4.706 (282.436 370.188 3.379 16.785 655 12.838) (141.906.489.328.230.679 417.849 15.681.270 67.285) 2.941.510) 28.540 81.951) 2.208 837.416 8.211 3.615) 5.393.987 285.929 11.700 3.269 (85.553) 26.676) 2.568 55.723 10.434 83.476 973.257.110 (38.236) (58.420 2.290.419.582 332.944.075 1.011.215 (1.163.539) 15.024 2.211 64.350 512.794.704 276.422.803 19.118 62.963 Technical fees Royalty General expenses Opening stock of work-in-process Closing stock of work-in-process .879 2.069 118.030.368 336.027) (509.794.620.815 2.note 16 Raw material consumed Salaries.383.420 19.950.445 1.362.262 2.024 15.748.217 1.942.580.5 & 11.586) (774.128 9.016 119.783 (83.893 27.539 2.612) 13.286.368) 2.279 57.177 (15.225 30.008 452 5.583.244 12.593 1. rates and taxes Insurance Repairs and maintenance (867.630 14.602.709 776.670 841.851 428 1.373 19.082 540.901 (11.179 25.055 million) in respect of staff retirement benefits.548.199 39.135.629) 19.151.444 3.155 930.217 973.303.

579 9.961 132.938 8.046 44.147 1.411 18.862 64.325 12.005 40.715 2.372 5. heating and cooling Depreciation & amortisation charge .759 1.652 3.337 32.510 38.860 11.567 3.064 27.531 2.530 2.882 774 10.192 2.033 987 1.299.082 7.478 6.036 11.142 2.063 896 922 434 873 220.1 Outward freight and handling Travelling expenses Postage.500 69.972 1.163 15 40. rates and taxes Insurance Lighting.938 1.395 63.1 Staff retirement benefits Salaries.631 2.538 12.260 75.078 3.149 55.626 7.000 55.182 3.487 110.513 4.891 25.189 23.005 381.017 140.637 134.593 million) in respect of staff retirement benefits.204 117.298 - - - 2.651 4.447 17.723 7.164 63.504 75.274 64.615 - 21.114 11.438 3.407 9.969 24.828 1.521 405.572 628.416 72.223 179.5 & 11.297 184.072 725.807 197.949 6.647 3.910 23.481 8.814 57.660 185.000 6.note 20.897 6.965 239.179 86.533 120.973 128.061 290.271 2.447 15.617 59.449 148.772 million) in respect of staff retirement benefits.646 9. wages and benefits include Rs 81.630 15.855 2.124 2.896 145.347 15.trade .948 1.206 423 8.098 27.640 9.858 6.144 - 5.250 5.480 17 21.505 16.174 26.778 1. Selling and Distribution Expenses Polyester 2010 2009 Salaries and benefits Repairs and maintenance Advertising and publicity expenses Rent.151 31.676 3.969 61.093 35.065 38.247 508.732 5.581 1.000 40.239 16.note 39.701 72.452 587 316 1.Notes to the Financial Statements For the year ended December 31.191 40.1 Provision for obsolete spares .349 1.018 7.070 6.804 291.719 13.1 Travelling expenses Postage.617 344.784 28.675 735 3.791 1.499 112.316 151.516 14.285 20.236 277 149.683 195.352 1.569 million (2009: Rs 67.857 4.000 12.934 1.028 1.273 168.060 692 4.568 493.442 2.413 265.999 91.261 12.618 9.945 30.821 5.079 10.953 30.626 8.178.980 1.589 203.095 2.813 million (2009: Rs 132.5 & 11.439 11.089 11.3 & 39.6 Provision for obsolete stocks .590 81.930 3.153 13.262 2. telegram.986 1.703 1.107 6.544 12.573 4.111 9. wages and benefits include Rs 148.655 134.728 66.134 543 2.672 1.121 19.471 1.369 1.873 14.241 11.650 20.344 1.948 44.491 1.100 45.879 3.049 5.171 3.543 59 7.249 8. telegram.676 9.567 20.173 327 69.088 24.688 21.473 14 1.138 2.759 56.329 68.040 - 477 623 - 7 401 - 641 - 139.Note 16.479 780 1.674.700 2.076 64.991 5.404 3.877 1. rates and taxes Insurance Lighting.075 172.note 10.Note 15.6 . Administration and General Expenses Salaries and benefits Repairs and maintenance Advertising and publicity expenses Rent.518 85.323 6.1 Provision for doubtful debts .652 448.003 866 680 425 1.284 3.866 1.801 26. 27.897 16.588 5.781 13.140 3.980 548.537 262.708 8.872 788 649 3.696 1.933 253.200 193.681 2.664 93.282 1.others . 2010 Amounts in Rs ’000 26.013 2.077 657.080 12.491 4.454 5.340 1.591 122 15.837 2. heating and cooling Depreciation & amortisation charge .329 37.302 7.892 1.610 - 381 - 138.172 191.470.531 1.100 10.932 10.551 552 3. telephone and telex General expenses 129.332 10.954 1.022 529 7.522 2.242 5.195 22.365 300.063 765.622 137.065 29.678 20.999 7.986 424.149 229. 104 Annual Report 2010 ICI Pakistan Limited .note 10.586 352.381 817 739 3. telephone and telex General expenses 2010 Soda Ash 2009 Paints 2010 2009 Life Sciences 2010 2009 Chemicals 2010 2009 Company 2010 2009 46.1 Staff retirement benefits Salaries.332 19.901 13.137 3.807 6.148 34.

815 650 8.795 million (2009: Rs 13. Suhail Aslam Khan and Ms.Seemi Saad.note 8.note 29.426 29.880 29.3 Workers' welfare fund 8. Mr.105 82. Executives of the Company are amongst the Trustees of the Foundation. ICI Pakistan Limited Annual Report 2010 105 .600 Donations include Rs 15. 30. Waqar A Malik.note 30.629 4.1 Donations .277 196.940 59.768 244 14.948 94.015 635 6.3 Discounting charges on receivables Exchange losses Interest on security deposits and others 6.012 167. Chief Executive.995 69.964 57.768 459.983 48. and ICI Pakistan PowerGen Limited). Other Operating Income Income from related parties Return on loan due from Subsidiary Service fees from related parties .2 2009 1.Amounts in Rs ’000 2010 28. Karachi). in accordance with the Service Agreements based on commercial terms between the companies.454 7.293 282.541 6.988 5.420 486.note 29. Ali Asrar Aga and Mr.2 Workers' profit participation fund .822 62.564 2.906 167.464 161.636 30.761 76.770 1.note 8.1 Return from other financial assets Profit on short-term and call deposits Income from non-financial assets Scrap sales Gain on disposal of property. Other Operating Charges Auditors' remuneration .97 million) to ICI Pakistan Foundation (Head office. plant and equipment Others Provisions and accruals no longer required written back Income on technical assistance Income on sale of Adhesive to Henkel Sundries 15.235 22.428 163.256 104.600 16.950 1.704 247.662 44.980 60.211 56. Directors of the Company and Mr.383 74.1 This represents amount charged by the Company for certain management and other services rendered to its related parties (Lotte Pakistan PTA Limited.1 Auditors' remuneration Audit and Group reporting fee Half yearly review and other certifications Out of pocket expenses 5.051 1.153 303. Financial Charges Mark-up on short-term financing Interest on workers' profit participation fund .590 4.724 10. upto September 2009. Feroz Rizvi.587 2.235 29. Mr.

974 7.516 1.188 37.768 2.964 106 Annual Report 2010 ICI Pakistan Limited .072.302.802.506 1.721 418. Directors and Executives of the Company were as follows: Chairman 2010 Managerial remuneration Retirement benefits Group insurance Rent and house maintenance Utilities Medical expenses Number of persons 1.973 387 4.069 4 2009 Executives 2010 2009 Total 2010 2009 33.163 122.656 19. Earnings per share .957 16.333) 1.note 7 Net tax charged . Chief Executive.796 107.616 1 Directors 2010 34.992 (6.1 31.306.791 856.027.428.230 1.062 36.540 (154.022 775 91 38.850) 1.363 6.768 3. including all benefits.690 1.310 15. to the Chairman.731.032 335 148.075.457.362 42 6.059 699.044.680 30.540 1. 2010 Amounts in Rs ’000 2010 31.162 1.762 4.826 3.802. Remuneration of Directors and Executives 17.027.813 (17.374 554.Notes to the Financial Statements For the year ended December 31.321 42 5.712) 5.512 30.note 31.135 5.814 562.300 Rupees Earnings per share 33.636 41.50 14.981 158.368 154.394 1.185 127.780 1.1 Tax reconciliation Profit before tax Tax @ 35% Prior years' tax charge Tax impact on income under FTR of the current year Permanent difference Other Net tax charged 32. Taxation Current Prior years Total current tax charge Deferred .162 1 Chief Executive 2010 25.302.031 2.73 The aggregate amounts charged in the financial statements for the remuneration.Basic and diluted Profit after taxation for the year 2.395 938.555 84 221 42.439) 473.230 1 2009 1.431 19.268 647 203 32.457.661 381 4.013 774.300 138.738 Weighted average number of ordinary shares in issue during the year Number of shares 138.655 1 2009 21.439) (40.377 (17.685 126 419 5 5.410 328 5.523 474.209 7.383 144.863 501.690 2009 490.713 120.

249 million) for attending board and other meetings which is not included above. 0. other than those which have been specifically disclosed elsewhere in these financial statements are as follows: 2010 Subsidiary Company Purchase of goods. key employees (note 33) and staff retirement funds (note 6). The Chief Executive is provided with Company maintained furnished accommodation and free use of Company car.335 6.).V.). companies where directors also hold directorship.487 4. Out of variable pay recognised for 2009 and 2008 following payments were made: Paid in 2010 relating to 2009 Chief Executive Directors Executives Other employees 13. This includes fees paid to directors amounting to Rs.274 million (2009: Rs 24.114 million (2009: Rs 141. 0.131 153. The above balances include an amount of Rs 188.1 In addition to this.980 60.225 million (2009: Rs 3.9 million) payable to certain employees has been recognised in the financial statements which is payable in 2011.Amounts in Rs ’000 33. local associated company.328 Paid in 2009 relating to 2008 11.629 96.795 5.000 2009 33. Transactions with Related Parties The related parties comprise parent company (ICI Omicron B.2 33. a special bonus of Rs 12. materials and services Provision of services and other receipts Return on loan to Subsidiary Loan to subsidiary company . ICI Pakistan Limited Annual Report 2010 107 . Aggregate amount charged in the financial statements for remuneration to three Non-executive Directors was Rs 3. to employees. This amount is payable in 2011 after verification of achievements against target.(net of repayment) Stand by finance facility availed by Subsidiary Associated companies Purchase of goods.291 15.051 676.429 789.356 million) relates to post employment benefits.218 13. Details of transactions with related parties.440 126.672 1.752 37.600 131.000 283.529 125. materials and services Provision of services and other receipts Sale of goods and materials Dividends Donations 118.400 92.359 million) on account of remuneration of key management personnel out of which Rs 26.970 956.765 11. directors of the Company.228 million).052.0 million (2009: Rs 28.980 69.003 1.3 The Directors and certain Executives are provided with free use of Company cars in accordance with their entitlement. ultimate parent company (AkzoNobel N. has been recognised in the current year.9 million (2009: Rs 209.192 181. an amount of Rs 228.048 33.750. Further.V.099 1.220 million (2009: Rs.163 33.4 34. related group companies.444 9.8 million) on account of variable pay.

000 20.500 33.741 8. and reviews the adequacy of the risk management framework in relation to the risks faced by the Company.note 35. Fair Value of Financial Assets and Liabilities The carrying amounts of the financial assets and financial liabilities approximate their fair values and is determined on the basis of non observable market data. 37. The capacity of Paints and Chemicals is indeterminable because these are multi-product plants. 108 Annual Report 2010 ICI Pakistan Limited .note 35. through its training and management standards and procedures.2 Chemicals .477 22.Notes to the Financial Statements For the year ended December 31. The Company. The team regularly meets and any changes and compliance issues are reported to the Board of Directors through the audit committee.000 Production Annual Name Plate Capacity 122.1 35. Plant Capacity and Annual Production . Market risk comprises of interest rate risk.445 278.650 34.000 2009 Production 129. The Company's overall risk management policy focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Company's financial performance.748 9.note 35. currency risk and other price risk.1 Paints . The executives management team is responsible for developing and monitoring the Company’s risk management policies.700 123.1 Risk Management Framework The Board of Directors has overall responsibility for establishment and over sight of the Company's risk management framework. 37. interest rate risk and price risk).082 23. Market Risk Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Production was below name plate capacity due to gas curtailment. Financial Risk Management The Company's activities expose it to a variety of financial risks: market risk (including currency risk. credit risk and liquidity risk.000 350. The audit committee oversees compliance by management with the Company’s risk management policies and procedures.000 20.580 35.2 Sodium Bicarbonate 122.000 350. 2010 Amounts in Rs ’000 35. Risk management systems are reviewed regularly by the executive management team to reflect changes in market conditions and the Company’s activities.642 269.in metric tonnes except Paints which is in thousands of litres: 2010 Annual Name Plate Capacity Polyester Soda Ash . aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations. 38.2 36.

398 Trade and other payables 107.562.789 1.859 125.859 17.007 483.420 504. which.87 56.1 15 59.371 15 167. 38.109 Due to Associates . Foreign currency risk arises mainly where receivables and payables exist due to transactions entered in foreign currencies.06 ICI Pakistan Limited Annual Report 2010 109 .2 Cash and bank balances Trade and other payables Accrued interest / return on unsecured loan .632 663.641 Other receivables 10.105 30.986 (60.293 (5.note 20.186) 2009 11.69 127. At the reporting date the interest rate profile of Company's interest-bearing financial instruments were: Carrying Amount Fixed rate instruments Financial assets .510) (1.75 0.267) Trade debts Other receivables Due from Associates .700) 2.420 80.607 1.09 85.236 (430.52 Spot rate as at December 31 2010 2009 Rupees 114.55 113.427 4.340 62. the impact on the profit after tax for the year would have been Rs 4.note 8.719 26.667 123.774 1.235. purchases and borrowings. SGD EURO USD GBP JPY 2010 Trade debts 9.993) 3.000 (80.1 Interest Rate Risk 2009 Interest rate risk is the risk that the fair values of future cash flows of a financial instrument will fluctuate because of changes in market interest rates.30 85.800 57.647 4.note 20.186 1.87 121.72 1.816) 5.37 84.805 62.2 135 78. The Company is exposed to foreign currency risk on sales.687.Note 8 Variable rate instruments Financial assets . Sensitivity analysis for variable rate instruments If KIBOR had been 1% higher / lower with all other variables held constant. the forward foreign exchange contracts were not available for imports in 2010 in accordance with State Bank of Pakistan instructions.812 Due from Associates .668 90.000 3.180 (1.1 Gross balance sheet exposure 4. therefore a change in interest rates at the reporting date would not affect profit and loss.646 5.293) Significant exchange rates applied during the year were as follows: Average rate for the year 2010 2009 Rupees per Rupees EURO USD GBP JPY SGD 113.350.789.207 7.note 8.000 Sensitivity analysis for fixed rate instruments The Company does not account for any fixed rate financial assets and liabilities at fair value through profit or loss.278.293 5.75 132.Note 21 Financial liabilities .927.846.029 511.994) 80.83 million).2 305.287 202.Note 13 & 18 2.97 62.84 81.81 0.759 299.916 662.580 21.800 2.91 60.05 66.Amounts in Rs ’000 2010 38.24 137.369 1.000 (71.824) 2.83 million (2009: Rs 4.18 131.964) (573.824 (30.586 Cash and bank balances 98.992.227 10.2 Due to Associates .436.665 11.665 Gross balance sheet exposure (15) (156.note 8.note 8.294 Accrued interest / return on unsecured loan . are entered in a currency other than Pak Rupees.2 Foreign currency risk Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. However.300 483.85 0.

To mitigate the risk.449.893 12.700 464.note 21 712.131 30.327 27.782.461.456.893.788.3 The Company has placed its funds with banks which are rated A-1 by Standard & Poor's and P-1 by Moody's.165 299.449.500 330.333. trade debts and loans and advances at the reporting date is as follows: Not past due Past due but not Impaired: Not more than three months Past due and Impaired: more than three months and not more than six months more than six months and not more than nine months more than nine months and not more than one year more than one year Less: Provision for: .4 The ageing of bank balances.490 10.378 193.631 8.751 5.687 5. To reduce exposure to credit risk the Company has developed a formal approval process whereby credit limits are applied to its customers.note 14 Trade debts . Financial Assets .note 17 Loans and advances .620 354. 39.317 63. where possible.031.171 491. The management also continuously monitors the credit exposure towards the customers and makes provision against those balances considered doubtful of recovery.239 6.465 4.note 12 Long term loans .598 39.739 21.2 million). The Company does not have significant exposure to any individual counterparty.954.Secured . Credit Risk Credit risk represents the accounting loss that would be recognised at the reporting date if counter-parties failed completely to perform as contracted.Doubtful loans and advances 343.Notes to the Financial Statements For the year ended December 31.note 13 Long term deposits .Unsecured 494.598 39.867 590.264 22.note 19 Other receivables .463 406. cash security deposit and bank guarantees.873 792.002 25.709 5.696 6.500 324.note 20 Bank balances .251 110 Annual Report 2010 ICI Pakistan Limited 712.801 21.352 43.2 39.722 22. by way of inland letters of credit.211 919.902 7.630 .867 4.849 281.532 277. 2010 Amounts in Rs ’000 2010 2009 Sensitivity analysis Every 1% increase or decrease in exchange rate with all other variables held constant will increase or decrease profit after tax for the year by Rs 21.Doubtful debts . Outstanding customer receivables are regularly monitored.662 7.709 545.647.1 Financial Assets Long Term Investments .110 6. The Company's maximum exposure to credit risk at the reporting date is as follows: 39.7 million (2009: Rs 23.674 122.483 606.120 285.333. the Company has a system of assigning credit limits to its customers based on an extensive evaluation based on customer profile and payment history.245 336.428 7. Business with customers is also secured.note 18 Trade deposits .470 7.

624 18.640 (57.620 Total 285.972 60.Doubtful debts .100 6.110 137.137 232.691 179.751 320.308 4.985 18.490 10.1 The recommended approach for provision is to assess the top layer (covering 50%) of trade receivables on an individual basis and apply a dynamic approach to the remainder of receivables.781 201.782.000 400.590 14.408 183.264 516.361 343.085 22.872) 354.490 10.751 141.751 5.631 139.614 606.120 2.687 2009 138.Doubtful debts .6 Movement of provision for trade debts and loans and advances: Trade Debts Opening Additional provision .719 6.Doubtful loans and advances 66.120 285.577 39.409) (15.872) 343.Doubtful loans and advances 343.381 277.631 8.662 283.490 Loans and Advances 8.note 27 (Write-off) / Provision utilised against write-offs Provision no longer required 277.456.120 285.701 36.046 4.409) (15.5 The maximum exposure to credit risk for past due and impaired at the reporting date by type of counterparty was: Wholesale customers Retail customers End-user customers Less: Provision for: .298 9. 39.880 12.976 621.532 277.751 39.884 109.110 6. and • Provide an impairment loss for 100% when overdue more than 120 days.Amounts in Rs ’000 2010 39.068. comprising trade debts.620 354.000 208.140 (57.500 10.799 31.112 491.631 8.110 202.251 217.7 Concentration Risk The sector wise analysis of receivables.428 283. The procedure introduces a company-standard for dynamic provisioning: • Provide impairment loss for 50% of the outstanding receivable when overdue more than 90 days.646 (676) 285.385.031.415 24.483 75.510 284.641 240.630 ICI Pakistan Limited Annual Report 2010 111 .679 2.6.620 354. loans and advances and bank balances are given below: Textile Glass Ceramics Paper and Board Chemicals Pharmaceuticals Construction Transport Paints Bank Subsidiary Others Less: Provision for: .647.731 36.

810 5.150.note 8 Technical service fee / Royalty .payable on termination of distributorship .808) (4.4 Contractors' earnest / retention money .992 2.270.975 71.note 8 Payable for capital expenditure .184 106.150.074.742 (1.note 8 Others .810 5.note 8 963.note 8 Unclaimed dividends .150.103 4.995) (35.020.548 136. Carrying amount Contractual cash flows 2010 Financial liabilities Trade creditors . or at significantly different amount.649 30.payable on termination of distributorship . Liquidity Risk Liquidity Risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities.321 299.103 4.992) (2.544 99.321 299.392) (10. Company's treasury aims at maintaining flexibility in funding by keeping committed credit lines available. 2010 Amounts in Rs ’000 40.020.184 106.987.981 11.note 8 Others .649) (30.069.note 8 Payable for capital expenditure .810 124.note 8 Bills payable .note 8 1.933) (305.987.note 8.2 Accrued expenses .461 1.802.808 4.975 77.note 8 Bills payable .811. The table below analyse the Company's financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet to the maturity date.975) (77.316 89.810 124.155.808 4.995 35.2 Accrued expenses .note 8 Accrued interest / return on unsecured loan .653 4.548) (136.4 Contractors' earnest / retention money .184) (106.993 10.565 1.note 8 Accrued interest / return on unsecured loan .647 1.note 8.548 136.note 8 & note 8.109 1.649 30. Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities.note 8 Technical service fee / Royalty .811.742) Less than one year It is not expected that the cash flows included in the maturity analysis could occur significantly earlier.392 10.933 305.995 35.810) (5.593) 112 Annual Report 2010 ICI Pakistan Limited .note 8 Unclaimed dividends .544) (99.020.109) (1.544 99.565 1.593 (963.933 305.155.992 2.321) (299.103) (4.653) (4.700 11.316 80.981) (11.note 8 & note 8.194 963.647 1.270.109 1.987.074.155.810) (124.note 8 Distributors' security deposits .270.Notes to the Financial Statements For the year ended December 31.note 8 Distributors' security deposits .565) (1.316) (89.653 4.647) (1. 2009 Financial liabilities Trade creditors .

An appeal before the CIT (Appeals) . considered by the department as “protective assessment” on the matter of unabsorbed depreciation carried forward. The re-assessment was finalised by the department during the year giving rise to an additional tax demand. A writ petition against the said notice has been filed with the High Court of Sindh which is pending for hearing. Whilst amending the assessment for the Tax Year 2003 and 2004. 2000. The Company manages its capital structure by monitoring return on net assets and makes adjustments to it in the light of changes in economic conditions. 2001 rather than the effective date given in the Scheme of Arrangement as October 1. 1979. For the assessment year 2002-2003 on receipt of notice under section 62 of the Income Tax Ordinance. While this case is pending for adjudication. This was challenged by the Company in the High Court which upheld the Company’s contention that the department did not have the right to reopen this finalised assessment. Accounting Estimates and Judgements Income Taxes The Company takes into account the current income tax law and decisions taken by appellate authorities. Any changes in these assumptions in future years might affect unrecognised gains and losses in those years. the Company may adjust the amount of dividend paid to shareholders or issue new shares. The tax department reopened the income tax assessment for the assessment year 2001-2002 on the ground that demerger of PTA business from ICI Pakistan Ltd. the amounts are shown as contingent liabilities (unless there is remote possibility of transfer of benefits). The very basis of such an action have also been challenged before the High Court of Sindh which are pending for hearing. in view of the Supreme Court's decision relating to assessment year 2001-2002 it is unlikely that the department can take an adverse action. restriction of cost of capitalisation of PTA plant and addition to income in respect of trial production stocks. The department filed an appeal in the Supreme Court against the High Court’s order. in view of the Supreme Court's decision relating to assessment year 2001-2002 it is unlikely that the department can take an adverse action. Instances where the Company's view differs from the view taken by the income tax department at the assessment stage and where the Company considers that its view on items of material nature is in accordance with law.e. The Income Tax Appellate Tribunal earlier set aside the assessment for the assessment year 1998-99 on the issues of date of commissioning of PTA plant & depreciation thereon. 2001. In order to maintain or adjust the capital structure. and to maintain a strong capital base to support the sustained development of its businesses. While this case is pending for adjudication. Notice under section 221 of the Income Tax Ordinance 2001 for rectification of deemed assessment order for the Tax Year 2005 has been issued to disallow unabsorbed depreciation carried forward. tax department has taken certain action in the order. ICI Pakistan Limited Annual Report 2010 113 . Capital Risk Management The Company's objective when managing capital is to safe guard the Company's ability to continue as a going concern so that it can continue to provide returns for shareholders and benefits for other stakeholders. was effective from the completion date i. While this case is pending for adjudication. in view of the Supreme Court's decision relating to assessment year 2001-2002 it is unlikely that the department can take an adverse action. Pension and Gratuity Certain actuarial assumptions have been adopted as disclosed in note 6 to the financial statements for valuation of present value of defined benefit obligations and fair value of plan assets. on the matter has been filed which is pending. The appeal was dismissed by the Supreme Court. August 6.41. 42. hearing of appeal has been completed and the order is awaited. It is the Company’s contention that such an action is unwarranted. That notice had raised certain issues relating to vesting of PTA assets by the company which has been settled in the assessment year 2001-2002. the Company had filed a writ petition in the Supreme Court challenging the tax department’s notice that the effective date of PTA’s demerger was August 6. The Company has filed an appeal against the said order before the CIT(Appeals).

2011. 2011). the Company reviews the value of the assets for possible impairment on an annual basis. Minimum Funding Requirements and their Interaction (effective for annual periods beginning on or after January 01. options or warrants pro rata to all of its existing owners of the same class of its own non-derivative equity instruments. The 2010 amendment provides an exception to the measurement principle in respect of investment property measured using the fair value model in accordance with IAS 40 Investment Property. The revision amends the definition of a related party and modifies certain related party disclosure requirements for governmentrelated entities. 2010 Property. 2012). These amendments will result in increased disclosures in the financial statements. The majority of amendments are effective for annual periods beginning on or after January 1. Any change in the estimates in future years might affect the carrying amounts of the respective items of property. which comprise of 11 amendments to 7 standards. 2011). Amendments to IFRIC 14 IAS 19 – The Limit on a Defined Benefit Assets. plant and equipment. The amendment has no impact on financial statements of the Company. 2011. plant and equipment The estimates for revalued amounts. if any. Further. This amendment is not likely to have any impact on Company's financial statements. Amendments to IFRS 7 . These amendments result in prepayments of contributions in certain circumstances being recognised as an asset rather than an expense. the IASB issued improvements to IFRSs 2010. This interpretation provides guidance on the accounting for debt for equity swaps.Disclosures – Transfers of Financial Assets (effective for annual periods beginning on or after July 1. 2011. These standards are either not relevant to the Company's operations or are not expected to have significant impact on the Company's financial statements: Amendment to IAS 32 Financial Instruments: Presentation – Classification of Rights Issues (effective for annual periods beginning on or after February 01. These amendments remove unintended consequences arising from the treatment of prepayments where there is a minimum funding requirement. Amendments to IAS 12 – deferred tax on investment property (effective for annual periods beginning on or after January 1. Effective dates. 2010). The said recommendations also include estimates with respect to residual values and depreciable lives. 2010). and financial assets that are derecognised in their entirety but for which the entity retains continuing involvement. The amendment in future may result in certain changes in disclosures. are based on valuation performed by external professional valuers and recommendation of technical teams of the Company. Certain of these amendments will result in increased disclosures in the financial statements. The amendments include list of events or transactions that require disclosure in the interim financial statements and fair value of award credits under the customer loyalty programmes to take into account the amount of discounts or incentives that otherwise would be offered to customers that have not earned the award credits. The future cash flows used in the impairment testing of assets is based on management's best estimates which may change in future periods. Improvements to IFRSs 2010 – In May 2010. IAS 24 Related Party Disclosures (revised 2009) – effective for annual periods beginning on or after January 01. of different classes of property. The IASB amended IAS 32 to allow rights. 114 Annual Report 2010 ICI Pakistan Limited . This interpretation has no impact on Company's financial statements. options or warrants to acquire a fixed number of the entity’s own equity instruments for a fixed amount of any currency to be classified as equity instruments provided the entity offers the rights. This interpretation has no impact on the Company's financial statements. amendments and interpretations of approved accounting standards are effective for accounting periods beginning on or after January 1.Notes to the Financial Statements For the year ended December 31. early application and transitional requirements are addressed on a standard by standard basis. 43. IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments (effective for annual periods beginning on or after July 01. plant and equipments with a corresponding affect on the depreciation charge and impairment. The amendments introduce new disclosure requirements about transfers of financial assets including disclosures for financial assets that are not derecognised in their entirety. Standards or Interpretations not yet effective The following standards.

heating and cooling Amounts in Rs '000 1.774 M J Jaffer Chairman / Director Waqar A Malik Chief Executive Feroz Rizvi Chief Financial Officer ICI Pakistan Limited Annual Report 2010 115 . 46.2 General Figures have been rounded off to the nearest thousand rupees except stated otherwise. Reclassification from component Administration and General Expenses -General expenses Selling and Distribution Expenses -General expenses Reclassification to component Administration and General Expenses -Advertising and publicity expenses Selling and Distribution Expenses -Lighting. for better presentation and disclosure. 2011. The financial statements for the year ended December 31. 46.807 1. 2010 do not include the effect of the above dividend which will be accounted for in the period in which it is approved. wherever necessary.00 per share (2009: Rs 4. 2010. 2011 have recommended a final dividend of Rs 12.44. Dividend The directors in their meeting held on February 16.50 per share) in respect of year ended December 31. Corresponding Figures Corresponding figures have been rearranged and reclassified. Date of Authorisation These financial statements were authorised for issue in the Board of Directors meeting held on February 16.1 46. 45.

730) 475.384.854.92 40.786.786.536 (32.43) % % % % % % % % % % 23.29) (41. commission & toll income Cost of sales Gross profit Operating result Profit before taxation Profit after taxation 12.581 66.555 1.86 24.66 4.569.541 13.777 566.05 25.874 Non Current Assets Current Assets Total Assets 8.71 13.573 8.33 (11.987 13.08) 15.33 19.945.04 15.169 2.82 15.42 5.652 447.396.475 13.710.094 1.53 19.218.44 8.327.862 619.88) (31.354 980.18 23.173 7.229 6.465.36 30.073.23 23.76 116 Annual Report 2010 ICI Pakistan Limited .142.077.404 1.396.24 13.813 12.00) (15.53 5.812 Ratios Profitability Ratios Gross margin Gross profit turnover Operating margin Net Profit margin Profit markup Profit before tax margin Return on equity Return on capital employed Return on assets Return on fixed assets Growth Ratios Net sales Operating results EBITDA Profit after tax Operating working capital % % % % % 8.45 18.23 5.174 4.026.819.60 (23.815.104.03 (9.618 15.775.438 78.685.932.891.095 1.64) (52.895 6.42) 227.962) 70.40 15.618.700 13.784 (788.168.224 1.229 9.Comparison of Results for Ten Years As at December 31 2001 2002 Balance Sheet Equity and Revaluation Reserve Non Current Liability Current Liabilities Total Equity and Liabilities 5.431 10.732 Summary of Cash Flows Cash generated from operations Net cash generated from operating activities Net cash used in investing activities Net cash used in financing activities Cash and cash equivalents at December 31 2.549) (965.842 2.937 9.242 4.114 723.398.874 Profit and Loss Account Turnover Net sales.

54 32.63 (324.251 3.825.50 5.468.682 74.681 806.68 15.64 6.85 25.455.663 9.226) (1.615.74 36.672 8.690 6.110.684 13.80 38.82 16.42) (199.878.334.379.51 6.783 6.73 16.380.041.489 11.657 10.420.62 19.03 16.603 9.04 9.298 18.030.731.422.492.54 25.38 9.29 4.686.898 21.77 10.95) 5.125.08 32.648 4.469.367 1.022.208.94 34.60 12.44 7.61 (58.183) (2.479.093 (1.297.00 4.152.892 14.079 5.704.054.093.37 218.57 6.842.798.827 8.470.443.538 4.96 17.928.005 5.190 5.187 2.822 14.221) 1.258 8.028) 1.69) 53.28 9.812.118.057.360 2.82 19.604 5.450 1.024.868 21.571 6.123 18.189.969.023.027.027) 4.698 1.757) (1.188.482.037 22.60 29.797 1.738 39.584 12.436) (868.62 13.388.979 7.168 21.771 2.451) 1.988.687.82 14.656 3.205.612.21 7.18 20.69) 23.54 12.82) 17.921.51 10.95 (7.574.61 (118.065 (103.124.688 19.666.043) (1.310 4.257 21.23 4.778 1.428 (752.764.542 1.77 17.675.799.542.13 15.921 612.231 (938.67) 4.754 2.639.261.030.675 2.02 15.823.873 27.537 (1.470 2.506 35.93 18.035.Amounts in Rs ’000 2003* 2004* 2005** Restated 2006 2007 Restated 2008 Restated 2009 2010 6.798 17.92 9.205.96 21.777 3.809 (1.506 2.980 28.66 7.503 1.401 1.275 16.373 13.654 3.369 4.805 18.827 6.51 22.57 8.572.584 9.577 14.784.346.462.523 1.22 10.56 18.764.171 (4.044.14 15.628 25.947.754.897 22.891.661.47 12.601 5.399.81 25.905.410.97 8.35 0.933.959 (1.552 766.800 31.056 1.709 1.91 48.312.98 6.072.044 82.139.500.63 20.303.02 40.572.16 8.06 (104.414.389.16 (2.685 10.685 14.397.138 15.65 7.818.987.70 23.81) 1.770 18.566 3.00 18.117.429.19 24.664.422.03 17.641.476.52 10.969) (832.131.916.12 14.406 4.928 2.45 18.883.428.118 15.787.755.455.295 15.46 20.37 20.351.716.759 3.58 22.516 2.34 48.10 2.373 10.927 3.43 11.018) 4.70 24.929.77 (82.392 969.42 19.70 15.351 23.815) 1.74 2.938.445 1.70 22.865.780.093.040.230 104.57 22.900 2.415 11.257 22.141.01 18.657 15.583) 3.337.712.826 2.16 6.85 18.087.018 2.915 22.94 10.244 20.290 3.75 26.004 2.117 5.954 4.892 3.081.921 11.855 16.263.30 13.96 7.480 14.62 16.59 25.27 (0.477.64 ICI Pakistan Limited Annual Report 2010 117 .672 17.476.495.78 320.969.18 21.92 19.984.17 19.930 15.642 1.929.044.61 19.081 4.457 15.91 10.052.98 1.138 5.86) 20.387 90.921 9.915.91 23.521.623) 1.427 18.788 1.44 26.729 7.928.971.81 15.568 7.131.19) 23.127.738 32.564 1.470.075 18.436.554.738.45 14.51 34.663 9.181 28.87 9.997 119.23 17.048 3.305.935 5.446.862.768.810 18.830) (1.741.129.018 13.34 10.532.028 1.435.64 10.

44 33:67 2.16 2.74 17.14 5.72 Ratio Ratio Ratio 0.89 2.17 16.25 4.85 19.99 35.67:1 0.99 91.59:1 0.14 5.95 48.58 91.25 5. Also excluding oneoff profit on sale of PPTA shares in 2004. 118 Annual Report 2010 ICI Pakistan Limited .43 44:56 1.27:1 0.01 0.30 40.14 2.28 2.86 9.81 33.95 5.67 48.98 7.77 4.78 4.Comparison of Results for Ten Years As at December 31 2001 2002 Efficiency Ratios Asset turnover Fixed asset turnover Inventory turnover Current asset turnover Capital employed turnover Operating working capital turnover Debtor turnover ratio Creditor turnover ratio Inventory turnover ratio Operating cycle Revenue per employee Net income per employee Capex to sales Cost Ratios Operating costs (% of sales) Administration costs (% of sales) Selling costs (% of sales) Interest cost (% of sales) *** Equity Ratios Price earnings ratio Earnings per share Dividend per share Dividend cover Dividend (Declared for the year) Yield Dividend (Declared for the year) Payout Market value per share Break-up value per share with surplus on revaluation Break-up value per share excluding surplus on revaluation Liquidity Ratios Current ratio Quick / Acid test ratio Cash ratio Leverage Ratios Debt to equity Total debt to capital ratio Interest cover *** % Ratio Times 25.66 58.438 399 8.37 30.24 2.07 79.264 1406 4.64 17.08 % % % % 86.35 16.06:1 0.03 104.13 4.84 53.07:1 Rs Rs Rs Times % % Rs Rs Rs 8.00 2.78 3.79 1.36 2.20 21.03 3. ** Excluding recognition of deferred tax credit in 2005 *** Interest cover and Interest cost (% of Sales) is zero in 2009 and 2010 due to net interest income The comparatives (2002 to 2004) have not been restated due to change in accounting policy on adoption of IFRIC 4.94 4.04 13.03 7.44 Times Times Times Times Times Times Days Days Days Days Rs'000 Rs'000 % 0.18 4.20 6.32:1 0.09 * Excluding turnover of discontinued furnace oil and coal businesses.65 2.41 64.

43 2.00 28.02 4.53 1.33:1 1.70 4.27 3.304 1.73 2.08 2.71 96.39 11.44 78.50 2.02:1 0.39 1:99 5.07 2.52 14.30 4.44:1 0.44:1 1.62) 15.48 1.76 52.44 14.14 8.56:1 0.16 2.58:1 1.61) 14.77 1.04 0:100 8.50 2.00 58.49 103.84 75.14 5.36 3.59 3.71 2.87 6.33 3.84 2.44 90.74) 17.77 4.05 4.01 10.38:1 0.52 4.14 140.03 3.67:1 0.41 13.53 1.45 115.75 54.00 1.44 0:100 28.39:1 0.391 4.97:1 0.62 76.65 62.138 5.31 168.75 4.50 82.56 44.62 89.43 13.50 71.852 1.69 6.38) 12.67 0.11 1.40 11.35 11.28 3.28 4.02 12.94 16.16 2.29 12.46 2.29 0:100 - 0:100 - ICI Pakistan Limited Annual Report 2010 119 .77:1 2.91 1.45 1.24 2.50 17.97 6.50 1.25 39.72 21.572 2.43 3.33:1 0.22 1.28 5.28 21.044 1.95 15.76 7.21 2.71 4.42 0:100 32.81:1 1.434 806 3.09 75.85 (4.43 68.91 4.44 89.91 5.16 13.39 (440.52 2.81 0.568 574 2.32 89.91 4.62) 13.55 2.43 94.00 12.410 5.25 56.45 2.42 2.90 73.06 9.68 11.203 7.82 0.13:1 1.878 1.65 1.81 50.91 (38.26 5.86 6.12 1.19 20.06 51.42 6.79 1.08 (20.96 13.137 1.29:1 1.52 52.29 85.67 10.16 2.27 3.35 104.14 3.95 68.24 17.73 8.00 1.69:1 0.08 6.35 4.70 81.00 2.09 (108.46 52.05 46.12 13.34 3.65 89.40 5.20 81.36 0:100 6.62 15.77 17.85:1 40:60 3.04 3.51 2.29:1 0.49 5.13 100.94 45.10:1 0.946 1.77 - 15.83 21.24 59.39 35.17:1 1.56 2.73 3.65 78.08 41.09 11.01 144.00 44.39 3.74 0.33 5.92:1 1.11 92.Amounts in Rs ’000 2003* 2004* 2005** Restated 2006 2007 Restated 2008 Restated 2009 2010 1.35 60.90 40.00 2.48 89.50 1.84 4.41 1.66 196.25 58.24 111.45 87.56 8.17 - 89.08 21.33:1 1.33 5.62 4.07 121.46 48.06 11.858 2.00 3.05 73.27:1 0.73:1 0.06 16.23 2.03 26.50 87.85 97.96 2.

001 65.001 20.Pattern of Shareholding as at December 31.001 45.497 75.001 150.952 1.000 20.001 100.000 105.000 115.000 45.001 50.000 195.001 25.001 85.830 224.000 60.001 75.579 512.001 115.210 290.000 30.001 165.000 89.000 104.103 1.154 462.000 170.953 260.634 116.101 100.167.000 65.001 70.000 179.873 191.001 10.001 55.284 68.000 50.532 122.500 3.000 25.693 265.001 145.510 209.000 175.000 155.314 641. 2010 No.000 90.000 150.000 40.001 95.000 120 Annual Report 2010 ICI Pakistan Limited .600 300.194 157 57 36 20 16 6 7 5 7 5 5 2 1 7 1 2 1 1 1 1 2 1 2 1 2 2 1 1 101 501 1.000 120.700 167.000 85.217 337.000 100.000 10.001 175.766 332.000 150.001 110.584 706.000 15.680 951.282 92.001 80.616 187.001 5.120 452. of Shares 210.000 180.000 95.001 90.118 1.001 500 1.000 5. of Shareholders From 6.890 2.001 30.001 15.275 827.001 60.589.001 170.019 1 Categories To 100 No.001 190.000 55.000 70.001 35.800 350.000 35.000 80.001 40.000 75.

001 345.000 1.000 610.000 350.000 910.001 3.001 330.915 347.300 386.001 440.222 105.000 610.000 875.001 105.001 505.260.000 450.001 410.000 575.400.000 300.100.228 331.000 270.001 220.237 400.001 415.001 270.000 340.001 870.100.225.975.000 3.000 780.001 775.001 200.970.000 510.230.000 660.000 295.000 412.000 655.000 225. of Shareholders From Categories To No.532 418.000 420.125 138.401.000 360.000 335.001 385.300 ICI Pakistan Limited Annual Report 2010 121 .044 1.900 1.374 3.580.001 595.000 415.No.115 775.000 390.000 275.000 443.000 105.802.001 310.979 294.001 905.750 909.001 355.000 1.083 872.405.001 530.711 1.001 605.229.800 574.000 445.000 600.000 315. of Shares 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 12.214 450.001 655.000 1.001 335.000 225.260.575.095.000 400.265.000 535.001 1.649 195.000 505.970.001 570.231 600.000 313.489 533.001 290.749 300.579.001 445.000 358.000 1.001 295.000 200.990 335.000 1.001 1.001 395.001 1.001 1.

179 873.25 18.875. 1 2 3 4 5 6 7 8 9 10 11 Insurance Companies Investment Companies Joint Stock Companies Modaraba Management Companies Modarabas Mutual Fund Others Financial Institutions Cooperative Societies Charitable Trusts Individuals TOTAL 15 4 97 2 5 50 39 20 1 6 4.051 5.81 0.229.042 18.679.802.01 0.095 2.01 0.19 2.10 100.731 5.31 0.456 30.V.00 0.02 0. a subidiary of AkzoNobel N.125 5. B.29 37.25 3.788 2.122 314.46 0.01 0.694 9. (b) Categories of Account Holders and Sub Account Holders as per Central Depository Register.000. of Shareholders 1 12 7 25 25 12 3 6 8.251 5.559 138.77 22.251 12.00 122 Annual Report 2010 ICI Pakistan Limited . 2010 S.81% shareholding of ICI Omicron.23 0.588 59.84 0.Pattern of Shareholding as at December 31.00 0.759.582 5.No.28 19.631.001 89.325 11. Categories of Shareholders 1 2 3 4 5 6 7 8 9 10 Associated Companies (a) Investment Companies Insurance Companies Joint Stock Companies Others Financial Institutions Modaraba Companies Mutual Funds Individuals Central Depository Company (b) TOTAL No.012 4.453 176 764 2.V.200 85.577 30.559 18.300 Percentage 75.16 100.458.351 1.00 0.649 Shares Held 105.307 4.462.00 1.00 (a) Represents the 75.759.

Akbar Jaffer s/o M J Jaffer Executives Public Sector Companies and Corporations Banks. 1 105.V. Modarabas and Mutual Funds Shareholders holding 10% or more voting interest ICI OMICRON B.325 1 1 15. NIT and ICP (name wise detail) National Bank of Pakistan.V.001 1 1 15. Jaffer Mr. Undertakings and Related Parties ICI OMICRON B. M Nawaz Tiwana Mr.081 12.229. CEO and their spouse and minor children (name wise detail) Mahomed J. 2010 ADDITIONAL INFORMATION Shareholder’s Category Number of Shareholders / folios Number of Shares Held Associated Companies.284 17. Jaffer w/o M J Jaffer Mr.989 15. Mueen Afzal Mr. As at December 31.044 1 1 1 2 1 1 1 1 42 4 118 21. Khatoon M.063.045 1 105.262.579.229. NI(U)T Fund Directors.125 ICI Pakistan Limited Annual Report 2010 123 . Ali A Aga Ms.Trustee Deptt.114 3.Pattern of Shareholding (Under clause (i) of sub-regulation (XIX) of Regulation 35 of chapter (XI) of the Listing Regulations of the Karachi Stock Exchange (Guarantee) Ltd. Non-Banking Finance Institutions Insurance Companies.125 1 1. Feroz Rizvi Mr. Waqar A Malik Mr. Development Finance Institutions.

ICI Pakistan Limited and its Subsidiary Company ICI Pakistan Limited Annual Report 2010 125 .

In 2010. 2010 has been presented separately.3 million which was 37 percent higher compared to last year. a wholly owned subsidiary. This along with revision in electricity tariff at the beginning of the year enabled the Company to achieve an operating result of Rs 121. During the year. This was due to higher demand from the Polyester plant of ICI Pakistan Limited. Gas tariff was increased in early Q1 2010. Future Outlook Crude oil prices and furnace oil prices are expected to increase with the worsening of political unrest in Middle East. The Directors report.Report of the Directors for the year ended December 31. The ICI Pakistan Group comprises of ICI Pakistan Limited and ICI Pakistan PowerGen Limited. crude oil prices at Rs 43. 2010 The Directors are pleased to present their report together with the audited Group results of ICI Pakistan Limited for the year ended December 31. it remained fairly stable there onwards. 2011 Karachi Waqar A Malik Chief Executive 126 Annual Report 2010 ICI Pakistan Limited .453/tonne in 2009. however. M J Jaffer Chairman February 16. giving a commentary on the performance of ICI Pakistan Limited for the year ended December 31. crude oil prices remained above the price levels of 2009. Electricity sales volume for the year was 6 percent higher compared to 2009. 2010.650/tonne was on an average higher by 39 percent compared with Rs 31.

and the consolidated results of its operations. In our opinion. February 16. as well as. consolidated statement of comprehensive income. 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. We conducted our audit in accordance with the auditing standards as applicable in Pakistan. An audit includes examining. 2011 Karachi KPMG Taseer Hadi & Co. Chartered Accountants Amir Jamil Abbasi ICI Pakistan Limited Annual Report 2010 127 . consolidated cash flow statement and consolidated statement of changes in equity together with the notes forming part thereof. evaluating the overall presentation of the above said statements. evidence supporting the amounts and disclosures in the above said statements. An audit also includes assessing the accounting policies and significant estimates made by management. consolidated cash flows and consolidated changes in equity for the year then ended in accordance with approved accounting standards as applicable in Pakistan. We believe that our audit provides a reasonable basis for our opinion. on a test basis. Our responsibility is to express an opinion on these financial statements based on our audit. These financial statements are the responsibility of the Holding Company’s management.Auditors’ Report to the Members We have audited the annexed consolidated financial statements of ICI Pakistan Limited and its subsidiary (the “Group”) comprising consolidated balance sheet as at 31 December 2010 and the related consolidated profit and loss account. for the year then ended. the consolidated financial statements present fairly the consolidated financial position of the Group as at 31 December 2010.

269 917.163.445 944.023 465.000 ordinary shares of Rs 10 each Issued.621 5.845 11.000.025.023 465.621 Contingencies and Commitments Total Equity and Liabilities 11 21.388.388.Consolidated Balance Sheet As at December 31.000.net 7 8 6 4 5 2010 2009 15.098 1.699 21.000.566.710.490 5.000 1.356 Current Liabilities Short-term financing Trade and other payables 9 10 5.845 12.000 1. 2010 Amounts in Rs ’000 Note EQUITY AND LIABILITIES Share Capital and Reserves Authorised capital 1.093.577 13.124 223.453 36.038 5.500.248 1.873.566.429 183.401 14.079.380 15.279.528 128 Annual Report 2010 ICI Pakistan Limited .133.017.181 870.909. Plant and Equipment LIABILITIES Non-Current Liabilities Provisions for non-management staff gratuity and eligible retired employees' medical scheme Deferred tax liability .208. subscribed and paid-up capital Capital reserves Unappropriated profit Total Equity Surplus on Revaluation of Property.258 1.

078 163.739.500 148.253.581 3.265 40.870 2.557 11.951 4.978 3. plant and equipment Intangible assets 12 13 2010 2009 9.025.575 Total Assets 21.870 9.053.655 455.878 Long-term investment Long-term loans Long-term deposits and prepayments 14 15 16 2.Amounts in Rs ’000 Note ASSETS Non-Current Assets Property.300 180.829.232 647.103 9.713 11.430 29.073 554.881.500 131.710.680 818.458 191.669 545.240 4.453 The annexed notes 1 to 47 form an integral part of these consolidated financial statements.223 9.510.403 9.433 713.351 286.816.690.008 10.547.444 460.699 21.626 Current Assets Stores and spares Stock-in-trade Trade debts Loans and advances Trade deposits and short-term prepayments Other receivables Taxation recoverable Cash and bank balances 23 17 18 19 20 21 22 518.862. M J Jaffer Chairman / Director Waqar A Malik Chief Executive Feroz Rizvi Chief Financial Officer ICI Pakistan Limited Annual Report 2010 129 .345 944.079.940 454.879 124.862.

182.489 (28.526) 28.436) (434.80 Other operating income Profit before taxation Taxation Profit after taxation 31 416.399.416) (307.470.243) (472.846 (165.837 3.439 (185.793 32 (1.606 3.178.85 The annexed notes 1 to 47 form an integral part of these consolidated financial statements.370) 3.Consolidated Profit and Loss Account For the year ended December 31.659) 2009 32.994.983 (1.672) 5.017) 34.768) 2.779.766.835.340 (1.027. M J Jaffer Chairman / Director 130 Annual Report 2010 ICI Pakistan Limited Waqar A Malik Chief Executive Feroz Rizvi Chief Financial Officer .477.775) 3.062.506 (4.742) (248.149) 6.569. commission and discounts Net sales.082.181 (4.655 (22.302.674. excise duty.330 (Rupees) 14.118.336.174) (1.538. commission and toll income Cost of sales Gross profit Selling and distribution expenses Administration and general expenses Operating result Financial charges Other operating charges 29 30 27 28 25 25 24 2010 39.690) 2.301.054.103 (Rupees) Earnings per share . 2010 Amounts in Rs ’000 Note Turnover Sales tax.098 (1.812.719) (1.Basic and diluted 33 17.532.178) 397.

Consolidated Statement of Comprehensive Income
For the year ended December 31, 2010

Amounts in Rs ’000

2010 Profit for the year Other comprehensive income Total Comprehensive income for the year 2,477,103 2,477,103

2009 2,054,330 2,054,330

The annexed notes 1 to 47 form an integral part of these consolidated financial statements.

M J Jaffer
Chairman / Director

Waqar A Malik
Chief Executive

Feroz Rizvi
Chief Financial Officer
ICI Pakistan Limited Annual Report 2010 131

Consolidated Cash Flow Statement
For the year ended December 31, 2010

Amounts in Rs ’000

2010 Cash Flows from Operating Activities Profit before taxation Adjustments for: Depreciation and amortisation Gain on disposal of property, plant and equipment Provision for non-management staff gratuity and eligible retired employees' medical scheme Mark-up on bank deposits Interest / mark-up expense 1,027,499 (10,211) 58,991 (282,906) 103,424 4,676,590 Movement in: Working capital Long-term loans Long-term deposits and prepayments Cash generated from operations Payments for : Non-management staff gratuity and eligible retired employees' medical scheme Taxation Interest / mark-up Profit / mark-up received on bank deposits Net cash generated from operating activities Cash Flows from Investing Activities Payments for capital expenditure Proceeds from disposal of property, plant and equipment Net cash used in investing activities (915,834) 33,032 (882,802) (19,068) (1,543,251) (104,350) 282,448 2,498,711 (765,443) (16,835) (11,380) 3,882,932 3,779,793

2009

3,082,098

957,309 (5,293) 56,008 (167,995) 106,496 4,028,623

1,086,307 (116) 1,606 5,116,420

(15,239) (514,838) (119,395) 163,937 4,630,885

(839,156) 17,148 (822,008)

132

Annual Report 2010 ICI Pakistan Limited

Amounts in Rs ’000

2010 Cash Flows from Financing Activities Dividend paid Net cash used in financing activities Net increase in cash and cash equivalents Cash and cash equivalents at January 1 Cash and cash equivalents at December 31 - note 23 (1,388,027) (1,388,027) 227,882 4,511,675 4,739,557

2009

(1,041,018) (1,041,018) 2,767,859 1,743,816 4,511,675

Movement in Working Capital (Increase) / Decrease in current assets Stores and spares Stock-in-trade Trade debts Loans and advances Trade deposits and short-term prepayments Other receivables 35,603 (563,335) 126,528 (161,715) (799) 66,233 (497,485) (Decrease) / Increase in current liabilities Trade and other payables (267,958) (765,443) Cash and cash equivalents at December 31 comprise of: Cash and bank balances - note 23 Running finances utilised under mark-up arrangements - note 9 4,739,557 4,739,557 The annexed notes 1 to 47 form an integral part of these consolidated financial statements. 4,547,713 (36,038) 4,511,675 1,454,289 1,086,307 26,892 (287,646) (112,817) (26,570) (48,414) 80,573 (367,982)

M J Jaffer
Chairman / Director

Waqar A Malik
Chief Executive

Feroz Rizvi
Chief Financial Officer
ICI Pakistan Limited Annual Report 2010 133

plant and equipment incremental depreciation for the period .744 2.note 6 - - (624.041.269 Balance as on December 31.808) (1. 2009 1. 2010 Transfer from surplus on revaluation of property.087.054.065 (555.017) 2.529 11.529 13.401 26.503.933 (555.209) (485. 2010 Amounts in Rs ’000 Issued.845 33.610) (763.023) 2.054.041.023) 2.133.50 per share Transactions with owners.477.503.388. plant and equipment incremental depreciation for the period . recorded directly in equity Total comprehensive income for the year ended December 31.847 14.023 - Capital reserves Unappropriated profit Total 465.50 per share Interim dividend for the year 2010 @ Rs 5.413) (1.330 11.445 Balance as on December 31.413) (1.087. 2009 Final dividend for the year ended December 31.388. M J Jaffer Chairman / Director 134 Annual Report 2010 ICI Pakistan Limited Waqar A Malik Chief Executive Feroz Rizvi Chief Financial Officer .023 The annexed notes 1 to 47 form an integral part of these consolidated financial statements.279.017.847 12.note 6 1.209) (485.163. 2009 @ Rs 4. 2009 Transfer from surplus on revaluation of property.103 - 465.023 Final dividend for the year ended December 31.net of deferred tax .845 - 10.577 33.477.net of deferred tax .017) 2.199 2.Consolidated Statement of Changes in Equity For the year ended December 31. 2010 1.388.117. 2008 @ Rs 4.199 2. recorded directly in equity Total comprehensive income for the year ended December 31. subscribed and paid-up capital Balance as on January 1.330 - 465.388.103 (624.00 per share Interim dividend for the year 2009 @ Rs 3.610) (763.388.808) (1.744 2.970.50 per share Transactions with owners.845 26.

Karachi. Judgments and estimates made by the management that may have a significant risk of material adjustments to the financial statements in subsequent years are discussed in note 43. marketing of seeds. selling and supplying electricity to the Company. 1984. Lahore and Islamabad Stock Exchanges. POY chips. including reasonable expectations of future events. gratuity schemes and a medical scheme for eligible retired employees. Pension and gratuity schemes for management staff are invested through two approved trust funds. The preparation of financial statements in conformity with approved accounting standards requires management to make estimates. pensions. The Group also operates gratuity scheme for non-management staff and the ICI Pakistan Limited Annual Report 2010 135 . polyurethanes. soda ash. 2. assumptions and use judgments that affect the application of policies and reported amounts of assets and liabilities and income and expenses.2 Basis of measurement These consolidated financial statements have been prepared under the historical cost convention. or directives issued under the Companies Ordinance. Defined benefit plans The Group operates a funded pension scheme and a funded gratuity scheme for management staff. The Subsidiary is engaged in generating. Status and Nature of Business The Group consists of: n n ICI Pakistan Limited. 3. 1984 shall prevail. ICI Pakistan Limited (“the Company”) is incorporated in Pakistan and is listed on the Karachi. except that certain property. and ICI Pakistan PowerGen Limited. 2. Approved accounting standards comprise of such International Financial Reporting Standards (IFRS) issued by the International Accounting Standard Board as are notified under the Companies Ordinance. The Company is engaged in the manufacture of polyester staple fibre. paints. assumptions and judgments are continually evaluated and are based on historical experience and other factors. ICI Pakistan PowerGen Limited (“the Subsidiary”) is incorporated in Pakistan as an unlisted public company and is a wholly owned subsidiary company of ICI Pakistan Limited. 1984. provisions of and directives issued under the Companies Ordinance. 2010 1. Summary of Significant Accounting Policies The accounting policies adopted are the same as those which were applied for the previous financial year. toll manufactured and imported pharmaceuticals and animal health products. Revisions to accounting estimates are recognised prospectively commencing from the period of revision.1 Basis of preparation Statement of compliance These consolidated financial statements have been prepared in accordance with approved accounting standards as applicable in Pakistan.2 Staff retirement benefits The Group's retirement benefit plans comprise of provident funds. specialty chemicals. Estimates.1 Consolidation The financial statements of the Subsidiary have been consolidated on a line-by-line basis and all intra-group balances and transactions have been eliminated. It also acts as an indenting agent and toll manufacturer. The pension and gratuity schemes are salary schemes providing pension and lump sums. 3. sodium bicarbonate. and merchanting of general chemicals. In case requirements differ. respectively.Notes to the Consolidated Financial Statements For the year ended December 31. the provisions of. plant and equipment have been included at revalued amounts and certain exchange elements referred to in note 3. The Group's registered office is situated at 5 West Wharf.7 have been recognised in the cost of the relevant property. 2. 3. plant & equipment.

and it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of obligation. plant and equipment which is adjusted against the related deficit / surplus. the past-service costs are amortised on a straight-line basis over the vesting period.3 Provisions A provision is recognised in the balance sheet when the Group has a legal or constructive obligation as a result of a past event. plant and equipment (except freehold land. 2004 or have joined the Group after April 30. the Group recognises deferred tax asset / liability on deficit / surplus on revaluation of property. plant and equipment comprises historical cost. Defined contribution plans The Group operates two registered contributory provident funds for its entire staff and a registered defined contribution superannuation fund for its management staff. In this case. except to the extent that it relates to items recognised directly in other comprehensive income or below equity. In addition to this the Group also provides group insurance to all its employees. Actuarial gains and losses are amortised over the expected average remaining working lives of employees as allowed under the relevant provision of IAS 19 “Employee Benefits”. The Group recognises expense in accordance with IAS 19 “Employee Benefits”. 3. The valuation uses the Projected Unit Credit method. Deferred Deferred tax is recognised using balance sheet method. unless the changes to the plan are conditional on the employees remaining in service for a specified period of time (the vesting period). Freehold land. in which case it is recognised in other comprehensive income or below equity respectively. leasehold land and plant & machinery) are stated at cost less accumulated depreciation and impairment losses. 3. Further. providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Income tax expense is recognised in the profit and loss account. plant and equipment upto the commencement of commercial production and the cost of borrowings during construction period in respect of loans taken for specific projects. cost of exchange risk cover in respect of foreign currency loans obtained for the acquisition of property. The charge for current tax includes adjustments to charge for prior years. Past-service costs are recognised immediately in profit and loss account. if any. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities. Capital work-in-progress is stated at cost. using the enacted or substantively enacted rates of taxation.5 Dividend Dividend distribution to the Group's shareholders is recognised as a liability in the period in which the dividends are approved. The Group recognises a deferred tax asset to the extent that it is probable that taxable profits for the foreseeable future will be available against which the asset can be utilised. who have either opted for this fund by July 31. 3. leasehold land and plant & machinery are stated at revalued amounts less accumulated depreciation. exchange differences recognised in accordance with the previous Fourth Schedule to the Ordinance.4 Trade and other payables Trade and other payables are recognised initially at fair value plus directly attributable cost. An actuarial valuation of all defined benefit schemes is conducted every year. Cost of certain property. The pensioner's medical plan reimburses actual medical expenses to pensioners as per entitlement. if material. The pension and gratuity plans are final salary plans. Depreciation charge is based on the straight-line method whereby the cost or revalued amount of an asset is written off to profit and loss account over its estimated useful life after taking into account residual value. 3. The amount recognised as a provision reflects the best estimate of the expenditure required to settle the present obligation at the end of the reporting period. 2004. The cost of leasehold land is 136 Annual Report 2010 ICI Pakistan Limited . Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised.Notes to the Consolidated Financial Statements For the year ended December 31. 3.7 Property. if any. 2010 pensioners' medical scheme which are unfunded. plant and equipment and depreciation Property. Current Provision for current taxation is based on taxable income at the enacted or substantively enacted rates of taxation after taking into account available tax credits and rebates.6 Taxation Income tax expense comprises current and deferred tax. if any.

amortised in equal installments over the lease period. are reviewed at each reporting date to determine whether there is any indication of impairment. if any. Losses are recognised in profit and loss and reflected in an allowance account against receivables. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable ICI Pakistan Limited Annual Report 2010 137 . Maintenance and normal repairs are charged to income as and when incurred. at each balance sheet date. Objective evidence that financial assets are impaired may include default or delinquency by a debtor. Interest on the impaired asset continues to be recognised through the unwinding of the discount. then the asset's recoverable amount is estimated. Receivables that are not individually significant are collectively assessed for impairment by grouping together receivables with similar risk characteristics. and adjusted if appropriate.8 Intangible asset and amortisation Intangible assets with a finite useful life. Depreciation on additions is charged from the month in which the asset is available for use and on disposals up to the month of disposal. such as certain softwares. then the recoverable amount is determined for the CGU to which the corporate asset belongs. All other expenditures are recognised in profit and loss as incurred. A financial asset is impaired if objective evidence indicates that a loss event has occurred after the initial recognition of the asset and that the loss event had a negative effect on the estimated future cash flows of that asset that can be estimated reliably. 3. if any. An impairment loss is recognised if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount. Surplus on revaluation of property. the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessment of the time value of money and the risks specific to the asset. are capitalised initially at cost and subsequently stated at cost less accumulated amortisation and impairment losses. are derecognised. Amortisation methods. Impairment losses are recognised in profit and loss account. Gains and losses on disposal of assets are taken to the profit and loss account. When a subsequent event causes the amount of impairment loss to decrease. If any such indication exists. plant and equipment (net of deferred taxation) is transferred directly to unappropriated profit. If there is an indication that a corporate asset may be impaired. Impairment loss recognised in prior periods is assessed at each reporting date for any indications that the loss has decreased or no longer exists. depreciation method and the useful lives of each part of property. assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the “cashgenerating unit. The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. The residual value. Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. Amortisation is based on the cost of an asset less its residual value. plant and equipment that is significant in relation to the total cost of the asset are reviewed. the decrease in impairment loss is reversed through profit and loss account. In assessing value in use. Amortisation is recognised in profit and loss on a straightline basis over the estimated useful lives of intangible assets. Assets replaced. All individually significant receivables found not to be specifically impaired are then collectively assessed for any impairment that has been incurred but not yet identified. or CGU”). and the related surplus on revaluation of property. An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the asset's original effective interest rate. For the purpose of impairment testing. plant and equipment is credited to the surplus on revaluation account. indications that a debtor or issuer will enter bankruptcy.9 Impairment Financial assets (including receivables) Financial assets are assessed at each reporting date to determine whether there is objective evidence that they are impaired. Improvements are capitalised when it is probable that respective future economic benefits will flow to the Group and the cost of the item can be measured reliably. To the extent of the incremental depreciation charged on the revalued assets the related surplus on revaluation of property. The Group's corporate assets do not generate separate cash inflows. All individually significant receivables are assessed for specific impairment. useful lives and residual values are reviewed at each reporting date and adjusted. plant and equipment is transferred directly to retained earnings (unappropriated profits). 3. if appropriate. Non-Financial assets The carrying amounts of non-financial assets other than inventories and deferred tax asset. licenses and property rights.

Mark-up / Interest income is recognised as it accrues in profit and loss account. 3.5.12 Stock-in-trade Stock-in-trade is valued at lower of weighted average cost and estimated net realisable value. • • • • 3. accumulated experience is used to estimate and provide for such returns at the time of sale.16 Revenue recognition • Revenue from the sale of goods is recognised when the significant risks and rewards of ownership have been transferred to the customer. Toll manufacturing income is recognised when services are rendered. if any. 3. Monetary assets and liabilities in foreign currencies are translated into Pak Rupees at the foreign exchange rates at the balance sheet date. 3. 2010 amount.17 Financial expense and finance income Financial expenses are recognised using the effective interest rate method and comprise foreign currency losses and mark-up / interest expense on borrowings. using the effective interest rate method. An operating segment's operating results are reviewed regularly by the CEO to make decisions about resources to be allocated to the segment and assess its performance. and subsequently measured at amortised cost. For those products which are often sold with a right of return. The consolidated financial statements are presented in Pak Rupees.18 Segment reporting Segment reporting is based on the operating (business) segments of the Group. if any. Dividend income is recognised when the right to receive dividend is established.13 Trade debts and other receivables Trade debts and other receivables are recognised initially at fair value plus directly attributable cost. 3.11 Stores and spares Stores and spares are stated at the lower of cost and net realisable value. 3. 3. A provision for impairment of trade and other receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of receivables (Refer note 40.Notes to the Consolidated Financial Statements For the year ended December 31. costs of conversion and other costs incurred in bringing the inventories to their present location and condition.10 Investment Investment in unquoted equity security is classified as available for sale is stated at cost less provision for impairment. net of depreciation or amortisation. 138 Annual Report 2010 ICI Pakistan Limited . Cost is determined using the weighted average method. Net realisable value signifies the estimated selling price in the ordinary course of business less net estimated costs of completion and selling expenses. Finance income comprises interest income on funds invested. which is the Group's functional currency. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined.1). An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses. All exchange differences are taken to the profit and loss account. Commission income is recognised on date of shipment from suppliers. 3. Cost comprises all costs of purchase.14 Foreign currency translation Transactions denominated in foreign currencies are translated to Pak Rupees. Profit on short-term deposits is accounted for on a time-apportioned basis using the effective interest rate method. including revenues and expenses that relate to transactions with any of the Group's other components. at the foreign exchange rate prevailing at the date of transaction. which is the Group's functional and presentation currency.15 Functional and presentation currency Items included in the consolidated financial statements are measured using the currency of the primary economic environment in which the Group operates. if no impairment loss had been recognised. and for which discrete financial information is available. 3.

if any.24 Derivative financial instruments The Group uses derivative financial instruments to hedge its exposure to foreign exchange and interest rate risks arising from operational.21 Cash and cash equivalents Cash and cash equivalents comprise of cash in hand and current and deposit accounts held with banks. are capitalised as part of the cost of that asset. Assets acquired under finance leases are depreciated in accordance with the Group's depreciation policy on property. Assets subject to finance lease are stated at amounts equal to the fair value or. if any. 3.23 Financial liabilities All financial liabilities are initially recognised at fair value plus directly attributable cost. and subsequently measured at amortised cost. The minimum lease payments are apportioned between the finance charge and the reduction of the outstanding liability.Segment results that are reported to the CEO include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Segment capital expenditure is the total cost incurred during the period to acquire property. Soda Ash. The business segments are engaged in providing products or services which are subject to risks and rewards which differ from the risks and rewards of other segments. plant and equipment. 3. 3. Paints. Basic EPS is calculated by dividing the profit after tax attributable to ordinary shareholders of the Group by the weighted average number of ordinary shares outstanding during the period. The finance cost is charged to profit and loss account and is included under financial charges. the present value of the minimum lease payments.25 Off-setting Financial assets and liabilities are offset and the net amount is reported in the financial statements only when there is a legally enforceable right to set-off the recognised amount and the Group intends either to settle on a net basis. if lower. Running finance facilities availed by the Group. construction or production of a qualifying asset. Payments made under operating leases (net of any incentives received from the lessor) are charged to the profit and loss account on a straight-line basis over the period of the lease. plant and equipment. 3. Segments reported are Polyester. 3. 3. income tax assets. Life Sciences. Such borrowing costs. net of transaction costs incurred. However. ICI Pakistan Limited Annual Report 2010 139 .19 Finance lease Leases that transfer substantially all the risks and rewards incidental to ownership of an asset are classified as finance lease. financing and investment activities. Payments made under Ijarah contracts are recognised in the profit and loss account on a straight-line basis over the term of the lease. 3. which also reflects the management structure of the Group.26 Earnings per Share The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Unallocated items comprise mainly corporate assets. 3. derivatives that do not qualify for hedge accounting are accounted for as trading instruments. or to realise the assets and to settle the liabilities simultaneously. the Group does not hold or issue derivative financial instruments for trading purposes.22 Borrowings and their cost Borrowings are recognised initially at fair value. liabilities and related income and expenditure. In accordance with its treasury policy. 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. which are payable on demand and form an integral part of the Group's cash management are included as part of cash and cash equivalents for the purpose of statement of cash flows. Chemicals and others (PowerGen).20 Operating lease / Ijarah contracts Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases.

Capital receipts represent the amount received from various ICI PLC group companies overseas for the purchase of property.V. acquired ICI PLC.184 1. the parent company of ICI Omicron B. Plant and Equipment Balance as on January 1 Less: Transfer to unappropriated profit in respect of incremental depreciation charged during the year net of deferred tax Balance as on December 31 944.402 318.357 million representing the difference between nominal value of Rs 10 per share of 12.388.391 ordinary shares issued by the Company and the market value of Rs 590.185 252 3.259 586 465.184 1. (26.185 252 12.259 586 465. 2010 Amounts in Rs ’000 2010 (Numbers) 4. an ex-associate. 2009 2010 2009 Issued.e.845 465.1) 125.2 12.note 5.618.300 126.229. 2001 to November 2.V. plant and equipment. and became the ultimate holding company of ICI Pakistan Limited.380 (33. ICI Pakistan Limited continues to be the direct subsidiary of ICI Omicron B.2 465.199) 944. Subscribed and Paid-up Capital Ordinary shares of Rs 10 each fully paid in cash Ordinary shares of Rs 10 each issued as fully paid for consideration other than cash under scheme of arrangement for amalgamation Ordinary shares of Rs 10 each issued as fully paid bonus shares Ordinary shares issued pursuant to the Scheme as fully paid for consideration of investment in associate (note 4.802.391 138.492 25.388.V.492 25.2 6.190 1.840. 2010.323 5. Surplus on Revaluation of Property. AkzoNobel N. The remitting companies have no claim to their repayments..124 140 Annual Report 2010 ICI Pakistan Limited . held 105. at the date of acquisition i.902 million received on shares issued for the Company's Polyester Plant installation in 1980 and share premium of Rs 464.402 1.229. 2000 approved by the shareholders and sanctioned by the High Court of Sindh. 2001 and the number of shares that have been issued were determined in accordance with the Scheme in the ratio between market value of the shares of two companies based on the mean of the middle market quotation of the Karachi Stock Exchange over the ten trading days between October 22. ICI Omicron B. November 2.227 3.190 125.541 million of these shares corresponding to 25% holding acquired in Lotte Pakistan PTA Limited.840.802.. which is a wholly owned subsidiary of AkzoNobel N. effective January 2.note 5.125 (2009: 105.023 126. 2008.300 4.258.258..124 977. 2000 the Pure Terephthalic Acid (PTA) Business of the Company was demerged under a Scheme of Arrangement (“the Scheme”) dated December 12.227 318.391 138.. 5.744) 917.023 With effect from October 1.1 Capital receipts .V.1 Share premium includes the premium amounting to Rs 0.Notes to the Consolidated Financial Statements For the year ended December 31.1 4.V. 2001.618. UK.618.125) ordinary shares of Rs 10 each at December 31.845 5. Capital Reserves Share premium .

285.1 Funded Gratuity Unfunded Total Pension Funded Gratuity 2009 2009 183.326) 46.380.749 216.354) 93.842) (381.535 41.1 Contributions / payments during the year Closing balance 319.560 (390.526 153.062 130.770 1.037.1.926 (31.084) (340.867 353.354) 155.779 31.779) 198.5 1. The return on plan assets was assumed to equal the discount rate. Actual (loss) / return on plan assets during 2010 was Rs 267.579) 318.300 56.844 (133.145 (173.037.469 - 7.472 319.751) 275.084 7.449 275.301 (39.885 56.950 553.175 175.304 1.173 317.442 million).827 442.784 7.771.724 13% (27%) 2007 1.826 (183.204 340.716 (194.286) 13.483.938 242.026 1.084 9.301 (30.749 216.1.920) 12.354.150 1.387 1.329) 179.835 362.633 33.note 7.547.867 300.068) 10.304 (142.181 7.220 362.113 462.741 40.798 78.105 9.285.483 1.688 747.043 263.204) (162.525 24.054) 170.867 (60.286) 134.526 153.239 (183.547.363 1.084) 156.1.385 1.105) 245.748.181) 1.582 70.798 259.751 26.926 342.5 Movement in the fair value of plan assets: Opening balance Expected return Contributions Benefits paid Actuarial gain Fair value of plan assets at the end of the year 1.235 236.019 (390.971) (1.661 (223.059) (329.1 Unfunded Total The amounts recognised in the profit and loss account against defined benefit schemes are as follows: Current service cost Interest cost Expected return on plan assets Termination cost Recognition of actuarial loss Net charge for the year 47.145 (95.1 Staff Retirement Benefits 2010 Pension 7.768) 36.819.584 33.864 (265.319 (1.827 47.3 The amounts recognised in the balance sheet are as follows: Fair value of plan assets .Amounts in Rs ’000 2010 7.117.037.354.748.1.668) Unrecognised actuarial loss 510.150 39.374 1% (9%) 7.319 310.1.090 1.1.008) 15.720 2.354.239) 46.547 (103.560 (130.569 7% 5% 2009 2.288 1.885 56.170) 117. The table has been rated down three years for mortality of female pensioners and widows.404 31.547 33.352 318.477 815.419 (381.101.304 (236.449) 13.363) (2.449 16% 7% 2006 1.489) (56.844 (64.659 381.971 1.437 62.786 1.1.319 133.535 41.043 298.043 115.146 19.258 223.150 1.560.173 (15.354.634 (98.4 Movement in the present value of defined benefit obligation: Opening balance Service cost Interest cost Benefits paid Termination cost Actuarial loss Present value of the defined benefit obligation at the end of the year 1.771.062 693.413 3% 13% 2008 1.748.126.727) 181.508) 567.971 31.972 1.173 7.4 (1.6 Historical information As at December 31 Present Value of defined benefit obligation Fair value of plan assets Deficit Experience adjustments on plan liabilities Experience adjustments on plan assets 2010 2.894 692.7 Major categories / composition of plan assets are as follows: Debt instruments Equity at market value Cash 2010 62% 30% 8% 2009 50% 32% 18% Mortality of active employees and pensioners will be represented by the LIC(96-98) Table.437 (175.841) Deficit (167.note 7.043 101.827) (248.note 7.895 213.472 (286.437 317.771.010 156.744) 18.610) 122.828) 42.258) (58.067.469 (462.181) 238.285.142 million (2009: Rs 300.1.831 340.126.088.841 462.258) 7.469 734.684 391.903 42.419 (183.223 62.842 1.380.579 265.477 711.019 353.824 58.220 (95.060 60.054) 13.148 (70.352) 13.920 46.236.304 1.498 1.798) (145.2 Movements in the net asset / (liability) recognised in the balance sheet are as follows: Opening balance Net Charge for the year .304 (340.312.997 194.741 40.002 50.842) 158.294 19.008 7.068 (223.064 317.252 Recognised asset / (liability) 342.170 245.768) 35.945 319. ICI Pakistan Limited Annual Report 2010 141 .426 (19.658 98.926 (64.634 (286.1.109 169.1.744) 32.046 1.294 (30.991) 19.010 156.101.173 Present value of defined benefit obligation .250 198.579 7.882 1.828 50.610) 75.477 (553.903) 13.584 391.835 353.258) 7.991 24.426 8.477 26. Provisions for non-management staff gratuity and eligible retired employees' medical scheme .250) 105.326 78.223 62.469 173.555.note 7.926 (103.895 213.821) (394.

38% 7.note 9.Notes to the Consolidated Financial Statements For the year ended December 31.139 335. 2009: 12.75% 10.00% 8.038 The facilities for running finance available from various banks amounted to Rs 2. 2010.784 470. The valuation uses the Projected Unit Credit method. The facilities are secured by hypothecation charge over the present and future stock-in-trade and book debts of the Group and first pari passu charge over plant and machinery of Soda Ash Business of the Group. as at December 31.8 The principal actuarial assumptions at the reporting date were as follows: Discount rate Expected return on plan assets Future salary increases Future pension increases 14.200 million (2009: Rs 56.420) 336.340.419) (1.1 9.75% 44.9 Medical cost trend is assumed to follow inflation.1. Actuarial gains and losses are amortised over the expected future service life of current members.26% per annum (December 31.807 9.net Deductible temporary differences Tax losses carried forward Provisions for retirement benefits. plant and equipment (1.321 133.066 154.003 255.025 7.870) (470.704) (262.75% 32. 2009: Rs 2. 2010 at relevant KIBOR + 1.564 million) to the provident fund and the defined contribution superannuation fund respectively during the year.1.25% 12.006 million) and Rs 35.741 (214.10 The Group contributed Rs 63. 142 Annual Report 2010 ICI Pakistan Limited .47% per annum with an average mark-up rate as on December 31.549) (554.394) (1.1.991 million) and carried mark-up during the period ranging from relevant KIBOR + 0.098.025. doubtful debts and others Taxable temporary differences Property.098) 336.850 (1.287 These figures are based on the latest actuarial valuation.60% 7.75% 12.75% to 3.37 percent per annum).25% 14. 2010 Amounts in Rs ’000 2010 7.528 million (2009: Rs 29.75% 2009 12. Deferred Tax (Liability) / Asset . The sensitivity to reflect the effect of a 1% movement in the assumed medical cost trend were as follows: 2010 Increase Decrease 8.425) (77.105 214.098) 21.75% Effect on the aggregate of the current service cost and interest cost Effect on the defined benefit obligation 35.321 Reversal Closing Opening 2009 Charge Closing 2010 9.353) (870.361.905 291.806 million (December 31.419) (1. Short-Term Financing Running finances utilised under mark-up arrangements . 7.1 Running Finance - 2009 36.425 413.025. 2010 Opening 8.248) (1.361.64 to 17.

566.551 20.645 77.712 299.600 2.103 199.Deposited with the Government of Pakistan Balance as on December 31 10.00 percent (2009: 41.177.214 162.note 30 Interest on funds utilised in the Group's businesses at 60.592 2.873.540 2.548 139.618 2. This figure is based on the actuarial valuation.note 10.5 percent) per annum as specified in the respective agreements.570 1.302 364.note 10.note 10.573 1.103 248.542 165.610 5.105 3.1 Bills payable Sales tax.Amounts in Rs ’000 2010 10.5 percent (2009: 7.075 1.705 30.781 5.911 26.082.197 36.248 148.647 1.2 10.4 10.103 82.645 72.139 80.353 72.342 35. Workers' profit participation fund Balance as on January 1 Allocation for the year .280 3.note 10.4 Contractors' earnest / retention money Advances from customers Unclaimed dividends Payable for capital expenditure Provision for compensated absences .Amount paid on behalf of the fund .855 177.payable on termination of distributorship .000 151.note 10.988.25 percent) per annum .282 147.187 164.544 101.103 119.490 6.169.752 4.786 305.521 92.400 101 5. 2009.103 Interest on security deposits from certain distributors is payable at 11.827 3. as at December 31.975 165. excise and custom duties Mark-up accrued on short-term financing Accrued interest / return on unsecured loan .2 Accrued expenses Technical service fee / royalty Workers' profit participation fund .109 1.5 Others 10.1 The above balances include amounts due to following associated undertakings: ICI Paints UK (part of AkzoNobel group) ICI Paints (Asia Pacific) PTE Ltd (part of AkzoNobel group) AkzoNobel Paints Malaysia Marine Protective International Coating Malaysia (part of AkzoNobel group) C&P Residual (part of AkzoNobel group) AkzoNobel NV AkzoNobel Functional Chemicals International Paint Netherland (part of AkzoNobel group) ICI Packaging Coatings (part of AkzoNobel group) AkzoNobel Functional Chemicals BV AkzoNobel Functional Chemicals Pte Ltd AkzoNobel Surface Chemistry Pte Ltd ICI Paints Thailand (part of AkzoNobel group) ICI Paints Indonesia (part of AkzoNobel group) CR Netherlands (part of AkzoNobel group) AkzoNobel Car Refinishes BV 10.645 174 15 1.000 107.993 10.260 75. ICI Pakistan Limited Annual Report 2010 143 .708 206.note 29 Less: .995 154 197 11.392 1.532 20.3 Workers' welfare fund Distributors' security deposits .3 This represents amount payable to Mortar Investments International Limited.5 165.653 253.700 11.621 2009 977.316 206. Trade and Other Payables Trade creditors .405 6.727 4.326 310.954 71.466 125.014 25 23.339 43.948 371.270.105 312.

236 165. The Company is of the opinion that the order was not justified and has filed an appeal against the order in the Environmental Tribunal in Lahore.633 45.note 12.7 12.685 million) are as follows: Year 2010 2011 2012 2013 2014 67.213 58. Guarantee issued by the Company of Rs 133 million (2009: Rs 133 million) to a bank on behalf of its subsidiary ICI Pakistan PowerGen Limited for availing funded facility. 2010 Amounts in Rs ’000 2010 11.5 11. amounting to Rs 2. Lahore.342 93.135 165.note 12. plant and equipment .356 9.2 Capital work-in-progress .797 1.870 144 Annual Report 2010 ICI Pakistan Limited .6 9. Commitments for rentals under operating lease / ijarah contracts in respect of vehicles amounting to Rs 165.6 11.908 57.159 11.061 A notice was issued by the Environmental Protection Authority (EPA) against the Paints factory located at Ferozpur Road.3 11. 11.878 7.300 9.889 137. Pursuant to this an order was passed by the EPA for violation of certain provisions of the 'Act'.224.336 31.4 11.1 Contingencies and Commitments Claims against the Group not acknowledged as debts are as follows: Local bodies Sales tax authorities Others 91.934 261.987 416.445. Plant and Equipment The following is a statement of property. Guarantee issued by the Company to a bank in respect of financing obtained by Senior Executives amounted to Rs 35 million (2009: Rs 35 million).862. plant and equipment: Operating property.646 million (2009: Rs 33.270 196. Commitments in respect of capital expenditure amounted to Rs 152.190 million (2009: Rs 2.685 67.144 million (2009: Rs 196.223 32.772 23. 12.908 97.2 2009 32.944 285. Guarantees issued by the Company in respect of financial and operational obligations of Lotte Pakistan PTA Limited pursuant to the Scheme of arrangement.472 196. in accordance with the terms of employment.213 129.144 67.510.144 Payable not later than one year Payable later than one year but not later than five years 67.883 9.1 Property.685 11.280 million) against which Lotte Pakistan PTA Limited and KP Chemicals Corporation have issued counter guarantees to the Company.323 53.396 179. which is pending.Notes to the Consolidated Financial Statements For the year ended December 31.875 million).

33 120.005 2.584.261) 162.702 836. Valuations for plant and machinery was the open market value of the asset based on estimated gross replacement cost.628) 21. 2006 resulting in a net surplus of Rs 667.193.note 27 Administration and general expenses .237 (636.765 164. 2010 Opening net book value (NBV) Addition/transfer (at cost) Disposal/transfer (at NBV) Depreciation charge Closing net book value (NBV) Gross carrying value basis At December 31.246 47.293.066.548) (11.388 9.4.980 (32) (9.5 The depreciation charge for the year has been allocated as follows: Cost of sales .011 23.Amounts in Rs ’000 12.702 7.33 to 10 297 (297) 3. 1959 and September 30.702 27.256 (9.741) 68.749) (13.071 (104. the net book value of specific classes of operating property.100 3.229) (783.288 (549) (11.962) 2.821) (53.392 2. plant and equipment would have amounted to: Net Book Value Freehold land Plant and machinery Rolling stock and vehicles Furniture and equipment 12.676) (997.431.541 (519.515 947.757) 241.721 (33.837 133.626 997.799 (564.214.861 21.235 7.382.719 949.869 million respectively.100 3.863) (10. 2010 Cost/Revaluation Accumulated Depreciation Net book value Depreciation rate % per annum 836.348 ICI Pakistan Limited Annual Report 2010 145 .702 836.224.855) (44.155.138.516) 26.246 455.382.597) 200.837 (72) 2.500) 21. The valuation was conducted by independent valuers.954 (37.929 7.note 28 942.082 162.143) 26.189) 725.443 720.500 12.809 725.598 (94. 2010 plant and machinery included equipments held with Searle Pakistan Limited and Maple Pharmaceutical (Private) Limited (toll manufacturers).987 836.33 to 10 297 (297) 3.527 (568.055) (22.863 6.341.235 7.003 (705.836 9.3 Subsequent to revaluation on October 1.320) (949.135) 725.621 (63.207 million and Rs 1.4 12. As at December 31.33 12.956 44.742 7.987 2 to 4 3.164 12. 2009 Opening net book value (NBV) Addition/transfer (at cost) Disposal/transfer (at NBV) Depreciation charge Closing net book value (NBV) Gross carrying value basis At December 31.726 34.569.945 332.014.291.258) 241.082 128.082 8.445. having cost and net book values as follows: 2010 2009 Cost Net book value 4.089.609) 162.5 to 10 2009 3.224. plant and equipment: Land Freehold Leasehold Lime beds on freehold land Buildings On On freehold leasehold land land Plant and machinery Railway sidings Rolling stock and vehicles Furniture and equipment Total 2010 Net carrying value basis Year ended December 31.646) 7.33 Net carrying value basis Year ended December 31.636 2.871) (817.761 1.632.765 68.901.232) 705.149 (4.880 2. depreciated to reflect the residual service potential of the asset having paid due regard to age.148) 251.443 162.555 20.957 (743.1 Had there been no revaluation.089.5 10 to 25 10 to 33.246 5 to 10 1.388 7.305) 68. the land and plant and machinery were revalued again on December 15.33 to 7.515 243.836 7.283 799.391) 251. which had resulted in a surplus of Rs 14.820 (65.200 2.443 200.623) (14.034) 2.749) 200.799 (565.312) 2.33 to 7.377 48.837 78.note 26 Selling and distribution expenses .445.445.663 994.388 9. Land was valued on the basis of fair market value.082 669.377 6.33 126.836 9.749 902.633 (68.167 10.5 10 to 25 10 to 33.087) 89.836 9.506 (9.750 (75.663 241. condition and obsolescence.987 92.917 18.783 30.560 (2.702 - 567.585 22.825 8.163 78.934 864.248 (506.511.365.783 18.515 30.540) (10.636 864.609 48.527 (1.5 to 10 3. 2000.800) 89.535) 7.422.392 543.944 2 to 4 3.392 31.077) (11.809 5 to 10 1.005 - 26.019 (18.743.775) 705.724 (2.501 26.944 864.2 The following is a statement of operating property.377 7.636 - 567.382. 2009 Cost/Revaluation Accumulated Depreciation Net book value Depreciation rate % per annum 836.967 million.172.

Saad contractor.121 209.924 70 Murtaza Khan Babar and Syed Farhat Abbas Jafri. Lahore Hi-Tech Electronics & Machinery.Notes to the Consolidated Financial Statements For the year ended December 31.902 Tufail Iqbal & M Inam.089 710 5.2 nos Hino Dump Trucks Negotiation Auction 1.429 23.318 77 1.664 122.719 Hi-Tech Electronics & Machinery. Karachi 2009 Plant and machinery Dust extraction unit and other items Auction Tinting Machines Rolling stock and vehicles Toyota Corolla . Lahore Cost Accumulated depreciation Net book value Sale proceeds Particulars of buyers Tinting Machines & Dispenser Negotiation 4.338 3.261 197.993 38.576 4.157 14. plant and equipment disposals having net book value in excess of Rs 50.7 2009 51.111 Rolling stock and vehicles Honda City & Toyota Corolla Honda Motorcycle Furniture and equipment Water cooling coil and Chiller Auction 467 323 144 194 Habibullah Khan.883 Details of operating property.392 3. Awami Paints. Karachi Negotiation 28.487 3. Lahore 146 Annual Report 2010 ICI Pakistan Limited .481 8. Karachi Jaffer and Sons.510 80 192 3 1.917 Alfa Laval Middleeast Ltd.808 734 7.088 1. and Muhammad Akram Ghouri.000 are as follows: 2010 Mode of sale Plant and machinery Gas condenser & Various items Tender 27. 2010 Amounts in Rs ’000 2010 12.180 788 3.938 4.289 2. Karachi Syed Ghulam Mustafa. Color Bank and Awan Brothers Auction Auction 1. Chaudhry Paint House. Asian Paints. Roomi Paints.464 8.638 285.719 3..095 12.356 12.519 747 1.460 416.638 33. Khurram Contractors. Mandi Bahauddin Al Habib.6 The following is a statement of capital work-in-progress: Civil works and buildings Plant and machinery Miscellaneous equipment Advances to suppliers / contractors 40.

781) Total 57.750 3.634 (198.430 ICI Pakistan Limited Annual Report 2010 147 .Amounts in Rs ’000 13.365 (8.352 2009 Net carrying value basis Year ended December 31 Opening net book value (NBV) Additions (at cost) Amortisation charge Closing net book value (NBV) Gross carrying amount At December 31 Cost Accumulated amortisation Net book value Rate of amortisation % per annum 7.781 (168.At cost Unquoted Equity security available for sale . Intangible Assets 2010 Software Net carrying value basis Year ended December 31 Opening net book value (NBV) Additions (at cost) Amortisation charge Closing net book value (NBV) Gross carrying amount At December 31 Cost Accumulated amortisation Net book value Rate of amortisation % per annum Licenses Under development 65.700 (7.103 13. Long-Term Loans .146 (177.145) 65.636 639 3.781) 20 2010 2009 7.note 26 Selling and distribution expenses .1 The amortisation charge for the year has been allocated as follows: Cost of sales .note 27 Administration and general expenses .853 (29.1 148.991 20 to 50 209.136 (21.500 15.760 20 87.352 65.Considered good Due from Executives and Employees .note 28 7.565 19.145) 65.103 378.500 2.Arabian Sea Country Club Limited 2.531) 180.700 14.136 (21.352 65.760 226.386) 48.605) 48.note 15.425 7.439 29.781 (168.750) 180.700) 168.700 (7.265 131.991 87.746 2.700) 168.352 65. Long-Term Investment .

756 84. 2009: Rs 11.654) 121.234 39.430 Due from Employees Less: Receivable within one year .371 64.708 86.265 2009 Total 121.471 518. The maximum aggregate amount of long-term loans due from the Executives at the end of any month during the year was Rs 161. Loan outstanding during the year relates to Mr.952 132.note 28 Write-off Closing 132.270 82.363 34.637 55. Executives and Employees Motor car Due from Directors and Executives .794 131.568 25.449 196.636 60. Stores and Spares Stores (include in-transit Rs 20.Notes to the Consolidated Financial Statements For the year ended December 31.847 19.471 125.000 (32.3 15.556) 153.215 (52.2 Reconciliation of the carrying amount of loans to Directors and Executives: Opening balance at beginning of the year Disbursements Repayments Balance at end of the year 121.458 17.1 17.544 148.581 21.430 15.371 554. Aga (Director). 148 Annual Report 2010 ICI Pakistan Limited .100 196.046 715.867 29. Long-Term Deposits and Prepayments Deposits Prepayments 22. Ali A.1 Movement of provision in stores and spares Opening Charge .note 17.681 686.4 Loans for purchase of motor cars and house building are repayable between two to ten years.1 Due from Directors. These loans are interest free and granted to the employees including executives of the Group in accordance with their terms of employment.424 26.211 7.577 House building 51.371 36.563 562.415 44.156 20.793 131.509 million (2009: Rs 125.117 79.058 million.990) 132.119 96.873 17.362 million).more than three years 69.756 The above loan balance includes an amount of Rs 0.265 70.293 (59.585 40.415 102.note 20 Outstanding for period: .628 million) Spares Consumables Less: Provision for slow moving and obsolete items .note 15.less than three years but over one year . who was provided this loan as per his terms of employment.078 16.756 25. 15.694 108.778 28.2 Less: Receivable within one year .283 148.361 40.833 89.319 million (2009: Rs 1.570 589. 2010 Amounts in Rs ’000 2010 15.721 67.978 37.595 million) in respect of house building relating to key management personnel.note 20 101.144 Total 153.982 78.

521 83.887 million.453 944.743 818.822 527.798) 155.813 Stocks amounting to Rs Nil (2009: Rs 18. Breeze Pharma (Private) Limited.972.525 113.792 4.275 10.1 Advances to: Directors and Executives .525 3.23 million) Less: Provision for slow moving and obsolete stocks . Loans and Advances Considered good Loans due from: Executives .380 812.062 155.940 8.472.62 million) to arrive at its net realisable value.Amounts in Rs ’000 2010 18.463 68.note 15.879 19.631 1.694 28.620 286.813 55.note 40.816.604 343.321 1.4 ICI Pakistan Limited Annual Report 2010 149 .107.617 (5.253.1 .351 382.408 3.869 118.060 8.528 974.119 20.note 18. NovaMed Pharmaceuticals and Polymer International (Private) Limited.note 40.997.000) (28.490 1.701 277.332 277.940 Considered doubtful Less: Provision for doubtful loans and advances . Stock-in-Trade Raw and packing material (include in-transit Rs 436.808 61.669) 118.229 1.291.427 48.1 Employees .019 5.225 3. 148. Maple Pharmaceutical (Private) Limited.194.Unsecured Considered doubtful Less: Provision for: .Raw materials .314 2.813 3.620 297.372.345 18.655 10.619 79.012 6.631 249.note 15.note 20. Epla Laboratories (Private) Limited.727 286.944 54. 20.363 45.253 792.Finished goods 1.2 Work-in-process Finished goods (include in-transit Rs 9.341 million (2009: Rs. Trade Debts Considered good .205 87.482 6.Discounts payable on Sales 293.928 5.553 2.Secured .865 38.524 million) which are held with toll manufacturers namely Searle Pakistan Limited.1 Movement of provision in stock-in-trade Opening Charge .710 200.816. 18.Doubtful debts .1 Employees Contractors and suppliers Others 44.234 72.note 18.4 .note 28 Reversal Write-off Closing 118.490 449.830 million) .663 million) are measured at net realisable value and has been written down by Rs Nil (2009: Rs 1.120 124.2 Raw and packing materials include Rs 283.680 2009 1.510 (18.911 213.267.120 133.655 25. 2009: Rs 9.490 million.076 1. 2009: Rs 219.094 343.158 63.458 124.611.

721 9.446 million) respectively.364 million (2009: Rs 3.71%.665 454.444 22.805 85. Other Receivables Considered good Duties.383 23. 2010 Amounts in Rs ’000 2010 20.30% to 11.016.533 (150) 17.405) 16.713 23.651 16.2 Insurance claims Commission receivable Interest income receivable Rebates receivable Others Considered doubtful Less: Provision for doubtful receivables .739.341 4.243 713.note 22. ICI Paints Vietnam ( Part of AkzoNobel group ) AkzoNobel Functional Chemicals 78.768 444.250 4.827 17. at the end of any month during the year was Rs 80.note 22. 150 Annual Report 2010 ICI Pakistan Limited .383 713.942 14.1 These are placed with various banks with maturity up to January 2011.V.927. The markup return on these deposits ranges between 11.3 Movement of provision for doubtful receivables Provision as at January 1 Charge for the year .727 4.755 million (2009: Rs 81.058 123.383 1.note 28 Reversal Provision as at December 31 17.420 4.982 647.516 191.978 million).232 9.365 230.633 11.225 22.353 169.669 16.note 23.781 455.2 22.433 21.557 3.V.887 39.1 Current accounts In hand .547.350.775 85.451 432.Notes to the Consolidated Financial Statements For the year ended December 31.982 664.225 11.982 17.721 80.403 78.383 730.Cheques .669 254. wholly owned subsidiary of AkzoNobel N.1 The maximum aggregate amount due from ICI Omicron B.967 million and Rs 4.586 89 46 78.1 & note 22.245 million and Rs 7.723 647.000 1. Cash and Bank Balances Short term deposits .567.444 17. Trade Deposits and Short-Term Prepayments Trade deposits Short-term prepayments 22.Cash 2. sales tax and octroi refunds due Due from Associate . The above balances include amounts due from following associated undertakings: ICI Omicron B.V.829 4. 22.965 47.3 315.1 2009 The maximum aggregate amount of advances due from the Directors and Executives at the end of any month during the year were Rs 3.427 194.000 1.004 (1.

885 461.370.429.488 7.526 Net sales.955.174 265.178.248 6.960 6.210 156.052 8.988.037 3.351.241 23.115 4.881 - 6.620.298 1.6 335.250.591.516 2.285 6.790 28.980.105 60.755 15.854 326.672 135.449 837.015 83.075 725.710.944 36.388.186.979 49.219 952.351 36.516.110.156.232.309 754.453 24.254 272.119 - 1.2 Operating result 24.022.573 475.463.345 13.359 97.482 4. ICI Pakistan Limited Annual Report 2010 151 .822 1.580.807.949 262.821 3.785 326.611 448.136.699 21.599 15.345 13.833 158.339 1.059 99.947 4.674.889 35.030 86.933 52.120 135.662 17.299 2.766.088 3.933 44.813.476 27.359 97.699 4.033.688 - 6.010 510.208 4.556.010 121.827 4.571.300 390.497 121.note 28 & 28.839 1.383.660.539 40.438 6.073.242 718.414 109.893.507 16.554.010 956.556 3.118.383 462. 24.770 19.621.242 1.010 1.793 105.293 3.705 2.757 2.692 11.147 290.927 150.4 Segment liabilities Unallocated liabilities 2.689 304.260 6.310 582.986.309 5.033.499 877.873 767.027 546 88.873 133.041 5.872 84.008 24.595.875 2.508 90.238 72.347.3 24.388 1.539 1.1 24.766 1.160 21.688 18.761.998.006.743 1.545 - - 58.969.137 86.882 76.573 2.365.262.881 900.828 11.800 93.Amounts in Rs ’000 24.706 374.543 75.840 5.882 84.972 986.835.8 Inter-segment pricing Transactions among the business segments are recorded at arm's length prices using admissible valuation methods.950 24.823 109.007.688 61.489 26.101 276.131.580 381.774 2.542 8.812.661 1. Operating Segment Results Polyester 2010 2009 Sales Afghanistan Bangladesh India South Africa United Arab Emirates Others Soda Ash 2010 2009 Paints 2010 2009 Life Sciences 2010 2009 Chemicals 2010 2009 Others-PowerGen 2010 2009 Group 2010 2009 - 13.621.508.554 8.957 31.331.579 1.420 2.062.866 169.111 1.929 2.134 1.410 89.800 88.079.868.236.069.379 84.433 145.088.115.310 1.359.003 676.350.5 Non-cash items (Provision for non-management staff gratuity and eligible retired employees' medical scheme) Depreciation & amortisation Capital expenditure 6.492 1.370 3.740.934 14.017 1.027.069.821 33.9 There was no major customer of the Group which formed 10 per cent or more of the Group's revenue. commission & toll income Cost of sales .080 753.042.871 124.033.598 2.181 696.010.114 493.009 107.284 477.7 24.896.033 109.740.151.249 28.016 6.2 Segment assets Unallocated assets 17.853 957.810 2.719 1.350.230 6.621 8.030 3.231 29.173 112.333.225.989 211.581 29.598 1.301.289.242 438.884 10.941.991 56.030 8.050 1.587 353.775 3.036 424.883 290.883 14.180 1.242.442.645 25.124 1.740.934 25.115.004 18.447.271 2.906.991 223.653 6.021 5.092 239.600 469.615 448.369.242.644 176.599 54.258 6.517 282.892 132.074.289 3.338.080.470.680.672 956.761 493.022 448.538.038.522 6.927 374.702.681.242 - 106.623 105.882 76.281 2.344.583 137.050 24.976 83.107 420.474 2.356.708 895.672 956.645 419.384 128.089 322.910 3.note 27 Administration and general expenses .297.270 1.374.795 10.875 33.207 12.794.688 6.236 203.191 2.609 480.810.031 3.012 1.285 Commission / Toll income Turnover Sales tax Excise Duty Commission and discounts to distributors and customers 18.397 309.092 88.087 40.840 3.709 7.160 52.796 1.115.748 352.895.197.897 5.386 1.913 2.869 3.539 3.491 - 676.546 6.605 16.055 25.491 93.522 811.223 765.846 1.821 1.003 93.983 72.360.535 148.376 148.869 6.826 13.364 27.003 676.888 158 18.345 - 1.606.180 - 38.040 436.576 Inter-segment Local 18.128 291.700 140.899 417.850 821.172.800 - - 810 810 3.225.968 2.180 4.340 5.121 5.263.note 26 & 26.608 99.614 982.824.840 - 1.439 1.508 6.368.793 6.317.805 366.872.722 6.403.2 Gross profit Selling and distribution expenses .623 - 88.714 22.571.522.088 7.328 52.517 44.195 7.646 1.953 419.493 27.117.076 216.661.266.790 28.605 16.901 - - 1.242.

note 14 Total Assets 25.532.181 23.906.672 17.248 (276.548 7.241 (417.420) (956.2 Long term Investments .573) (676.647 4.note 23 Due from Associates .500 21.109 4.050 18.note 10. 25.note 22.662 545.186.003) 32.156.660. 2010 Amounts in Rs ’000 2010 25.note 24 Elimination of inter-segment turnover Elimination of inter-segment turnover from subsidiary Total turnover 25.699 29.350.927.079.note 10 Total Liabilities 6.Notes to the Consolidated Financial Statements For the year ended December 31.813.note 26 Elimination of inter-segment purchases Elimination of inter-segment purchases from subsidiary Total cost of sales 25. assets and liabilities Turnover Total turnover for reportable segments .2 Unclaimed dividends .003) 22.757 (276.453 6.351.399.117.556.598 (417.420) (956.3 Assets Total assets for reportable segments Taxation recoverable Bank deposits .522.182.420 2.672) 28.689 299.506 2009 33.1 Reconciliations of reportable segment revenues.544 6.586 2.350.672) 39.000 78.2 Cost of sales Total cost of sales for reportable segments .884 152 Annual Report 2010 ICI Pakistan Limited .240 3.397 305.710. cost of sales.569.951 2.573) (676.293 460.500 21.000 80.4 Liabilities Total liabilities for reportable segments Accrued interest / return on unsecured loan .149 40.

871 493.539 2.931.722 1.388) (54.942.986.650.794.075 1.674.163.547) (246.008 452 5.489 973.008 1.908 (285.909 17.750 14.237 (24.685 3.836 21.1 Staff retirement benefits Salaries.332 15.621 5.119.630 14.199 39.658 1.229 191.851 15.265 366.651 4.899 3 11 694 1.976) 3.800 3.602.109 1.886 3.245 276.969.975) 1.914 1.109 221.522.312 3.070.523 8.573 Soda Ash 2010 2009 Paints 2010 2009 Life Sciences 2010 2009 Chemicals 2010 2009 Others-PowerGen 2010 2009 Group 2010 2009 20.250) 2.583.142 272.980 - 205.743 86.539 31.242 15.234 17.913 8.852 10.952 114.070) 945.140 - (10.037 100.893 4.193.315 2.980 Closing stock .556.208 837.811 186.804 (100.076 400 11.586 (15.420 1.082 540.163 841.190 60.265 357.775.191.269 (85.661 (12.748.556.436) 1.621 1.419. Cost of Sales Polyester 2010 2009 Raw and packing materials consumed Opening stock Purchases Inter-segment Others 612.679 370.470 944.029.163) 4.951) 2.248 26.519 905.235 2.828 2.268 100.785 655 12.226 (1.124 3.155 930.286.184 (725) 1.510) 29.217 2.032.912 15.614 (20.097 207.080 10.932.820) 91.554 5.103.334 840.912) (207.981 21.706 (282.861 96.350 13.803 19.257.114) 844.476 146.236 91.740 million charged by the Company for certain administrative service charges in accordance with the service level agreement which have been eliminated from the total.912 134.906.548.585 92.518 151 86.854 1.676) 2.087 5.670 319.681.952.230.503.note 26.901 3.540 81.2 Service Charges from subsidiary This includes amount Rs 1.577 417.612) 13.383.590 509.115.note 18 Raw material consumed Salaries.734 25.794.927 1.note 28 (725.466.854 4.723 512.753 33. gas and electricity Rent.5 & 13.205 141.826. wages and benefits Stores and spares consumed Conversion fee paid to contract manufacturers Oil.128 9.942 696.478 227.210 26.604.205 67.620.431 496 225.279 57.368) 2. ICI Pakistan Limited Annual Report 2010 153 .692 27.146 90.179 25.871 493. 26.015 227.553) (83.417.1 Excise duty Technical fees Royalty General expenses .085 (30.293 1.849 15.470 840.024 4.301.600) 2.368 336.285) 2.965 1.554) (246.2.405.883 271.373 19.217 973.593 74.622.442 million (2009: Rs 193.263.928.314.950 63.163)(1.489.730 (146.416 8.021 776.236 695 455.542 1.445 1.630 13.262 2.255 2.510 104.823.661 (24.229) 15.929 11.704 324.877.896.811) 928.866 83.251.151.024 2.604 56.011 (8.316 16.879 2.464) 1.260.000) 1.217 3.728.069 118.505) (233.135.055 million) in respect of staff retirement benefits.627 1.643.098 (1.655) 961.688 8.405 499.649 969.404 - 64.505 (11.797 882.928.834 26.618.835 26.700 3.658) - - (2.251.036 1.329 949.155 1.332) 2.016 119.2 Opening stock of work-in-process Closing stock of work-in-process .791 246.852 10.420 2.539) 15.227.674.188 1.Amounts in Rs ’000 26.341 7.404 Closing stock of finished goods .999 1.236) (58.227.946.719.010 24.410 (48.577) 20.950.547.805 54.444 3.237 16.270 28.801 8.871 696.470 10.114 930.078 111.268 86.962.956 392.655 4.862 10.410 493.211 64.395.394.010 (5.408 20.303.600 23.003 476.436.839) (837.969) 3.171 18.586) (774.911.241 3.284 696.027) (509.211 3.489) 741.877.174 13.709 887.039.333.268 - 28.775.263.812 (259.573 2.290.177 1.436 1.745.617) 23.518 18.030.591 22.707 13. rates and taxes Insurance Repairs and maintenance Depreciation and amortisation note 12.987 285.456 26.368 2 9 428 1.404 11.410 (55.857 300 3.610 83.124 916 - 271.743 (10.838) (141.755 43 423.021) 837.709 776.080 276. wages and benefits include Rs 163.386 (9.406.841 (74.942.note 18 Provision for obsolete stocks .854 1.709 3.350) 10.615) 5.148 108.368 .815 .339 (21.893 27.024 846 15.854 23.964) (1.621 1.241 (38.328.345.612 973 3.335) 335.585 75.800 5.057 (203.637 15.932 (612.046.497 950 320.235 6.074.244 12.820 357.379 16.358 1.582 332.070.938 268.945 1.963 106.note 18 Cost of goods manufactured Opening stock of finished goods Finished goods purchased (867.736 21.767 15.217 1.598 - (2.191 14.234 4.851 201.124 30.316 832 954 128 83.750 24.217.690 37.852 85.

325 12.650 20.622 137.447 17.544 12.323 6.098 27.261 12.010 546 546 139.723 7.191 5.728 66.447 15.615 9.813 million (2009: Rs 132.953 30.945 30.017 140.568 493.897 6.241 11.340 1.499 112.510 64.Note 17.070 6.080 12.5 & 13.543 59 7.370 28.640 9.200 193.877 1. Selling and Distribution Expenses Polyester 2010 2009 Salaries and benefits Repairs and maintenance Advertising and publicity Rent.857 4.000 6.236 277 149.100 10.4 .954 1.093 35.972 1.018 7.828 1. 2010 Amounts in Rs ’000 27.672 1.250 6.573 4.651 4.1 Provision for obsolete spares .965 239.652 3.1 Travelling expenses Postage.022 529 7.949 477 623 10.395 63.892 1.060 692 4.000 40.781 13.040 2.626 7.302 7.072 725.807 197.163 15 40.821 - 138.1 Staff retirement benefits Salaries.note 40.065 38.028 1.569 million (2009: Rs 67.814 57. telegram.537 262.173 327 69.986 1.049 5. 154 Annual Report 2010 ICI Pakistan Limited .618 9.349 1.189 23.683 195. 28.111 381 2.930 3.063 765.759 1.332 14.137 3.114 11.077 657.631 2.533 120.696 1.329 37. telephone and telex General expenses note 28.079 10.504 55.701 72.144 59.778 1.708 8.282 1.298 38.240 million charged by the Company for certain administrative service charges in accordance with the service level agreement which have been eliminated from the total.149 229.675 735 3.589 203. 28.986 424.075 172.454 5.804 291. heating and cooling Depreciation and amortisation note 12.759 56.938 1.674.204 117.1 Staff retirement benefits Salaries.481 8.249 8. wages and benefits include Rs 81.140 3.404 3.134 543 2.note 22.164 63.688 21.4 Provision for obsolete stock .961 132.365 300.138 2.178.147 1.076 3.470.932 10.262 69.3 & 40.005 381.969 5.521 405.000 12.413 265.285 5.284 3.637 134.2 Service Charges from subsidiary This includes Rs 0.873 24.274 - - 64.948 44.948 1.others .610 40.142 2.973 128.061 290.100 45.855 2.010 3.980 1.772 million) in respect of staff retirement benefits.588 5.Note 18.491 1.247 508. wages and benefits include Rs 148. telephone and telex General expenses Soda Ash 2010 2009 2010 Paints 2009 Life Sciences 2010 2009 Chemicals 2010 2009 Others-PowerGen 2010 2009 Group 2010 2009 46.Notes to the Consolidated Financial Statements For the year ended December 31.518 85.442 2.655 134.372 5.681 2.882 774 10.991 641 5.003 866 680 425 1.241 1.478 6.000 5.969 61.271 2.617 344.449 148.531 2.862 64.626 8.1 Outward freight and handling Travelling expenses Postage.879 3.301.531 1.491 4.675 1.719 13.174 27.591 122 15.179 86.700 2.172 191.242 7 9.347 15.647 3.837 2.082 7.337 32.273 168.2 129.206 423 8.332 19.660 188.678 20.182 3.078 3.192 2.089 11.513 4.980 - - 548.999 7.036 11.551 552 3.630 15.trade . heating and cooling Depreciation and amortisation note 12.910 23.901 - - 13.801 26.590 81.516 14.479 780 1. rates and taxes Insurance Lighting. rates and taxes Insurance Lighting.617 40.784 28.866 1.411 18.480 17 21.033 987 1.352 1.933 253.407 9.329 68.593 million) in respect of staff retirement benefits.652 448.151 31.223 179.581 1.046 44.473 14 1.646 9.500 21.239 16.664 93.858 6.860 11.452 587 316 1.505 16. telegram.095 2.572 628.297 184.149 55.107 401 20.148 34.999 91.5 & 13.897 16.013 2.676 3.896 145.791 1.316 151.676 6.938 8.775 75.438 3.195 22.124 2.891 25.567 20.872 788 649 3.934 1.586 352.1 Provision for doubtful debts .260 75.703 1.530 2.807 6.522 2.487 110.715 2.732 5.538 12.171 3.065 29.416 72.344 1.567 3.121 19.153 13.439 11.088 24. Administration and General Expenses Salaries and benefits Repairs and maintenance Advertising and publicity Rent.063 896 922 434 873 220.381 817 739 3.579 9.

Amounts in Rs ’000 2010 29.750 30.750 16.383 74. Feroz Rizvi. in accordance with the Service Agreement based on commercial terms between the Companies.768 397.428 165. Seemi Saad.note 30.2 Workers' profit participation fund .243 6. Other operating income Income from related parties Service fees from related party .note 31.464 162. Karachi).656 31. ICI Pakistan Limited Annual Report 2010 155 .3 Workers' welfare fund 8.606 104. Executives of the Company are amongst the Trustees of the Foundation.906 167. upto September 2009.2 Donations include Rs 15.259 5.662 44.454 6.536 6.742 30.543 10. Other operating charges Auditors' remuneration .note 10.015 655 6.525 22.815 650 8.525 5.293 282.940 59.960 244 14.1 Donations .995 2.965 2. Financial Charges Mark-up on short-term financing Interest on workers' profit participation fund . Suhail Aslam Khan and Ms.419 416. Directors of the Company and Mr.948 94. Mr.3 Discounting charges on receivables Exchange losses Interest on security deposits and others 1.326 62.302 77. plant and equipment Others Provisions and accruals no longer required written back Income on technical assistance Income on sale of Adhesive to Henkel Sundries 16.97 million) to ICI Pakistan Foundation (Head office.527 57.277 199.1 Auditors' remuneration Audit and Group reporting fee Half yearly review and other certifications Out of pocket expenses 6.139 307.080 1.1 This represents amount charged by the Group for certain management and other services rendered to its related party Lotte Pakistan PTA Limited.564 2.note 10.416 2009 19. Ali Asrar Aga and Mr. Mr.105 82. 31. Waqar A Malik.060 1.211 57.1 Return from financial assets Profit on short-term and call deposits Income from non-financial assets Scrap sales Gain on disposal of property. Chief Executive.795 million (2009: Rs 13.896 248.837 49.436 30.835 185.note 30.

819 122.814 564.762 (3.083 36.note 8 Net tax charged . Earnings per Share .230 Number of persons 1 2009 1.2 Tax impact on income under FTR of the current year Others Net tax charged 3.768 32.802 19.098 1.394 1.368 154.439) 5.103 2. Directors and Executives of the Group were as follows: Chairman 2010 Managerial remuneration Retirement benefits Group insurance Rent and house maintenance Utilities Medical expenses 1.162 1 Chief Executive 2010 25.410 5.note 32. 2010 Amounts in Rs ’000 2010 32.209 37.2 33.330 Weighted average number of ordinary shares in issue during the year Earnings per share 34.300 Rupees 17.512 30.Basic and diluted Profit after taxation for the year 2.135 5.477.768 32.680 30.540 (154.226 107.802.957 16.85 14.555 84 221 42. to the Chairman.333) 1.685 126 419 5.964 5 382 328 388 335 156 Annual Report 2010 ICI Pakistan Limited .734 (17. Taxation Current Prior years Total current tax charge Deferred .268 647 203 32.690 3.779.636 41.348 418. Chief Executive.027.150 474.439) 473.974 7.078.082.374 554.162 1. Remuneration of Directors and Executives Number of shares 138.841 127.577 19.032 148.928 (16.395 940.893 774.80 The aggregate amounts charged in the financial statements for the remuneration.690 2009 490.939 699.616 1 Directors 2010 34.027.981 159.310 15.1 1.5% of turnover has been waived under second schedule of the income tax ordinance 2001.363 6.302.Notes to the Consolidated Financial Statements For the year ended December 31.note 32.054.897) 2.362 42 6.302.022 775 91 38. The turnover tax at the rate of 0.973 4.457.300 138.791 858.802.069 4 2009 Executives 2010 2009 Total 2010 2009 33.357) (40.383 145.209 7.793 1.655 1 2009 21.850) 1.661 4.863 503.321 42 5. including all benefits.712) 4.457.230 1.322.1 Tax reconciliation Profit before tax Tax @ 35% Prior years' tax charge Permanent difference Tax impact on profit of subsidiary .780 1.992 (6.143 120.540 1.813 (17.

000 20.477 22. local associated company.2 Sodium Bicarbonate PowerGen . key employees (note 34) and staff retirement funds (note 7).4 35. ICI Pakistan Limited Annual Report 2010 157 .343 123.000 350.765 36. a special bonus of Rs 12.192 181. The capacity of Paints and Chemicals is indeterminable because these are multi-product plants.220 million (2009: Rs.V.3 The Directors and certain Executives are provided with free use of Company cars in accordance with their entitlement.291 15. The above balances include an amount of Rs 188.700 67. Plant Capacity and Annual Production .099 1.2 34.650 34.750.400 92.356 million) relates to post employment benefits.335 6.1 In addition to this.note 36.487 4. 0.359 million) on account of remuneration of key management personnel out of which Rs 26. to employees.Amounts in Rs ’000 34.0 million (2009: Rs 28.8 million) on account of variable pay.2 Chemicals .163 33.note 36. This amount is payable in 2011 after verification of achievements against target.114 million (2009: Rs 141.000 221.000 221. The Chief Executive is provided with Company maintained furnished accommodation and free use of Company car. Further.note 36.580 63.429 789. This includes fees paid to directors amounting to Rs.2 36.note 36. materials and services Provision of services and other receipts Sale of goods and materials Dividends Donations 118.052.440 126.218 13.1 Paints .9 million) payable to certain employees has been recognised in the financial statements which is payable in 2011.328 Paid in 2009 relating to 2008 11.131 153. 0.3 122.9 million (2009: Rs 209.000 350.000 20. an amount of Rs 228.048 34. Transactions with Related Parties The related parties comprise parent company (ICI Omicron B.748 9. other than those which have been specifically disclosed elsewhere in these consolidated financial statements are as follows: 2010 Associated companies Purchase of goods. Details of transactions with related parties.500 33.741 8.978 Production Annual Name Plate Capacity 122.225 million (2009: Rs 3. ultimate parent company (Akzo Nobel N.529 125.274 million (2009: Rs 24.3 Production was below name plate capacity due to gas curtailment.765 11.978 2009 Production 129.082 23.445 278. has been recognised in the current year.752 37.V.795 5.444 9. Electricity by PowerGen is produced as per demand.970 2009 34. Aggregate amount charged in the financial statements for remuneration to three Non-executive Directors (not included above) was Rs 3.600 131.).in metric tones except Paints which is in thousands of liters and PowerGen which is in thousand of Kilowatts: 2010 Annual Name Plate Capacity Polyester Soda Ash . 36. companies where directors also hold directorship.249 million) for attending board and other meetings which is not included above.1 36.228 million).). Out of variable pay recognised for 2009 and 2008 following payments were made: Paid in 2010 relating to 2009 Chief Executive Directors Executives Other employees 13. related group companies. directors of the Company.642 269.

000 (71. The executives management team is responsible for developing and monitoring the Group’s risk management policies.700) 2. aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.Notes to the Consolidated Financial Statements For the year ended December 31. 39. liquidity risk and market risk (including currency risk. The Group's overall risk management policy focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Group's financial performance.350. 39. and reviews the adequacy of the risk management framework in relation to the risks faced by the Group. 158 Annual Report 2010 ICI Pakistan Limited . FINANCIAL RISK MANAGEMENT The Group's activities expose it to a variety of financial risks: credit risk.1 Interest Rate Risk Interest rate risk is the risk that the fair values of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Market risk comprises of currency risk. 2010 Amounts in Rs ’000 37.846. The audit committee oversees compliance by management with the Group’s risk management policies and procedures. At the reporting date the interest rate profile of Group's interest-bearing financial instruments were: Carrying Amount 2010 Fixed rate instruments Financial assets .300 3. therefore a change in interest rates at the reporting date would not affect profit and loss. interest rate risk and other price risk. Fair Value of Financial Assets and Liabilities The carrying amounts of the financial assets and financial liabilities approximate their fair values and is determined on the basis of non observable market data. interest rate risk and price risk).007 2009 Sensitivity analysis for fixed rate instruments The Group does not account for any fixed rate financial assets and liabilities at fair value through profit and loss. Market Risk Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices.Note 23 Financial liabilities .278.000 (80. The Group.927. The team regularly meets and any changes and compliance issues are reported to the Board of Directors through the audit committee. Risk management systems are reviewed regularly by the executive management team to reflect changes in market conditions and the Group’s activities.1 Risk Management Framework The Board of Directors has overall responsibility for establishment and over sight of the Group's risk management framework.993) 3. 38. through its training and management standards and procedures. 38.Note 10 2.

586 90. However the forward foreign exchange contracts were not available for imports in 2010 in accordance with State Bank of Pakistan instructions.267) GBP JPY Trade debts Other receivables Due from Associate . SGD Trade debts Other receivables Due from Associate .812 78.789.note 10. purchases and borrowings.236 (430.2 Foreign currency risk Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.632 (1.186) 80. are entered in a currency other than Pak Rupees.800 2.994) 11.81 0.207 7.84 81.09 85.340 62.294 1.580 167.665 135 98.72 1.87 56. The Group is exposed to foreign currency risk on sales.note 22.1 Gross balance sheet exposure 15 15 (15) EURO 10.91 60.293 (5.52 Spot rate as at December 31 2010 2009 Rupees 114.85 0.420 504.note 22.992.824 (30.18 131.789 59.420 80.562. by way of inland letters of credit. the Group has a system of assigning credit limits to its customers based on an extensive evaluation based on customer profile and payment history.436.641 17. Business with customers is also secured.774 1. cash security deposit and bank guarantees.2 million).665 (573.369 (156.607 1.986 (60.805 62. To reduce exposure to credit risk the Group has developed a formal approval process whereby credit limits are applied to its customers.687.859 107.186 1.227 125.37 84.646 5. ICI Pakistan Limited Annual Report 2010 159 .371 663.30 85. Credit Risk Credit risk represents the accounting loss that would be recognised at the reporting date if counter-parties failed completely to perform as contracted.7 million (2009: Rs 23. The Group does not have significant exposure to any individual counterparty.667 123.105 30.Amounts in Rs ’000 39.719 26. which.2 Due to Associates .75 132.180 (1.800 57.97 62.2 Cash and bank balances Trade and other payables Accrued interest / return on unsecured loan .398 662.859 10.note 10.759 299.293) Significant exchange rates applied during the year were as follows: Average rate for the year 2010 2009 Rupees 113.109 21.note 10.427 4.510) USD 2010 9.916 305.2 Due to Associates .69 127.647 4. 40.24 137.87 121.824) 2.06 Rupees per EURO USD GBP JPY SGD Sensitivity analysis Every 1% increase or decrease in exchange rate with all other variables held constant will increase or decrease profit after tax for the year by Rs 21.235. To mitigate the risk.55 113.668 1.05 66. Foreign currency risk arises mainly where receivables and payables exist due to transactions entered in foreign currencies.816) 5. where possible. Outstanding customer receivables are regularly monitored.287 202.note 10.2 Cash and bank balances Trade and other payables Accrued interest / return on unsecured loan .1 Gross balance sheet exposure 4.75 0.293 5.964) 2009 11.029 511. The management also continuously monitors the credit exposure towards the customers and makes provision against those balances considered doubtful of recovery.

751 160 Annual Report 2010 ICI Pakistan Limited .110 5.352 43.973 5.751 5.725.646 (676) 285.252 281.note 22 Bank balances .500 148.317 63.note 16 Trade debts .110 201.note 21 Other receivables .327 27.Notes to the Consolidated Financial Statements For the year ended December 31.120 285. 40.409) (15.002 25.298 9. trade receivables and loans and advances at the reporting date is as follows: Not past due Past due but not impaired: Not more than three months Past due and Impaired: more than three months and not more than six months more than six months and not more than nine months more than nine months and not more than one year more than one year 5.120 2.830.861.note 15 Long term deposits .805 Less: Provision for: .Unsecured 496.note 23 2.131 30.note 19 Loans and advances .Doubtful debts .383 40.Secured .note 28 Provision utilised against write offs Provision no longer required 277.620 354.259.631 139.430 21.683.165 299.879 124.2 Financial Assets .note 14 Long term loans .note 20 Trade deposits .378 219.490 Loans and Advances 8.3 The ageing of bank balances.687 343.872) 354.669 4.140 (57.872) 343.304 277.500 10.229.620 Total 285.873 818.229.893 12.940 9.307 6.358.668 546.1 Financial Assets Long-Term Investment .043 6.313 5.351 286.692.500 131.451 332.668 2009 2.695 6.736 122.Doubtful loans and advances 40.171 491.605.383 The Group has placed its funds with banks which are rated A-1 by Standard & Poor's and P-1 by Moody's.266 4.265 22.490 10.631 8.340 5.211 944.986 6.751 141.358.483 75.640 (57.535. 2010 Amounts in Rs ’000 2010 The Group's maximum exposure to credit risk at the reporting date is as follows: 40.409) (15.255 632.655 22.768 458.4 Movement of provision for trade debts and loans and advances Trade Debts Opening Additional provision .

631 8.701 36.620 354.282 284.490 10.553 40. comprising trade debts.184.Doubtful debts .264 516.620 354.717 5.725.1 The recommended approach for provision is to assess the top layer (covering 50%) of trade receivables on an individual basis and apply a dynamic approach to the remainder of receivables.605.490 10.120 285.972 60.120 285.112 491.535.046 4.Amounts in Rs ’000 2010 40.891.085 22.799 31.614 632. loans and advances and bank balances is given below: Textile Glass Ceramics Paper and Board Chemicals Pharmaceuticals Construction Transport Paints Bank Others Less: Provision for: .631 8.110 137.110 5.679 2.423 343.5 The maximum exposure to credit risk for past due and impaired at the reporting date by type of counterparty was: Wholesale customers Retail customers End-user customers Less: Provision for: .751 5.307 379.653 6.Doubtful debts .408 183.985 18.Doubtful loans and advances 92.805 ICI Pakistan Limited Annual Report 2010 161 .731 36.5.880 12.313 217.415 24. and • Provide impairment loss for 100% when overdue more than 120 days.884 109.624 18.830.691 179.6 Concentration Risk The sector wise analysis of receivables.687 343.751 346.137 232. 40. The procedure introduces a Group-standard for dynamic provisioning: • Provide impairment loss for 50% of the outstanding receivable when overdue more than 90 days.Doubtful loans and advances 202.073 14.641 240.577 2009 164.976 621.308 4.556 277.986 234.304 277.

Carrying amount Financial liabilities Trade creditors .712 299.169.466 1.993 10.392) (10.342) (35.177.2 Accrued expenses Technical service fee / Royalty Distributors' security deposits .270.705 30.109 1.142.892.342 35.600 2. Liquidity Risk Liquidity Risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities.551) (107.653) (4.892.712 299.4 Contractors' earnest / retention money Unclaimed dividends Payable for capital expenditure Others 1.103 4.532 151. 2009 Financial liabilities Trade creditors .647 1.544 101.466) (1.653 4.note 10.147.975 77.082.487 (977.075) (1.392 10.316) (89.786 305.981 11.Notes to the Consolidated Financial Statements For the year ended December 31.551 107.466 1.700 11.note 10.103 4.600 2.705 30.544 101. Group's treasury aims at maintaining flexibility in funding by keeping committed credit lines available. 2010 Amounts in Rs ’000 41.610 4.855) (2.342 35.855 2.712) (299.082.548) (139.781) (5.975) (77.169.2 Accrued expenses Technical service fee / Royalty Distributors' security deposits .647) (1.610 4.177.781 5.payable on termination of distributorship .note 10 Bills payable Mark-up accrued on short term financing Accrued interest / return on unsecured loan .544) (101.796 (1.786 305.532 151.4 Contractors' earnest / retention money Unclaimed dividends Payable for capital expenditure Others 977.855 2.975 71.883. The table below analyse the Group's financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet to the maturity date.note 10.082.548 139.103) (4.109 1.988.988.177.075 1.548 139.payable on termination of distributorship .316 89.600) (2.147.note 10 Bills payable Mark-up accrued on short term financing Accrued interest / return on unsecured loan .270.075 1.796) Contractual cash flows 2010 Less than one year It is not expected that the cash flows included in the maturity analysis could occur significantly earlier or at significantly different amount.109) (1. Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities.088 977.786) (305.551 107.169.610) (4.487) 162 Annual Report 2010 ICI Pakistan Limited .653 4.988.532) (151.note 10.316 80.705) (30.781 5.270.647 1.981) (11.515 1.

Capital Risk Management The Group's objective when managing capital is to safe guard the Group’s ability to continue as a going concern so that it can continue to provide returns for shareholders and benefits for other stakeholders. tax department has taken certain action in the order. That notice had raised certain issues relating to vesting of PTA assets by the Company which has been settled in the assessment year 2001-2002. Standards or Interpretations not yet effective The following standards. It is the Group's contention that such an action is unwarranted. This interpretation has no impact on the Group's financial statements. 2001 rather than the effective date given in the Scheme of Arrangement as October 1. The future cash flows used in the impairment testing of assets is based on management's best estimates which may change in future periods. hearing of appeal has been completed and the order is awaited. The very basis of such an action have also been challenged before the High Court of Sindh which are pending for hearing. The tax department reopened the income tax assessment for the assessment year 2001-2002 on the ground that demerger of PTA business from ICI Pakistan Ltd. The said recommendations also include estimates with respect to residual values and depreciable lives. Pension and Gratuity Certain actuarial assumptions have been adopted as disclosed in note 7 to the financial statements for valuation of present value of defined benefit obligations and fair value of plan assets. 2011. Whilst amending the assessment for the Tax Year 2003 and 2004. While this case is pending for adjudication. An appeal before the CIT (Appeals). on the matter has been filed which is pending. in view of the Supreme Court's decision relating to assessment year 2001-2002 it is unlikely that the department can take an adverse action. 44. review of the Supreme Court's decision relating to assessment year 2001-2002 it is unlikely that the department can take an adverse action. In order to maintain or adjust the capital structure. the amounts are shown as contingent liabilities (unless there is remote possibility of transfer of benefits). While this case is pending for adjudication. 43. Property. The department has however filed an appeal in the Supreme Court against the High Court’s order. Any changes in these assumptions in future years might affect unrecognised gains and losses in those years. and to maintain a strong capital base to support the sustained development of its businesses. Further. A writ petition against the said notice has been filed with the High Court of Sindh which is pending for hearing. The Company has filed an appeal against the said order before the CIT(Appeals). These standards are either not relevant to the Group's operations or are not expected to have significant impact on the Group's financial statements: Amendment to IAS 32 Financial Instruments: Presentation – Classification of Rights Issues (effective for annual periods beginning on or after February 01. 1979.42. if any. the Group reviews the value of the assets for possible impairment on an annual basis. the Group may adjust the amount of dividend paid to shareholders or issue new shares.e. Instances where the Group's view differs from the view taken by the income tax department at the assessment stage and where the Group considers that its view on items of material nature is in accordance with law. 2010). This was challenged by the Group in the High Court which upheld the Group's contention that the department did not have the right to reopen this finalised assessment. The Income Tax Appellate Tribunal earlier set aside the assessment for the assessment year 1998-99 on the issues of date of commissioning of PTA plant & depreciation thereon. The appeal was dismissed by the Supreme Court. Any change in the estimates in future years might affect the carrying amounts of the respective items of property. considered by the department as “protective assessment” on the matter of unabsorbed depreciation carried forward. restriction of cost of capitalisation of PTA plant and addition to income in respect of trial production stocks. options or warrants pro rata to all of its existing owners of the same class of its own non-derivative equity instruments. amendments and interpretations of approved accounting standards are effective for accounting periods beginning on or after January 1. For the assessment year 2002-2003 on receipt of notice under section 62 of the Income Tax Ordinance. The Group manages its capital structure by monitoring return on net assets and makes adjustments to it in the light of changes in economic conditions. August 6. Plant and Equipment The estimates for revalued amounts. The re-assessment was finalised by the department during the year giving rise to an additional tax demand. The IASB amended IAS 32 to allow rights. plant and equipments with a corresponding affect on the depreciation charge and impairment. was effective from the completion date i. 2001. of different classes of property. the Company had filed a writ petition in the Supreme Court challenging the tax department’s notice that the effective date of PTA’s demerger was August 6. review of the Supreme Court's decision relating to assessment year 2001-2002 it is unlikely that the department can take an adverse action. are based on valuation performed by external professional valuers and recommendation of technical teams of the Group. 2000. plant and equipment. Notice under section 221 of the Income Tax Ordinance 2001 for rectification of deemed assessment order for the Tax Year 2005 has been issued to disallow unabsorbed depreciation carried forward. ICI Pakistan Limited Annual Report 2010 163 . Accounting Estimates and Judgements Income Taxes The Group takes into account the current income tax law and decisions taken by appellate authorities. While this case is pending for adjudication. options or warrants to acquire a fixed number of the entity’s own equity instruments for a fixed amount of any currency to be classified as equity instruments provided the entity offers the rights.

Disclosures – Transfers of Financial Assets (effective for annual periods beginning on or after July 1. These amendments remove unintended consequences arising from the treatment of prepayments where there is a minimum funding requirement. Effective dates. The revision amends the definition of a related party and modifies certain related party disclosure requirements for governmentrelated entities. 2011). Improvements to IFRSs 2010 – In May 2010. Amendments to IAS 12 – deferred tax on investment property (effective for annual periods beginning on or after January 1. Corresponding Figures Corresponding figures have been rearranged and reclassified. These amendments will result in increased disclosures in the financial statements.1 47. The consolidated financial statements for the year ended December 31.807 1. 2011. 2011). for better presentation and disclosure. 2011 have recommended a final dividend of Rs 12. Amendments to IFRIC 14 IAS 19 – The Limit on a Defined Benefit Assets. 2010). the IASB issued improvements to IFRSs 2010. 2011. early application and transitional requirements are addressed on a standard by standard basis. Dividend The directors in their meeting held on February 16. 46. Certain of these amendments will result in increased disclosures in the financial statements.2 General Figures have been rounded off to the nearest thousand rupees except stated otherwise. 47. IAS 24 Related Party Disclosures (revised 2009) – effective for annual periods beginning on or after January 01. 2012).Notes to the Consolidated Financial Statements For the year ended December 31. The amendment has no impact on financial statements of the Group. 2010 IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments (effective for annual periods beginning on or after July 01. The amendments introduce new disclosure requirements about transfers of financial assets including disclosures for financial assets that are not derecognised in their entirety. 2011. heating and cooling Amounts in Rs '000 1.774 M J Jaffer Chairman / Director Waqar A Malik Chief Executive Feroz Rizvi Chief Financial Officer 164 Annual Report 2010 ICI Pakistan Limited . The 2010 amendment provides an exception to the measurement principle in respect of investment property measured using the fair value model in accordance with IAS 40 Investment Property. Minimum Funding Requirements and their Interaction (effective for annual periods beginning on or after January 01. This interpretation has no impact on Group's financial statements. Amendments to IFRS 7 . Date of Authorisation These consolidated financial statements were authorised for issue in the Board of Directors meeting held on February 16. and financial assets that are derecognised in their entirety but for which the entity retains continuing involvement. 45. 47. The amendment in future may result in certain changes in disclosures. Reclassification from component Administration and General Expenses -General expenses Selling and Distribution Expenses -General expenses Reclassification to component Administration and General Expenses -Advertising and publicity expenses Selling and Distribution Expenses -Lighting. 2010. The amendments include list of events or transactions that require disclosure in the interim financial statements and fair value of award credits under the customer loyalty programmes to take into account the amount of discounts or incentives that otherwise would be offered to customers that have not earned the award credits. 2010 do not include the effect of the above dividend which will be accounted for in the period in which it is approved.00 per share (2009: Rs 4. This interpretation provides guidance on the accounting for debt for equity swaps. wherever necessary.50 per share) in respect of year ended December 31. These amendments result in prepayments of contributions in certain circumstances being recognised as an asset rather than an expense. This amendment is not likely to have any impact on Group's financial statements. which comprise of 11 amendments to 7 standards. The majority of amendments are effective for annual periods beginning on or after January 1.

ORDINARY BUSINESS 1. consider and adopt the accounts of the Company for the year ended December 31.m. Bart Kaster.each for the year ended December 31. 2011. 2. at the Institute of Chartered Accountants of Pakistan. To authorize the Executive Directors to hold their respective offices of profit in the Company. Waqar A Malik. Chartered Accountants Avenue. SPECIAL BUSINESS 5. the report of the Auditors thereon and the report of the Directors. To receive. Karachi. Clifton. To appoint the Auditors of the Company and to fix their remuneration. 12. April 27. To declare and approve Final cash dividend @ 120% i.. to transact the following business. payable to the Members whose names appear in the Register of Members as at April 20.Notice of Meeting Notice is hereby given that the Fifty-Ninth Annual General Meeting of ICI PAKISTAN LIMITED will be held on Wednesday. 2011 Karachi Saira Nishtar Company Secretary ICI Pakistan Limited Annual Report 2010 165 . Rs. Derek W Welch. 2011. James R Rees. Feroz Rizvi.00 per ordinary share of Rs 10/. Ali A Aga. 4. 2010. By Order of the Board March 21. A statement as required by section 160(1)(b) of the Companies Ordinance 1984 in respect of the special business to be considered at the Annual General Meeting is annexed. Rogier M G Roelen. To elect eight Directors in accordance with the provisions of the Companies Ordinance 1984 for a period of three years commencing from April 29. 3. 2011 at 11:00 a. M Nawaz Tiwana. The retiring Directors are Messrs M J Jaffer. 2010 as recommended by the Directors.e. Mueen Afzal.

For Attending the Meeting: (i) In case of individuals. All Members are entitled to attend and vote at the meeting. shall authenticate his identity by showing his original CNIC or original passport at the time of attending the meeting. 7. in their registered address to our Shares Registrar. 166 Annual Report 2010 ICI Pakistan Limited . if not already provided and notify immediately changes. (c) a Declaration in terms of clause (iii). the Board of Directors' resolution/power of attorney with specimen signature of the nominee shall be produced (unless it has been provided earlier) at the time of the meeting. FAMCO Associates (Pvt) Limited. A Member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend. (iii) Attested copies of CNIC or the passport of the beneficial owners and the proxy shall be furnished with the proxy form. (iv) The proxy shall produce his original CNIC or original passport at the time of the meeting. the Board of Directors' resolution/power of attorney with specimen signature shall be submitted (unless it has been provided earlier) along with proxy form to the Company. State Life Building 1-A. 2000 issued by the Securities and Exchange Commission of Pakistan.Notes: 1. 8. For Appointing Proxies: (i) In case of individuals. 4. Transfers received in order at the office of our Shares Registrar. (v) In case of corporate entity. A proxy must be a Member of the Company. 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. (iv) and (v) of the Code of Corporate Governance. (b) a Declaration with consent to act as a Director in the manner as provided under clause (ii) of the Code of Corporate Governance. shall submit the proxy form as per the above requirement. An instrument of proxy applicable for the meeting is being provided with the notice sent to Members. if any. Members are requested to submit a copy of their Computerized National Identity Card (CNIC). (ii) The proxy form shall be witnessed by two persons whose names. 2011 will be in time to entitle the transferees to the final dividend and to attend the meeting. speak and vote for him/her. by the close of business on April 19. Any person who seeks to contest the election of Directors shall file with the Company at its registered office not later than fourteen days before the above said meeting his / her intention to offer himself / herself for the election of the Directors in terms of Section 178 (3) of the Companies Ordinance. A. 2. 1st Floor. 2011 (both days inclusive). 6. CDC Account Holders will further have to follow the under mentioned guidelines as laid down in Circular 1 dated January 26. 1984 together with (a) consent in Form 28. B. addresses and CNIC numbers shall be mentioned on the form. FAMCO Associates (Pvt) Ltd. (ii) In case of corporate entity. Karachi-74000. An instrument of proxy must. to be valid. 5. I. Chundrigar Road. 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.I. 3. Share Transfer Books of the Company will remain closed from April 20. Further copies of the instrument of proxy may be obtained from the Registered Office of the Company during normal office hours. 2011 to April 27. be deposited at the Registered Office of the Company not less than 48 hours before the time of the meeting.

including the Chief Executive and Alternate Directors (if any). the approval hereby given shall. perquisites. and the payment of remuneration to them for their respective periods of service in accordance with their respective contracts of service and the applicable service rules of the Company (including without limitation salary. bonuses. it is proposed that the following resolutions be considered and passed as an ordinary resolution: RESOLVED THAT approval be and is hereby granted for holding of offices of profit in the Company by the Executive Directors. For this purpose. be equally applicable to any other person appointed to fill such vacancy. AGENDA ITEM 5 The Executive Directors are to be authorized to hold their respective offices of profit in the Company under their respective contracts of service. allowances and retirement benefits).STATEMENT UNDER SECTION 160 (1) (b) OF THE COMPANIES ORINANCE. ICI Pakistan Limited Annual Report 2010 167 . incentives. 1984 This statement sets out the material facts concerning the Special Business to be transacted at the Annual General Meeting to be held on April 27. 2011. subject to the terms of appointment. FUTHER RESOLVED THAT in the event of any of the aforesaid offices of profit falling vacant.

CDC Account Holders / Proxies / Corporate Entities: a) The CDC Account Holder / Proxy shall authenticate his identity by showing his / her identity by showing his / her original Computerized National Identity Card (CNIC) or original passport at the time of attending the Meeting. Company Secretary Name Shareholder No. Clifton.Admission Slip The Fifty-ninth Annual General Meeting of ICI Pakistan Limited will be held on Wednesday. Shareholders desirous of attending the Meeting may avail this facility. between 9:45 a. Chartered Accountants Avenue. In case of corporate entity. Shareholders are requested to hand over duly completed admission slips at the counter before entering the Meeting premises. at the Institute of Chartered Accountants of Pakistan. Karachi. April 27. on the date of Meeting. Company's transport will wait at the corner of Karachi Stock Exchange Road. Kindly bring this slip duly signed by you for attending the Meeting. the Board of Directors’ resolution / power of attorney with specimen signature of the nominee shall be produced at the time of the Meeting (unless it has been provided earlier). Signature Note: i) ii) The signature of the shareholder must tally with the specimen signature on the Company's record.m.m. b) This Admission Slip is Not Transferable . 2011 at 11:00 a. and 10:15 a.m.

Signature on Revenue Stamp of Appropriate Value This signature should agree with the specimen registered with the Company. iv) In case of corporate entity. If a member appoints more than one proxy and more than one instruments of proxy are deposited by a member with the Company. No person shall act as proxy unless he himself is a member of the Company. day of 2011 2. Karachi. 2. not less than 48 hours before the time of holding the meeting. all such instruments of proxy shall be rendered invalid. addresses and CNIC numbers shall be mentioned on the form. . must be received at the Registered Office of the Company. Folio / CDC Account No. As witness my / our hand / seal this Signed by the said in the presence of 1. the Board of Directors resolution / power of attorney with specimen signature shall be submitted (unless it has been provided earlier) along with proxy form to the Company. iii) The proxy shall produce his original CNIC or original passport at the time of the meeting. Important: 1. ICI House. 3. duly completed and signed. For CDC Account Holders / Corporate Entities: In addition to the above the following requirements have to be met: i) The proxy form shall be witnessed by two persons whose names.Form of Proxy 59th Annual General Meeting I / We of being member(s) of ICI Pakistan Limited holding ordinary shares hereby appoint of or failing him / her of who is / are also member(s) of ICI Pakistan Limited as my / our proxy in my / our absence to attend and vote for me / us and on my / our behalf at the Fifty-ninth Annual General Meeting of the Company to be held on April 27. ii) Attested copies of CNIC or the passport of the beneficial owners and the proxy shall be furnished with the proxy form. This Proxy Form. 5 West Wharf. except that a corporation may appoint a person who is not a member. 2011 and at any adjournment thereof.

Affix Correct Postage The Company Secretary ICI Pakistan Limited ICI House 5 West Wharf Karachi-74000 .

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Safety & Security 01 02 04 05 06 07 Environmental Performance Emissions Control Water Usage Waste Management Product Stewardship Energy Efficiencies G3 Content Index 16 17 18 19 20 21 23 08 09 Assurance statement 10 12 14 11 Employee Engagement 13 Community Investment 15 Behavior Based Safety 17 Effluent Treatment Plant Reverse Osmosis 20 B+ Report Externally Assured C We have used the G3 Reporting Framework issued by the Global Reporting Initiative (GRI) and are applying the GRI Reporting Framework at Application Level C+ Mandatory Self declared C+ Report Externally Assured B A A+ Optional Third party checked GRI checked (Third-Party-Checked) “United Registrar of Systems (URS)” has checked our reporting and has confirmed it to be Application Level C+ .About us Key Performance Indicators About the report Sustainability Strategy Sustainability Framework Stakeholder Dialogue Economic Performance Integrity Management Sourcing Social Performance Employment Practices Community Investment Health.

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28 0.464 42.5****** 30 Health.8 79 96 146 Employment Practices Women executives***** On-line P&D Dialog participation Management development program Employee engagement index % % No of managers % favorable 0 77 34 0 80 121 75 12 90 338 80 Community Investment Community Program Investment PKR Million 16.79 1 0.92 0 0 0 100 1 1 0 0 0. 2 Serious loss of containment – Level 4 Regulatory actions – Level 3 number % employees number number number number number 10 100 6 1 0 0 0 2015 Target 0 100** 6 0 0 0 0 Sourcing Vendor Policy signed by key suppliers Vendor Policy signed by central NPR suppliers*** Supportive supplier visits since 2007 % % number 88 **** 21 83.Key Performance 2009 2010 23 100 11 1 2 0 0 Integrity Management Code of Conduct confirmed incidents Code of Conduct trained* Management audits including reassurance audits Serious incidents – Level 3 Serious incidents – Level 1.28 0 0 1.14 0 1.76 0 0 0 100 0 0 02 Sustainability ICI Pakistan Limited Annual Report 2010 .52 1 0 1 0 0 0. 0 1. Safety & Security Fatalities employees Total reportable injury rate employees/supervised contractors Lost time injury rate employees/ supervised contractors Occupational illness rate employees Total illness absence rate employees Fatalities contractors (supervised and independent) Total reportable injury rate independent contractors Lost time injury incidence independent contractors % sites with BBS program Distribution incidents Motor vehicle incidents with injury number /million hours /million hours /million hours % number /million hours number % number number 0 0.

64 0.16 409 0.95 0.37 0.45 0.70 2447.15 161.37 753 2324.76 0.73 Water Usage Fresh water use per ton production % sites with sustainable fresh water million m3 m3/te % 6.18 430.05 0.82 5.54 1.10 77.191 8.2009 2010 52.9 100 Waste Management Total waste per ton production Total hazardous waste per ton production Non-reusable waste per ton production Hazardous non-reusable waste per ton production Hazardous waste to landfill per ton production kiloton kg/ton kiloton kg/ton kiloton kg/ton kiloton kg/ton kiloton kg/ton 19.11 4.8 25 4.9 25 4.408 0.53 0.47 676.83 2430 4.81 0.17 0.72 0.3 2015 Target 49.39 834.151 0.51 1.11 81.53 0.59 0.13 39.04 0.49 9.59 0.3 Emissions Control COD emissions per ton production VOC emissions per ton production NOx emissions per ton production SOx emissions per ton production Direct CO2 emissions (Scope 1) per ton production Indirect CO2 emissions (Scope 2) per ton production te kg/te te kg/te te kg/te te kg/te million te kg/te te kg/te 105.96 0.907 57.251 0.42 0.59 9.61 1431.54 0 0 4.65 4.25 0.31 0.70 0.280 0.36 8.412 9.295 0.57 0.238 0.93 2209.22 0 0 4.32 0. ICI Pakistan Limited Annual Report 2010 Sustainability 03 .23 422.40 2.48 0 0 Product Stewardship Product Eco-premium solutions % sales - * Number of Management and Non-Management Employees ** We aim to achieve 100% training level by including contractual staff as well ***Major Public Sector Utility suppliers not included in this analysis **** Monitoring started 2010 ***** Functional and Business Head Positions ******This amount includes contribution by stakeholders including ICI Pakistan Limited staff and parent company contribution for floods.015 27.

Pakistan 9242-36369382 Vegetable Seeds The text and statistics in this Report cover sites owned and operated wholly by ICI Pakistan Limited during the period 1 January 2010 to 31 December 2010. an important step towards integrating sustainability within the organization was conducting a stakeholder dialogue and establishing Key Performance Indicators (KPIs). This is our third effort on presenting a Sustainability Report and we have used the G3 Reporting Framework issued by the Global Reporting Initiative (GRI) and are applying the GRI Reporting Framework at Application Level C+. Report Content In 2010. The GRI is a large multi-stakeholder international network of thousands of sustainability experts. Data pertaining to integrity management. Safety and Environment Manager. The content of this report has been decided upon by the Sustainability Council and has been developed in accordance with our Sustainability framework based on the triple bottom line concept of economic.com/pk If you are unable to access these resources or need further information. health. Environment & Security (HSE&S) performance indicators. we also had Ernst & Young conducting an independent sustainability audit results of which have been incorporate in our improvement plans.Manager Corporate Communications & Public Affairs 5 West Wharf. Any additional developments shall be reported accordingly however. Community Investment is handled by the ICI Pakistan Foundation which is a separate legal entity registered as a Trust. Contact Us We encourage feedback on our Sustainability Report. unless otherwise indicated. These KPIs also have targets set for 2015 which shall serve as pathfinders for us. ICI Pakistan Limited has four manufacturing sites. Lahore. Karachi. Reporting Period The reporting period is January 01. social and environmental parameters. The GRI G3 Reporting Framework is the most widely accepted global standard for corporate responsibility reporting. 2010 to December 31. 04 Sustainability ICI Pakistan Limited Annual Report 2010 .About the We began voluntary reporting on sustainability for the first time in 2008 with the first report published along with the Annual Report covering the period 1 January 2008 to 31 December 2008. please e-mail us at: sustainability. please contact: Seemi Saad . The indicators for our sustainability reporting are selected from the G3 Reporting Framework issued by the Global Reporting Initiative (GRI). This Sustainability Summary Report forms part of our sustainability reporting and is designed for general readership only. the reporting framework established this year shall be a consistent baseline standard. This year. Assurance & Verification Soda Ash Polyester Paints Chemicals Life Sciences Pharmaceuticals Animal Health Seeds Our sustainability performance is monitored through a multi-disciplinary Sustainability Council. Senior managers within the organization approved the content and the quantitative data used in the Sustainability facts and figures relating to their respective areas of responsibility. If you would like to comment on the report or find out more about our Sustainability strategy and program. employment practices. inherent to limitations associated with measuring and calculating data. Employee data includes management and nonmanagement staff. Report Boundary This report covers our five Businesses and all our Corporate Functions. Safety. Accuracy: We are confident in the overall reliability of the data reported.com A soft copy of this report and additional information on our business units and products is available on our website at www. Consistency: The KPIs set and the data reported this year serve as a baseline and reporting standard for the years to come.council@akzonobel. sourcing and community investment is compiled and monitored by sustainability council members responsible for each area.Group Technical Manager ICI House 63 Mozang. reviews and manages the data for ICI Pakistan Limited as a whole. All monetary amounts in this Report are Pakistani Rupees. United Registrar Systems (URS) has conducted an independent verification and assurance of data presented in this report. safety and security data is derived from our EPM database which is centrally managed by our Corporate Headquarters in Amsterdam. but recognize that some of this data is subject to a certain degree of uncertainty. three corporate offices and five regional/business offices. 2010 and data has mainly been obtained from our financial management reporting systems.akzonobel. This was followed by a second report in 2009 covering the period January 2009 to 31 December 2009. corporate HR information management system and the AkzoNobel and former ICI corporate reporting systems for Health. A quarterly reporting cycle is in practice and all related information is gathered and entered by respective businesses and functions while the Corporate Health. Pakistan 9221-32313524 Syed Iqbal Haider . The content of this report has been developed in accordance with the KPIs and our performance against these. Data Collection Collection: All our environmental.

shareholders. employees and the world around us. social and environmental factors. responsibilities and deliverables of each member and working group Monitoring progress against targets Sustainability Integration Paradigm 2011 . responsibilities and deliverables of each member and working group Defined Plan of Action for effective change Defined targets. Once this is achieved. monitoring and evaluation criteria for progress Monitoring & Evaluation Manage progress on set targets Identify gaps and realign processes 2010 2008-2009 Start of the Sustainability journey Basic Sustainability Report published Sustainability Council established Second Sustainability Report published Establishing a Sustainability Framework Awareness and acceptance within the organization Defining Key Performance Indicators Stakeholder Engagement Aligned with AkzoNobel KPIs and strategic agenda Defining targets GRI-compliant report published ICI Pakistan Limited Annual Report 2010 Sustainability 05 . And we can only do this if sustainability is at the heart of everything we do. Our Sustainability guiding principle is: We're committed to reducing our impact on the planet and delivering more sustainable products and solutions to our customers. That's why we aim to integrate sustainability into every area of our business for the benefit of our customers.Sustainability During 2010 we put in place a framework built around the triple bottom line concept of economic. a formal plan of action and deliverables shall be set to achieve the overall objective of embedding sustainability into every area of our business. The next step is to restructure the Sustainability Council broadening the base and extending the scope and functionality within the organization to bring about a more defined action based approach. Establishing KPIs and Restructuring the Sustainability Council is the first step towards integrating sustainability within the organization. Based on the framework we conducted a stakeholder engagement program and developed KPIs for each segment in complete alignment with our parent company. A company wide awareness of the sustainability framework was created to unify understanding of the sustainability agenda. plans of actions.2015 2011 2011 2010 Restructuring Sustainability Council Including a broader base of decision makers in the council Establishing small working groups within the council Defining roles. The Sustainability Roadmap we have drafted for ourselves is a based on the following steps: • • • • • Establishing a Sustainability Framework Obtaining Stakeholder Feedback Defining Key Performance Indicators Setting Targets Restructuring Sustainability Council • • • • Including a broader base of decision makers in the council Establishing small working groups within the council Defining roles.

Sustainability Economic Performance Integrity Management Sourcing Social Performance Health. Safety and Security Employment Practices Community Investment Environmental Performance Emissions Control mic ono Ec formance r Pe Water Usage Waste Management Product Stewardship Energy Efficiencies Sustainability l enta m on ance vir orm f Soc Per ial form ance 06 Sustainability ICI Pakistan Limited Annual Report 2010 En Pe r .

A detailed feedback report was shared with us which will now serve as a path finder in our journey of sustainability. Equally important are the people who live close to our sites. local communities and non-governmental organizations (NGOs). We commissioned United Registrar of Systems (URS) to conduct the dialogue for us. healthy relationships with stakeholders. A companywide online survey was held and feedback from staff was sought on various areas to gauge engagement levels. individual and group meetings conducted by the URS team. That's why this year we initiated a formal stakeholder dialogue with our key stakeholders. Focus Area How has ICI's presence affected their lives and what improvements can be further made Gauge service and customer satisfaction levels and what more can be done to improve Measure impact and progress of safety and environmental programs extended to contractors Gain feedback on effectiveness of supplier supportive programs and other sourcing issues Environmental performance and how to improve own and industry standards ICI Pakistan Limited Annual Report 2010 Sustainability 07 .Stakeholder Dialogue is a unique learning experience and is the first step towards building lasting. Sustainable solutions can only be developed if all societal groups work together. suppliers. Their claims and expectations vary greatly depending on their individual interests. A comprehensive engagement process was initiated with one on one interviews. employees. Our most important stakeholders are our customers. The following stakeholder groups were addressed in the dialogue: Stakeholder Community Customers Contractors Suppliers Regulators Target Group Community around Soda Ash plant in Khewra Industrial paints customers Contractual Services including Manpower Suppliers and Transporters at the Polyester Business Printers and Packagers of Life Sciences Business Environmental Protection Agency Pakistan We also conducted an Employee Engagement Survey for our staff in 2010. The feedback received has been consolidated into an action plan for all managers. owners and regulators.

Economic Integrity Management Compliance and integrity management are the backbone of our governance process and form the basis for our license to operate. The Sustainability audit was conducted for the first time. Our gauge for Code of Conduct incidents is Speak up. Monitoring Compliance To ensure effective compliance. Non-financial letter of representation: Each Business Unit has processes in place to assure compliance with the Code of Conduct and other corporate requirements.Level 3 * Number of Management and Non-Management Employees ** We aim to achieve 100% training level by including contractual staff as well 2010 23 100 11 1 2 0 0 2015 Target 0 100** 6 0 0 0 0 number % employees number number number number number 10 100 6 1 0 0 0 08 Sustainability ICI Pakistan Limited Annual Report 2010 . Future Plans Put in place a companywide robust Code of Conduct training process with effective monitoring.Level 4 Regulatory actions . The main reason behind this is that we conducted various ethics and Code of Conduct awareness sessions highlighting our Speak Up process. Sustainability audit and four Special / investigative audits were conducted by Ernst & Young The agreed plan of action for future years is to have six audits (five businesses and one corporate) and that is our 2015 target. 2 Serious loss of containment . and community involvement. refresher sessions for all nonmanagement staff are planned for 2011. At the end of the year each senior manager and finally the business unit manager signs the non-financial letter of representation to confirm compliance. an online training program is also available for refresher training. health. 2010 Overview In 2008 all Management and Non-Management employees were given Code of Conduct training. labor relations. Consequent to this. At its core is our Code of Conduct that details the requirements on employees and on the company to operate with integrity. we aim to extend code of conduct training to all contractual staff as well. The number of Speak Up incidents rose from 10 in 2009 to 23 in 2010. and lays out rules and principles governing issues such as business integrity. For staff having access to email. the number people availing the Speak Up option has increased. corporate functions. Also. Compliance audits: These are conducted within the company. All breaches of the Code of Conduct are fully investigated under the supervision of the Compliance Manager. For all new employees Code of Conduct training is mandatory at the time of induction and HR Managers across the company ensure this.Level 3 Serious incidents . The outcome is reviewed with the General Counsel and the results are reported to the Executive Committee and the Audit Committee. This audit will further help us identify areas of development. A global supplier operates a confidential telephone and web-based reporting system.Level 1. the outcome is shared with the Compliance Manager. integrated procedures and management processes are in place: Speak Up: A procedure which allows employees to express their concerns on (alleged) breaches of the Code of Conduct. Key Performance Indicators 2009 Code of Conduct confirmed incidents Code of Conduct trained* Management audits including reassurance audits Serious incidents . Also. Also in 2010 audits of all five businesses. safety and the environment.

While we work towards this end of widening the base. The objective of these “Supplier Support Visits” is to identify and nurture these critical suppliers as sustainable business partners. as formulated in our Code of Conduct and legislative requirements of the country. have appreciated the efforts. Supplier Supportive Visits In line with our Global Supplier Engagement program. We aim to do business with partners who endorse our ethical values and our social and environmental standards. our suppliers endorse and agree to follow the Health. we have created the following building blocks: Future Plans Vendor Compliance Letter By signing the Vendor Code of Code. As a part of the formal process. Key Performance Indicators 2009 Vendor Policy signed by key suppliers Vendor Policy signed by central NPR suppliers* Supportive supplier visits since 2007 *Major Public Sector Utility suppliers not included in this analysis ** Monitoring started 2010 2010 83. we work together with our suppliers to improve their overall sustainability. we have established a program of on-site visits to Critical Suppliers. Measuring Progress To measure our progress. transparency as well as better buying synergies. we review and strive to maximize the number of compliant suppliers. On an annual basis. We made a shift towards centralized compliance by including the assortment of NPR suppliers we engage with on a regular basis. A comprehensive checklist is used to find strengths and weaknesses after which we help identify actions and offer support and guidance on how to achieve improvements. This encourages us to further extend such visits to more suppliers. 2010 Overview In 2010. Safety. we expanded the focus of sourcing to include Non Product Related (NPR) suppliers.Sourcing In order to achieve sustainable growth. Our critical suppliers with whom we work on improving their sustainability. we also conduct HSE assessments which outline a two year process as to where they are at present and where they need to be. Through formal feed-back reports and follow-up visits. it is essential for us to build strong business relationships with suppliers whose actual working practices should meet our requirements. Environmental and Security standards.8 2015 Target 96 % % number 88 ** 21 79 146 ICI Pakistan Limited Annual Report 2010 Sustainability 09 . we would like to continue our current focus in 2011 through increased monitoring. This has introduced formalized processes for greater efficiency.

of employees 1308 Categories of employees Management 784 Non-Management 524 Male / Female Ratio 28/1 % of employees in collective bargaining agreements. Measuring Development In 2010 we focused our efforts on two main areas: 1. Employee engagement Engagement is the measure of our people's commitment to their roles. An inclusive environment is one where these differences are valued and where everyone has the opportunity to develop their skills and talents. development and growth in an environment that's defined by our company values. Our Leadership Talent Reviews in our businesses and functions play an important role in identifying potential talent early. Employees seeking functional learning opportunities committed to a total of over 8. Stronger employee engagement . Much more than just a survey. Capability Groups within the company have been formed to ascertain bench strength of each functional area and plan future roadmaps for our key talent ensuring a strong line of succession within the organization as well as building capability.and those looking to join us . Management Essentials Program (MEP) and Advanced Management Program (AMP) to create common understanding of leadership and management competencies. 2009 2010 2015 Target % % 0 77 34 0 80 121 75 12 90 338 80 Key Performance Indicators: Women executives* On-line P&D Dialog participation** Management development program Employee engagement index * Functional and Business Head positions ** Management staff Number of managers % favorable Core development Program We provide our employees the tools to help them meet customer expectations and position the company as customers' clear choice. 2. 100% of non management employees. managing succession planning and structuring individual development. Employment Practices as per our Code of Conduct We are committed to an attractive working environment for our employees. enabling them to do their best and feeling valued. Management development programs In 2009. we launched Management Development Programs.Social Employment Practices It is our ambition to be recognized by our employees . We also adhere to the minimum legal age requirements. The program is a global standardized best practice with AkzoNobel and is being implemented across 32 countries. We believe that growing our people is the way to grow our business for the long term and we focus our effort on developing a solid Talent Factory. 10 Sustainability ICI Pakistan Limited Annual Report 2010 . Our company Values and Success Factors (behavioral competencies) are an integral part of all development discussions and have been integrated into the system and annual performance appraisal process.creating a working environment where people feel valued and are given the right conditions to perform at their best. productivity and performance of their teams. ViewPoint is a long-term program that will help empower employees to make a difference and give them a tool to improve the morale. Excellence in People Development Performance and Development Dialog (P&D Dialog) The P&D Dialog incorporates both a performance review and development planning. It involves knowing what's expected of employees.a program that will play a vital role in building the Talent Factory we need. In 2010 we launched the ViewPoint Employee Engagement . hire and promote employees solely on the basis of their suitability for the job.as a company which offers opportunity to its people for ongoing learning. Total no. Leadership pipeline A strong leadership pipeline is crucial to supporting the company's growth ambitions.ensuring our managers are given the right support to develop themselves through a range of local and global development programs. to stimulate their individual and professional development and to provide safe and healthy working conditions. Diversity and Inclusion Diversity is about embracing the human attributes that make us unique and Inclusion is the foundation that makes Diversity possible. In this respect. While not excluding other groups. our initial focus is on improving gender diversity and further strengthening our company's engaging environment.000 man hours of training on these programs in 2010. it is our responsibility to recruit. It is also our responsibility to prohibit harassment of any kind and exploitation of labor. Excellence in people development .

Key Role . Ideally online P&DD should be at 100% but however due to a large geographic spread and remote locations. this has been difficult to achieve.Human Resources • • • • Create enabling HR systems and processes Build managerial capability for effective engagement impact planning Facilitate and review engagement impact planning Be the sounding board for employees & managers – collate and escalate pervasive issues Drive best practice collation and dissemination Formalize enterprise level strategy and drive plans Communication results / action taken report Be role models . In total. This will enable our managers to track their progress and continue to drive improvements. Going forward.Leadership • • • Key Role . The results indicated an overall engagement score of 3.2010 Overview At ICI Pakistan. 94% of our workforce participated in the survey and the results indicated an overall engagement score of 3. 80 percent (2009: 77 percent) of employees used the webbased process. because engaged teams produce better results. The 2010 results provide us with an initial benchmark of our engagement levels and an excellent starting point to make the necessary improvements at all levels of our organization.74). We aim to increase it to 80% by 2015 which would mean an average mean score of 4 out of 5. we aim to cover over 300 managers which represent approximately 30 % of the total management population. er s Hu m • ag .74. Currently. we take pride in being an equal opportunity employer.56. We will implement another full survey in 2011.Line Managers • • • Share engagement results with the team Lead team feedback on results and impact planning Escalate issues not within the control of the team Ma an n Case Study Employee Engagement Survey Our 2010 employee survey focused on engagement. with a paper system available for the remainder. Employee Engagement Survey conducted in 2010 resulted in a concrete assessment of engagement levels thereby allowing us to design a greater employee engagement program Employee Engagement Index for 2010 may be marked at 75% (currently we are at an engagement level of 3. The 2010 Gallup Q12 survey was open to all employees. The focus for 2011 will be on continuing to increase the number of online users along with maintaining our current achievement of 100% overall completion within given timelines of the process and the quality of the manageremployee dialogue and development discussions. our female employees constitute 7% of our workforce in management cadre. There is a need to cover maximum number of managers for Management Development Program so that MEP / AMP are embedded quickly and the whole company can start speaking the same language.be the first one to conduct impact planning sessions Recognize and reward engagement efforts and performance Support engagement initiatives er L e a d s hip • • source Employee Engagement L ine Re Key Role . 79 percent of our global workforce participated. we have no female executives (defined as Business or Functional Heads). By 2015. with an ambition of increasing the overall engagement score to 4 by 2015. Females also constitute 7% of our senior management positions however. it is our intention to continue to further support diversity within our Businesses and Functions and increase the percentage to at least 12% by 2015. In 2010. In Pakistan. at present.

5 Key Performance Indicators 2009 Community Program Investment Rs. We have launched the 'Ilm-o-Hunar' skill development program end of 2010 with a pilot painter training program with Construction Technology & Training Institute (CTTI). ICI Pakistan Limited. contribution to the Foundation has also grown. Measuring Progress: Every year. shareholders and employees. Flood Relief Contribution PKR 18 million AkzoNobel NV PKR 15 million ICI Pakistan Limited PKR 2 million Staff PKR 1 million Others 2010 Overview In 2010. In the area of health. environment and infrastructural development along with disaster relief. The accounts of the Foundation are audited every year by A.464 42. Along with this ICI Pakistan Staff also made in-kind contribution and put together over 10.F. health. Ferguson & Co.464 2010 42.000 care packs with immediate sustenance items Staff efforts for floods also included 2000 volunteering hours Total contribution for Flood Relief: PKR 36 million AkzoNobel NV: PKR 18 million ICI Pakistan Limited: PKR 15 million Staff Cash & In-kind: PKR 2 million Others: PKR 1 million With most resources dedicated towards Flood Relief. many community initiatives planned for 2010 were deferred. PCP Certification is an endorsement of good housekeeping practices for charitable institutions. The Foundation is focused towards community development through investment in education. education and environmental programs.5* 2015 Target 30 * This amount includes contribution by stakeholders including ICI Pakistan Limited staff and parent company contribution for floods. Other than contributions through the Foundation. The plans for 2011 centre on developing learning centers across Pakistan. The Foundation is governed by a Trust Deed that clearly outlines the policies and procedures and clearly defines the scope of community investment activities. Over the years. 6. Details given in the Community Investment Section of the report on page 36. Pakistan faced one of the worst disasters in the history of the country in the form of floods. Community investment in Rs. 12 Sustainability ICI Pakistan Limited Annual Report 2010 . The company spent Rs. as the company has grown. monetary value of which has been accounted for in consolidation total community program investment number.5 million on health. ICI Pakistan Limited donates a percentage of profit of the organization to the Foundation. Million 16. its staff.44 14.Community Investment We're as committed to our communities as we are to our customers.692 21. million 2006 2007 2008 2009 2010 9. we aim to extend our eye care program to other locations in collaboration with leading eye care organizations like LRBT. A total of 4500 volunteering hours were contributed by staff during the year.65 16. parent company and other related concerns contributed a total of PKR 36 million to the ICI Pakistan Foundation for flood relief and rehabilitation. Our community investment activities are managed through the ICI Pakistan Foundation which is a separate legal entity with its own Board of Trustees. various businesses also directly invest in community projects. Future Plans We have applied for the PCP (Pakistan Center for Philanthropy) Certification to further streamline the operations of the Foundation.

Our idea was to design a self sustaining project that would provide the fishing community with alternate livelihood. We have helped build a model village in Khyber Pakhtoon Khuwa in partnership with Karachi Relief Trust (KRT). Each model house has 2 bedrooms. In year 2010. in 2009. The kitchen is designed and equipped for commercial cooking and the idea is to promote the delicious indigenous seafood cuisine of the area as a food alternative for beach-goers.Case Study Community Investment As mentioned in our last years Sustainability Report. a kitchen and front yard. constructed and launched the Kakapir Seafood Kitchen in the fishing community of Kakapir Village near Sandspit beach in Karachi. we funded. Highlight of the year Our first rehabilitation project for flood affectees is complete. The profits earned from this project not only cover the running expense of the kitchen but are reinvested back into the community. The project now pays for the salary of a private teacher at the local Community School. one bathroom. . the project was run and managed by the villagers earning a steady supplemental income. This project has been completely funded by contributions from our employees.

28 which is the same as last year actual. This risk matrix is an integral part of 2011 Improvement Planning across the company. Employees' involvement and engagement and role of top leadership in HSE&S continuous improvement process are integral in helping maintain top-of-the-line position in HSE&S performance. for people security. Safety & Security ICI Pakistan has always endeavored to remain best in class in terms of health and safety performance measured through Reportable Injuries for Employees and Contractors per million hours worked and zero Occupational Reportable Illnesses for the same population. Based Safety.Health.92 0 0 0 100 1 1 2015 Target 0 0 0 0 1.76 0 0 0 100 0 0 14 Sustainability ICI Pakistan Limited Annual Report 2010 .14 0 1.79 1 0. Performance Overview In 2010 there were two injuries to supervised contractor employees during the year. This performance is significantly better compared to the peer business units within the AkzoNobel Group. while driving on company business and for visitors. Key Performance Indicators 2009 Fatalities employees Total reportable injury rate employees/supervised contractors Lost time injury rate employees/ supervised contractors Occupational illness rate employees Total illness absence rate employees Fatalities contractors (supervised and independent) Total reportable injury rate independent contractors Lost time injury incidents in independent contractors % sites with BBS program Distribution incidents Motor vehicle incidents with injury number /million hours /million hours /million hours % number /million hours number % number number 0 0. Implementation of the Asset Integrity Guidelines. Behavior Based Safety and HSE&S Leadership Training have been part of this drive as AkzoNobel Corporate Initiatives. Another highlight of the year was the completion of Top10 Risk identification exercise for the company. Both these important 2010 Corporate HSE&S Plan Actions were successfully completed. Product security needs to be maintained from raw material supply to product delivery. Development Plans for critical HSE resources will be stewarded during the year. We had a reportable injury rate of 0.28 0. we strive to ensure that arrangements are in place for the appropriate security of assets and information.28 0 0 1.52 1 0 1 0 2010 0 0. reduced. our system requires that risks to employees from security threats are assessed. roll out of Behavior Future Plans First cycle review of Behavior Based Safety Program and Asset Integrity Guidelines implementation will be the significant items for 2011. Health & Hygiene assessment and monitoring program was robustly practiced across the company resulting in a zero Reportable Occupational Illness. HSE&S Leadership Training and follow-up on the Corporate Audits 2009 improvement plans were the key strategic objectives for 2010. In the same light. Similarly. Occupational Illness absence rate is marginally higher than 2009 mainly contributed by change of baseline due to PTA demerger. the validation of emergency preparedness will also be high on the corporate agenda. Similarly. controlled and monitored in the workplace.

Safety Improvement Teams at all businesses were designated as the BBS Problem Solving Teams. their environment. The team developed training modules and devised strategy for the implementation. Companywide validation review is planned in Q1 2011 to ensure BBS is securely embedded in our systems. The consultant's scope of work covered the following: • • • • • Hold training sessions with observers Impart hands on training to observers Carry out follow up session with observers Arrange summing up presentations by businesses Provide assessment and feed back to Corporate and Business HSE on progress Behavior Based Safety program was initiated in the company in the second quarter of 2010.Case Study Behavior Based Safety Behavior-Based Safety is a process that helps employees identify and choose a safe behavior over an unsafe one. and their behavior. Once the BBS Teams were in place key observers were identified. Behavior-based safety is based on four key components • • • • A behavioral observation and feedback process A formal review of observation data Improvement goals Reinforcement for improvement and goal attainment It was decided to engage an external consultant to impart training to the observers and help implement BBS effectively in the company. Safety in the workplace is a combination of three measurable components: the person. Only when these three elements are combined can workplace accidents be eliminated. The training and follow up sessions stated above have been successfully completed and all five businesses are now BBS compliant. .

64 0.47 676.72 0.25 0.64 does not include PTA.37 0.39 834.82 5. suppliers.61 1431.10 77.3 1. generate efficiencies and accelerate improvement. PTA was divested in 2009 H1 and the figure of 1.39 1.93 2209.70 0.37 753 2324.907 57.42 0.95 0.32 1.93 taking PTA into account. 4) Best practices: Promote activities to share good practice.3 2010 52. 2010 Overview Energy usage for 2009 was actually 0. aligned with business objectives.59 0. 2) Reduction: Use a structured and consistent carbon reduction approach.25 1.81 0.69 0.Environmental Emissions Control We continue to monitor and manage atmospheric emissions to ensure that there are no unacceptable environmental impacts and that local consent limits and regulatory permits are fully complied with.70 2447. 2010 Per ton Production of Energy Related CO2 2005 2006 2007 2008 2009 2010 0.1 does not include PTA.04 Environmental Policy We continue to follow the AkzoNobel Environmental Policy comprising of the following features: 1) Measurement: Measure and report on cradle-to-gate basis and manage carbon along the value chain. This will be a significant challenge considering the natural gas availability projections for 2011. Similarly the 2009 figure for per ton production of energy related CO2 of 0. Future Plans We shall continue to focus on environmental protection measures.67 0.11 81. Energy Usages Tera joule Per ton of Production (Tj / Te x 10-2) 2005 2006 2007 2008 2009 1.13 39.65 4.96 0.18 430.23 422. We aim to reduce our carbon footprint per ton of production by 10% by 2015 in relation to 2009 baseline.73 16 Sustainability ICI Pakistan Limited Annual Report 2010 . 3) Communication and advocacy: Actively communicate and approach staff.62 Key Performance Indicators 2009 COD emissions per ton production VOC emissions per ton production NOx emissions per ton production SOx emissions per ton production Direct CO2 emissions (Scope 1) per ton production Indirect CO2 emissions (Scope 2) per ton production Te kg/te Te kg/te te kg/te te kg/te million te kg/te te kg/te 105. customers.1 1.3 2015 Target 49.76 0.11 4.66 0.40 2.05 0.16 409 0.15 161.83 2430 4. investors and the general public and encourage dialogue.73 0.

2009 & 2010 have been spent in completing the fresh water management assessment using the AkzoNobel tool.9 25 2015 Target 4. The per ton consumption is marginally increased after incorporating a more comprehensive water consumption reporting from Head Office. cut down the environmental impact and has also minimized HSE hazards associated with water tanker traffic at head office. Note: Our reported water figures for the year 2009 and 2010 are based on AkzoNobel definition.2 14. At present 25% of our sites have sustainable fresh water system. which has reduced our fresh water consumption. .97 12.8 9. As per the AkzoNobel Directives and Ambition. The project commenced in January 2010 and was completed in March 2010.53 11.36 8. Future Plans The improvement plans based upon the Water Management tool will be acted upon to achieve 100% sustainable water sites by 2015.92 9. Again this is coming from PTA demerger.8 25 2010 4. Sustainable fresh water supply is critical for business continuity and sustainability.9 Key Performance Indicators 2009 Fresh water use ……per ton production % sites with sustainable fresh water million m3 m3/te % 6. our Chemicals Business successfully implemented another sustainability initiative by recycling and reusing treated water from our Effluent Treatment Plant (ETP). 100% of ICI Pakistan manufacturing sites are directed to have sustainable fresh water management system in place. Water Sustainability 2005 2006 2007 2008 2009 16.Water Usage Water management is a key element in our sustainability improvement portfolio. Part of this recycled water is being used at our Chemicals plant to wash vessels and floors. and the remaining water is being used at our adjacent head office premises for horticultural and cleaning purposes.9 100 2010 Case Study Effluent Treatment Plant After significant reduction in electricity and gas consumption.49 9. This initiative helped our Chemicals Business to meet our KPI of reducing fresh water consumption in 2010. Performance Overview The absolute water consumption in million m3 shows a reduction.59 9. About 574 cubic meters (29%) of our total ETP water was recycled from May to December 2010. only Fresh Water is reported.

04 0.174 0.17 0. about 12 tons of ETP sludge lying with Chemicals Business.22 0 0 2010 4.280 0. Note: the waste figures for 2009 and 2010 shown in the graph are on the basis of AkzoNobel definitions. reduce. Also.408 0.51 1. total hazardous and non reusable Waste is higher due to the change in classification of ETP waste at Paints Business turning it into Hazardous Waste. Key Performance Indicators: 2009 Total waste per ton production Total hazardous waste per ton production Non-reusable waste per ton production Hazardous non-reusable waste per ton production Hazardous waste to landfill per ton production kiloton kg/ton kiloton kg/ton kiloton kg/ton kiloton kg/ton kiloton kg/ton 19. reduces our environmental footprint and reduces costs.412 9.151 0.205 1.53 0. It is our aim to manage waste disposal responsibly and we focus on waste management using the principles to eliminate.178 1. reuse and recycle.64 0.32 0.191 8. Karachi as inventory was taken into reporting.54 0 0 2015 Target 4.0095 Future Plans: Our manufacturing sites will focus on incremental improvement focusing on process and product design improvement for eliminating wastes at source and to find more cost effective disposal roots. 2010 Overview: Apart from the PTA demerger which mainly contributed to the variation.45 0.238 0.54 1.228 1.295 0.015 27.53 0.Waste Management Effective waste management helps to increase raw material efficiency in our manufacturing operations.59 0.31 0.48 0 0 18 Sustainability ICI Pakistan Limited Annual Report 2010 .027 0. Waste Management 2005 2006 2007 2008 2009 2010 1.251 0.57 0.

distributed. if applicable a) It is significantly better in at least one criterion b) It is not significantly worse in any other of the criteria 2010 Overview: We are planning towards establishing an Eco-Premium Products target. At present. when assessed against the competing mainstream products: • Building Sustainability into Purchasing (Supplier Support Visits) / AkzoNobel Vendor Policy implementation Product Stewardship Improvements 1. Eco-premium solutions help to create value for our business and our customers. • • • • • Future Plans: • R&D / Marketing / Sales for Eco Premium Products Key Performance Indicators: 2009 Product Eco-premium solutions % sales 2010 2015 Target - ICI Pakistan Limited Annual Report 2010 Sustainability 19 . Procedures that ensure feedback from customers on our product usage and performance.Product Stewardship As a company we embrace product stewardship as one of the key mechanisms to support our future Sustainability. In order to fulfill this responsibility particular attention shall be paid to: • Provision of appropriate training and information to all our staff. manufactured. transportation etc. When assessed along the full value chain against the following criteria: • Energy efficiency (consumption) • Use of natural resources/raw materials • Emissions and waste • Toxicity • Risks (for accidents during production. Product Stewardship Policy: We aim to ensure that a product is developed. promoted. development of modification to meet customers needs and to minimize HSE&S impacts. contractor.) • Land use. Evaluation of suppliers and their regular assessment to ensure consistency with the HSE&S policy.regulation and standards. It provides the same or better functionality for the customer application. A product qualifying for the list of EcoPremium Solutions must meet the following criteria. Targets and measure for 2010 and 2015 are therefore not reported. manufacturing process and product innovation. Product design. In 2011. we do not have a monitoring mechanism however we are working with parent company to develop procedures and methodologies around this. correct usage and disposal of our products and in a safe and responsible manner so as to minimize chances of injury to people and damage to third parties or environment arising from its use. we will be able to report more progress. 2. All data on our products and its use shell be made available to our customers and users in order to promote sustainability. • Eco Premium solutions are an ambition in line with our Product Stewardship Policy. marketed and ultimately disposed into the environment in a socially responsible and acceptable manner with respect to HSE & S matters and it will be demonstrated that this is practiced. suppliers and customers for handling. Compliance with the applicable local laws. They provide top line growth opportunities because of improved performance in areas such as raw material use. Product Stewardship strives to achieve a sustainable and attractive balance between the inherent properties of a chemical and the benefits it provides to all major stakeholders throughout its lifecycle.

the focus is going to get sharper and the targets are going to get tougher.009 Case Study Reverse Osmosis Recently our Soda Ash Business successfully commissioned its Reverse Osmosis (RO) water purification plant.3% and 3% lower as compared to 2009. 2010 Overview Overall performance in unit terms is of the same order as reported last year. the energy consumption and CO2 emission (energy related) were 5.01 2015 Target 4. maintenance intensive and inefficient technology.0093 2010 4. This new RO plant has completely replaced the old water purification plant which was based on an obsolete. On like to like basis (excluding PPTA). . This change will help ICI to cut down on energy consumption and reduce our carbon footprint. in line with AkzoNobel's sustainability vision.8 0. It is important to note that the RO plant has accomplished 0% water rejection. Key Performance Indicators 2009 Total energy consumption per ton production 1000TJ 1000 TJ/te 6. We have initiated an ‘Energy and Innovation Forum’ comprising nominees from all businesses and headed by Corporate Technical & Engineering Department (CTED) to achieve defined objectives and targets for greener operations at all sites. Future Plans We aim to focus on energy conservation at our main office locations in Lahore and Karachi.Energy Efficiencies Objective We aim to drive energy efficient operations to improve operational eco-efficiency of our manufacturing processes.56 0.496 0. With ever increasing cost of energy. meaning each and every drop of the water processed through the plant is being utilized in one process stream or another.

biennial. Reporting cycle (annual.5 3. Date of most recent previous report (if any). divisions. subsidiaries. Significant changes during the reporting period regarding size.1 4. subsidiaries. including main divisions. etc. and names of countries with either major operations or that are specifically relevant to the sustainability issues covered in the report. sectors served.g. SR: Sustainability Report ICI Pakistan Limited Annual Report 2010 Sustainability 21 AR Page 26-30 AR Page 26 & 28 AR: Annual Report .g. change of base years/periods. nature of business. Significant changes from previous reporting periods in the scope. suppliers). Explanation of the effect of any re-statements of information provided in earlier reports. Process for defining report content. or ownership..6 2. See GRI Boundary Protocol for further guidance.4 3. Scale of the reporting organization.1 2. Commitments.2 Governance structure of the organization. and Engagement 4. Cover SR Page 04 SR Page 04 SR Page 04 SR Page 04 SR Page 04 SR Page 04 SR Page 04 SR Page 04 NA SR Page 16-20 SR Page 21 Governance.11 3.8 3. boundary. Awards received in the reporting period.5 2.1 3. I Basis for reporting on joint ventures. AR Page 03 AR Page 32 Organizational Profile 2.2 3.6 3. Location of organization's headquarters. Primary brands.7 2. leased facilities. such as setting strategy or organizational oversight.12 Reporting period (e.g. Markets served (including geographic breakdown. Indicate whether the Chair of the highest governance body is also an executive officer. subsidiaries. joint ventures. outsourced operations. leased facilities. and/or services. countries.7 3. products. or measurement methods applied in the report.1 1. and opportunities. Nature of ownership and legal form. including committees under the highest governance body responsible for specific tasks.10 3.mergers/acquisitions.3 3.. State any specific limitations on the scope or boundary of the report (see completeness principle for explanation of scope). fiscal/calendar year) for information provided.STANDARD DISCLOSURES PART I: Profile Disclosures Profile Disclosure Description Cross-Reference Strategy and Analysis 1.8 2. and joint ventures.. risks.4 2.) Contact point for questions regarding the report or its contents. measurement methods).9 2. and other entities that can significantly affect comparability from period to period and/or between organizations. Operational structure of the organization.10 Name of the organization.2 Statement from the most senior decision-maker of the organization Description of key impacts.2 2. structure. Number of countries where the organization operates. and types of customers/beneficiaries). operating companies. Cover AR Page 44-73 SR Page 04 Inside Back Cover SR 01 SR Page 01 AR Page 06 AR Page 28 AR Page 44-73 SR Page 01 AR Page 16-23 AR Page 34 Report Parameters 3.3 2. Table identifying the location of the Standard Disclosures in the report. Boundary of the report (e. and the reasons for such re-statement (e.

Rates of injury. Operations identified as having significant risk for incidents of child labor. Programs for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings. Average hours of training per year per employee by employee category.3 4. anti-trust. Public policy positions and participation in public policy development and lobbying. Operations identified in which the right to exercise freedom of association and collective bargaining may be at significant risk. and measures taken to contribute to the elimination of child labor. state the number of members of the highest governance body that are independent and/or non-executive members. Understanding and describing significant indirect economic impacts. and actions taken to support these rights. Total direct and indirect greenhouse gas emissions by weight. and monopoly practices and their outcomes. Cross-Reference AR Page 14 & 15 AR Page 29 SR Page 07 SR Page 07 STANDARD DISCLOSURES PART III: Performance Indicators Economic EC8 EC9 Development and impact of infrastructure investments and services provided primarily for public benefit through commercial.Profile Disclosure 4. Other relevant indirect greenhouse gas emissions by weight. in-kind. Total number of legal actions for anti-competitive behavior. Initiatives to provide energy-efficient or renewable energy based products and services.15 Description For organizations that have a unitary board structure. occupational diseases. Basis for identification and selection of stakeholders with whom to engage. SR Page 08 SR Page 08 SR Page 10 Social: Society SO2 SO5 SO7 Percentage and total number of business units analyzed for risks related to corruption. SR Page 10 AR Page 41 SR Page 14 AR Page 41 AR Page 42 Social: Human Rights HR4 HR5 HR6 Total number of incidents of discrimination and actions taken. Mechanisms for shareholders and employees to provide recommendations or direction to the highest governance body.14 4. AR Page 36 SR Page 12 AR Page 36 & 60 SR Page 12 &13 Environmental EN2 EN6 EN16 EN17 Percentage of materials used that are recycled input materials. including the extent of impacts. and number of work-related fatalities by region. lost days. and absenteeism. List of stakeholder groups engaged by the organization. AR Page 29 AR Page 28 AR Page 29 22 Sustainability ICI Pakistan Limited Annual Report 2010 . and reductions in energy requirements as a result of these initiatives.4 4. AR Page 56 SR Page 17 AR Page 40 SR Page 16-20 AR Page 17 SR Page 16 SR Page 16 Social: Labor Practices and Decent Work LA4 LA7 LA10 LA11 Percentage of employees covered by collective bargaining agreements. or pro bono engagement.

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