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ANNUAL REPORT 2015Unilever Pakistan Foods Limited
ContentsVision & Core Values02Company Information03Directors’ Profile04Directors’ Report05Board Meetings Attendance13Board Committee Meetings Held During the Year13Performance Indicators for 6 years15Balance Sheet - Analysis for 6 years18Profit & Loss - Analysis for 6 years20Statement of Wealth Generatedand Distributed22Pattern of Shareholding23Statement of Compliance with theCode of Corporate Governance25Auditors’ Review Report26Financial Statements27Notice of Annual General Meeting69Dividend Mandate Form73Form for Deduction of Tax on Dividend Income75Form of Proxy77
VisionWe work to create a better future every day.We help people feel good, look good and get more out of life with brands and services that aregood for them and good for others. We will inspire people to take small every day actions thatcan add up to a big difference in the world. We will develop new ways of doing business withthe aim of doubling the size of our Company while reducing our environmental impact.Core Values02ImpeccableIntegrityWowing ourConsumers & CustomersWe are honest, transparentand ethical in our dealingsat all times.We win the hearts and minds of ourconsumers and customers.Living anEnterprise CultureDemonstrating aPassion for WinningWe believe in trust, truth andoutstanding teamwork. We value acreative & fun environment.We deliver what we promise.Bringing out theBest in All of UsMaking aBetter WorldWe are empowered leaders,who are inspired by newchallenges and have a biasfor action.We care about and activelycontribute to the community inwhich we live.Unilever Pakistan Foods Limited Annual Report 2015
Company InformationBoard of DirectorsAudit CommitteeAuditorsMr. Kamran Y. MirzaIndependent Director &Chairman of the BoardMr. Zulfikar MonnooChairman & MemberMessrs KPMG Taseer Hadi & Co.Chartered AccountantsSheikh Sultan Trust Building No. 2,Beaumont Road, Karachi - 75530Pakistan.Ms. Shazia SyedExecutive Director & Chief ExecutiveMr. Ali TariqExecutive Director & CFOMs. Farheen Salman AmirExecutive DirectorMr. Zulfikar MonnooNon-Executive DirectorMian M. Adil MonnooNon-Executive DirectorMr. Kamal MonnooNon-Executive DirectorMr. Badaruddin F. VellaniNon-Executive DirectorMr. Noman Amjad LutfiNon-Executive DirectorCompany SecretaryMr. Amar NaseerMian M. Adil MonnooMemberMr. Badaruddin F. VellaniMemberRegistered OfficeMr. Kamran Y. MirzaMemberAvari PlazaFatima Jinnah RoadKarachi – 75530Ms. Mehwish IqbalSecretary &Head of Internal AuditShare Registration OfficeHuman Resource& RemunerationCommitteeShare Registrar Department,Central Depository Company ofPakistan Limited,CDC House, 99-B, Block "B", S.M.C.H.S,Main Shahra-e-Faisal, Karachi - 74400Mr. Zulfikar MonnooChairman & MemberWebsite AddressMr. Kamal MonnooMemberwww.unilever.pkMs. Shazia SyedMemberMr. Amar NaseerCompany SecretaryUnilever Pakistan Foods Limited Annual Report 201503
Directors’ ProfileKamran Y. Mirza - ChairmanKamran joined the Board in 2014 as Chairman of UnileverPakistan Foods Limited. He qualified as a CharteredAccountant from the UK. He joined Abbott Laboratories(Pakistan) Limited in 1970, where he was one of theyoungest ever Managing Director and served in thatposition for 29 years till 2006. He was also the Chairman ofthe Export Processing Zones Authority and CEO of thePakistan Business Council. Kamran is also the Chairmanof Philip Morris (Pakistan) Ltd and Education Fund forSindh (EFS) as well as serving on the Boards of AbbottLaboratories (Pakistan), Bank Alfalah, International Steel(ISL), Karwan-e-Hayat and Safari Club Previously heserved as Chairman of Karachi Stock Exchange, PMEX(formerly National Commodities Exchange) and as aPresident of Overseas Chamber of Commerce & Industry,American Business Council,; as Director of State Bank ofPakistan, Pakistan State Oil and National Bank ofPakistan. He lectures regularly at the Pakistan Institute ofCorporate Governance (PICG).Shazia Syed - CEOShazia joined the Board on April 20, 2014, and took over asCEO Unilever Pakistan Foods Limited on March 07, 2016.Prior to her role in Pakistan, Shazia was Chairperson ofUnilever Sri Lanka Limited. In her 26 years with Unilever,she has worked across most Unilever categories and hasled the Customer Development and Home & PersonalCare teams at Unilever Pakistan and Unilever Vietnam.Shazia is married with 2 children and enjoys golf.Ali Tariq - CFOan innovation & communication program for the portfoliothat was instrumental in bringing the Euro 450 million icecream business back to sustained double-digit growth.Zulfikar MonnooZulfikar joined the Board when the Company was formed.He is also the Chairman of the Audit Committee and theHuman Resource & Remuneration Committee of UnileverPakistan Foods Limited. He is an alumni of The WhartonSchool, University of Pennsylvania and Aitchison College,Lahore. He is a Director and Chairman of the AuditCommittee in Rafhan Maize Products Limited and is alsothe Chief Executive of Pakwest Industries (Private) Ltd.,Lahore.Mian M. Adil MonnooAdil joined the Board on May 5, 2002 as a Non-ExecutiveDirector. He is also the Member of the Audit Committee ofUnilever Pakistan Foods Limited. He holds directorship inRafhan Maize Products Limited and is in the business oftextile trade as the sole proprietor of HN Enterprises.Kamal MonnooKamal joined the Board on December 19, 2006 as aNon-Executive Director. Having done his schooling fromAitchison College and graduation from SyracuseUniversity and Yale University, USA, he is also the Memberof the Human Resource & Remuneration Committee ofUnilever Pakistan Foods Limited. He holds directorshipsin Samira Fabrics (Pvt) Limited, Samira Industries (Pvt)Limited, Kaarvan Crafts Foundation, and Islamabad PolicyResearch Institute.Ali joined the Board on April 1, 2013 and is currently VicePresident Finance and Chief Financial Officer of UnileverPakistan and Unilever Pakistan Foods Limited. Ali was amid career recruit in 2003 and has since held Regional andCountry roles in Singapore, UK and Pakistan. Ali is amember of the Institute of Chartered Accountants inEngland & Wales and trained with PricewaterhouseCoopers London.Badaruddin F. VellaniFarheen Salman AmirNoman Amjad LutfiFarheen joined the Board on 7 March 2016 and is currentlythe Director Foods & Refreshments. Farheen joinedUnilever as a Management Trainee in 1998. In her 17 yearscareer with the company, Farheen has worked in a numberof categories across both Food & Refreshment andHPC. In her last two years as BD Director Ice CreamNAMET, Farheen worked for Unilever Turkey and craftedNoman again joined the Board on November 01, 2015. Hehas a long association with Unilever and has headed theSupply Chain function in Unilever Pakistan. Currently, heis working as Supply Chain Director of Unilever Sri Lanka04Unilever Pakistan Foods Limited Annual Report 2015Badaruddin joined the Board on May 5, 2002. Currently, heis enrolled as an Advocate of the Supreme Court ofPakistan and is a partner in the law firm ‘Vellani &Vellani’. In addition to his legal practice, Badaruddin is amember of the Board of Directors in several multinationalcompanies covering the FMCG, manufacturing, medicaland philanthropy sectors.
Directors’ Report*
Winning with Brands and InnovationsWe have some of the world’s best known andmost trusted brands, with leadership positions inmany of the fast moving consumer goodscategories in which we compete. Committed toenhancing the quality of life of the people ofPakistan, we aim to offer a broad portfolio thatappeals to diverse consumers year on year.06Unilever Pakistan Foods Limited Annual Report 2015
Summary of Business PerformanceThe directors present the Annual Report together with the Company’s audited financial statements for the year endedDecember 31, 2015.Business Review:In 2015 the business grew by 10%, with underlying volume growth of 7%. Quarter 4 turnover growth was 15%. Grossmargin for the year improved by 156 bps on the back of cost efficiencies, better volume absorption and sales mix.Advertising and promotion was stepped up by 203 bps, reinforcing our commitment to building brands for the longterm. EPS grew by 5%.Summary of Financial Performance20152014Rupees in millionSalesGross ProfitProfit from OperationsProfit before taxProfit after taxEPS-basic 1,172200.09190.29Key Financial IndicatorsUnderlyingsales growth10%Financial HeadlinesTurnover up by Rs. 784 MnEarnings per share of Rs. 200.09Earnings per Share5%Gross margin156 bpsDividendInterim Dividend 2015 (already paid): Rs.54 per share(2014: Rs. 94 per share).Final Dividend 2015: Rs. 96 per share (2014: NIL).The key business milestones for 2015 were:Knorr,the brand grew by 20%, primarily led bynoodles, soups and sauces. Noodles continued tooutgrow the portfolio on back of two new variants andvalue added proposition. Cup-a-soup launch broughtconvenience for the soup category and helped gain topof mind awareness.Rafhan, is our largest local jewel with strong brandequity and a rich heritage. The brand grew on the back ofthe desserts portfolio, adding two new variants – chocolate& caramel. The brand also launched a new advertisementcampaign, based on celebrating occasions, which hasproven to be popular amongst mothers and children.Our PeopleUnilever Pakistan Foods Limited places its people at theheart of the company. We believe that the way to grow as abusiness is to grow our people, enabling personaldevelopment and ambitious business results. Thisinvestment in our people is what sets us apart in theindustry and drives us towards our goals with the rightpeople on board.Unilever Pakistan Foods Limited Annual Report 201507
Unilever Pakistan Foods Limited is a learning organizationwhere employees are continuously groomed to challengethemselves and make real time decisions. The Companyleverages the global Unilever Network to develop talent inMarketing, Sales, Supply Chain, Finance and HumanResource Management through our E-learningprogrammes. Personal development is facilitated throughempowering the people with bigger as well as challengingassignments, coaching, mentoring and a robust appraisalsystem.Diversity is at the heart of our agenda. We encourage ouremployees to work from agile locations and offer flexi-workhours. In order to cater to the needs of the femaleemployees, the Unilever Day Care Centre was started in2003 and is now also used by male employees, whosespouses work elsewhere. We have also revised ourmaternity leave policy in 2014, and extended it to 6 monthsfully paid. Simultaneously, we have also introduced aMaternity and Paternity Support (MAPS) portal whichemployees are encouraged to utilize in order to managetheir work-life balance when going through this crucialfamily planning stage.In 2015, Unilever provided a dedicated channel for womenon a career break to re-enter the professional worldthrough a platform called Career By Choice (CBC). Thisplatform enables women to make valuable contributions tobusiness and manage their domestic responsibilitieseffectively by working part-time and through flexibleworking hours.sustainability targets. These ambitions are further putinto action through the “Unilever Foundation”. The‘Unilever Foundation’ is a global Unilever function to driveour ambitious goals of helping one billion people improvetheir health and well-being and in turn, create asustainable and bright future with our global partners.Unilever Pakistan Foods works with both local and globalpartners in order to execute its sustainability agenda.The Unilever Sustainable Living Plan (USLP) sets out todecouple our growth from our environmental impact, whileat the same time increasing our positive social impact. Inorder to realize sustainable growth, sustainability isintegrated into our business strategy, brands andinnovation. We also work with our consumers, customersand suppliers, engaging employees and foster newpartnerships and collaborations to ensure a brightfuture for our business and future generations.During 2015, our main initiatives included:i. Energy Conservation:Unilever Pakistan Foods Limited (UPFL) is already acertified “WWF Green Office” member based on itssustainability initiatives through a structuredprogram of measuring, monitoring and reducingenergy, paper consumption, waste generation & CO2emission.A number of initiatives have been taken to conserveenergy. Some of these are:We focus continually on encouraging vitality and work-lifebalance among the employees. The Company has takenseveral initiatives in this regard e.g. vitality health passport,gym facility and healthy eating options available at theworkplace. All our efforts are directed towards ensuring that ourpeople remain committed and fulfilled, with the rightopportunities to develop themselves and build a brighterfuture with us! Corporate Social Responsibility (CSR)Unilever Pakistan Foods Limited works towardsestablishing high standards of corporate behaviour as ameans of ensuring long term success. The basis of this isformed by the Unilever Sustainable Living Plan, whichenables us to successfully achieve our ambitious08Unilever Pakistan Foods Limited Annual Report 2015 Replacement of motors with IE2 and IE3 energyefficient motors.Energy efficient air compressor helped site tobecome compliant with the Core-design for aircircuit while saving cost, energy and CO2 should befootprint.Ambient temperature measurement and monitoringto effectively switch ON/OFF AC units, as per needand reduce idle time cooling. Installation of FloorStanding AC units to avoid the need of central ACafter office hours.Single AC units are installed in various meetingrooms for agile working.Installation of solar water geyser for supplyinghot water.Installation of energy efficient steam traps inUPFL to boost condensate recovery by 15%.Replacement of tube lights with LED lights andenergy savers.
ii. Environmental Protection
Statement of Wealth Generated and Distributed 22 Pattern of Shareholding 23 Statement of Compliance with the Code of Corporate Governance 25 Auditors’ Review Report 26 Financial Statements 27 Notice of Annual General Meeting 69 Dividend Mandate Form 73 Form for Deduction of Tax on Dividend Income 75 Form of Proxy . 77 . Vision We work to create a better future every day. We help people feel .
