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Year at a glance.

Contents.

Rupees in ‘000 Net sales Cost of sales Gross profit Distribution and marketing expenses Administrative expenses Other operating expenses Other operating income Operating profit before reorganization/restructuring cost Reorganization/restructuring cost Operating profit after reorganization/restructuring cost Finance costs Profit before taxation Taxation Profit for the year Earnings per share – basic and diluted in Rupees Number of permanent employees at year end

2012 3,739,405 (2,785,235) 954,170 (231,066) (193,676) (33,811) 68,635 564,252 (204,572) 359,680 (44,266) 315,414 (39,125) 276,289 11.03 162

2011 3,044,800 (2,275,591) 769,209 (211,490) (171,376) (40,554) 58,850 404,639 – 404,639 (1,916) 402,723 (139,848) 262,875 10.50 262

06 07 08 09 10 12 15 16 17 18 20 22 23 26 30 35 36 40 42 44 83 84 86

About Linde Pakistan Company information Our vision Our mission Code of Ethics Business divisions, products and services Business Business locations Key facilities around Pakistan Ten-year financial review Vertical & horizontal analysis Key financial data Statement of value added Profile of Directors Directors‘ report Country Leadership Team (CLT) Corporate governance Statement of compliance with the Code of Corporate Governance Review report to the members on Statement of Compliance Financial Statements of the Company Shareholders‘ information Pattern of shareholdings Notice of Annual General Meeting Form of proxy

Turnover (Net) 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 2008 2009 2010 2011

Rupees in million

2012

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About Linde Pakistan.

Company information.

Linde Pakistan, a member of The Linde Group, is the leading Industrial Gases solution provider in Pakistan supporting the gases needs of a wide range of industries for more than 70 years. We have been delivering innovative, high quality and reliable services and solutions that create value for our customers since before the inception of Pakistan.

Board of Directors Munnawar Hamid – OBE Yousuf Husain Mirza Muhammad Ashraf Bawany Sanaullah Qureshi Towfiq Habib Chinoy Manzoor Ahmed Humayun Bashir Bernd Hugo Eulitz Siew Yap Wong Atif Riaz Bokhari Company Secretary & Deputy Managing Director Muhammad Ashraf Bawany Board Audit Committee Sanaullah Qureshi Chairman Member Member Member Member Secretary Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Assistant Company Secretary & Legal Manager (Appointed on 21 Jan. 2013) (Resigned on 25 Oct. 2012) Humayun Bashir Bernd Hugo Eulitz Siew Yap Wong Atif Riaz Bokhari Jamal A Qureshi Board Human Resource & Remuneration Committee Towfiq Habib Chinoy Yousuf Husain Mirza Bernd Hugo Eulitz Siew Yap Wong Manzoor Ahmed Muhammad Salim Sheikh Share Transfer Committee Yousuf Husain Mirza Muhammad Ashraf Bawany Wakil Ahmed Khan Chairman Member Secretary Chief Executive & Managing Director Executive Director – Deputy Managing Director Manager – Corporate Services Chairman Member Member Member Member Secretary Non-Executive Director Chief Executive & Managing Director Non-Executive Director Non-Executive Director Non-Executive Director Head of HR Non-Executive Chairman Chief Executive & Managing Director Executive Director – Deputy Managing Director & CFO Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director (Appointed on 21 Jan. 2013) (Resigned on 25 Oct. 2012)

We have continued to be a steady partner in the economic development of the country and have added strategic value to the nation’s industrial and infrastructure development. We manufacture and distribute industrial, medical and specialty gases as well as welding products and provide a wide range of related services including the installation of on-site plants, gas equipment, pipelines and associated engineering services. Our facilities include Air Separation plants in Lahore, Port Qasim and Taxila and Carbon Dioxide plants at Port Qasim and Multan. We have also installed Hydrogen and Dissolved Acetylene plants in the South and West regions to meet our customers’ demand nationwide. Our sales centres across Pakistan, nationwide network of production and distribution facilities and vast portfolio of products and solutions are capable and unmatched in the local industry.

Head office
Linde Pakistan Limited P. O. Box 4845, Dockyard Road, West Wharf, Karachi – 74000, Pakistan Phones +92.21.3231-3361 (9 lines) Fax +92.21.3231-2968 Customer Services P. O. Box 4845, Dockyard Road, West Wharf, Karachi – 74000, Pakistan Phones +92.21.3231-4259, +92.21.3231-6154 UAN +92.21.111-262-725 Fax +92.21.3231-2968 National Tax Number is 0709930-4 Company Registration Number is 000288

Bankers Standard Chartered Bank (Pakistan) Limited Deutsche Bank AG Citibank N.A. HSBC Bank Middle East Limited Barclays Bank Plc MCB Bank Limited National Bank of Pakistan Limited Meezan Bank Limited Registered office West Wharf, Dockyard Road, Karachi – 74000

Auditors KPMG Taseer Hadi & Co. Legal advisor Ayesha Hamid of Hamid Law Associates Website www.linde.pk www.linde.com Share registrar Central Depository Company of Pakistan Limited

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Our vision.
Linde Pakistan Limited (LPL) will be the leading industrial gases and hospital care Company, admired for its people, who provide innovative solutions that make a difference to the community.

Our mission.
To engage effectively, responsibly, and profitably in the industrial gases, healthcare and welding markets, LPL consistently seeks a high standard of performance, and aims to maintain a long-term leadership position in its competitive environment. This will be achieved through operating efficiency, continued dedication to serving our customers, cost effectiveness and behavioral conformance to our corporate values. The Company will be recognized in the community it operates in, as a safe and environmentally responsible organization. Our people will be acknowledged for their integrity and talent. The corporation acknowledges that commercial success and sustained profitable growth depends on the recruitment, development and retention of competent human resources. It will continue to invest in building this organisational capacity and capability. For shareholders, it protects their investment and provides an acceptable return. This is achieved through continued commercial success in winning new business and retaining existing customers. This is underpinned by the development and provision of new products and services to its customers, offering real value in price, quality, safety & environmental impact.

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Code of Ethics.

Mr Yousuf Husain Mirza, CEO & Managing Director (centre) and Mr M Ashraf Bawany, Deputy Managing Director (2nd from right) are in discussion with senior management team

The Linde Group is committed to integrity in all its business dealings. This is non-negotiable. Integrity is one of our four guiding principles. It is the fabric of our moral and ethical code, ensuring that we always act with honesty and fairness. The Linde Group has a comprehensive guide to the Linde Group’s expectations for integrity in the workplace or any other location while on company business. The Linde Code of Ethics is structured to reflect the expectations of our main stakeholder groups. Each Linde employee must learn and comply with the standards and laws that apply to their jobs. Linde actively monitors the standards set out in the code. Since the Linde Group Code of Ethics is a comprehensive document and is supported by appropriate procedures and integrity line, the Board of Directors of Linde Pakistan Limited adopted the Linde Group Code of Ethics in its 467th meeting held on 25 October 2012. All employees of Linde Pakistan Limited are required to undergo online training on the Code of Ethics. They are expected to comply with the standards laid out in the code and report deviations. Employees are encouraged to share and discuss the deviations with their line manager. However, where it is not possible to share or discuss a concern with a line manager then an employee can choose to raise his/her concerns via The Linde Group Integrity Line that can be accessed through the web-portal, phone, email, mail and fax. The Integrity Line is available to external stakeholders as well to raise legitimate issues. The Integrity Line is widely publicized across the company. Information on Code of Ethics can be found on our web site www.linde.pk/en/corporate_responsibility/ethics_compliance/ index.html and on company intranet site in English, Urdu and many other languages.

The Code of Ethics emphasizes uncompromising ethics and in particular provides guidance to all employees on: • Dealings with our customers, suppliers and markets encompassing competition, international trade, dealing with government, our products, ethical purchasing and advertising, • Dealings with our shareholders, financial reporting and communication, insider dealing, protecting company secrets and protecting company assets, • Dealings with our employees, conflicts of interest, avoidance of bribery, gifts and entertainment, data protection, SHEQ (Safety, health, environment and quality), human rights and on dealings with each other, • Dealings with communities and the public with regard to our corporate responsibilities and on restrictions to provide support for political activities.

Executives at work

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Business divisions, products and services.

The BOC Group Limited, U.K., the majority shareholder of Linde Pakistan Limited, is a wholly owned subsidiary of Linde AG, Germany. Accordingly, Linde AG is the ultimate parent company of Linde Pakistan Limited. The Linde Group is a world-leading gases and engineering company with around 62,000 employees in more than 100 countries worldwide. In the 2012 financial year, it generated revenue of EUR 15.280 bn. The strategy of the Group is geared towards long-term profitable growth and focuses on the expansion of its international business with forward-looking products and services.

Linde acts responsibly towards its shareholders, business partners, employees, society and the environment – in every one of its business areas, regions and locations across the globe. The Group is committed to technologies and products that unite the goals of customer value and sustainable development. For more information, see The Linde Group online at www.linde.com

In Pakistan our business and reputation is built around our customers. Whatever the industry or interest, we continue to respond to its needs as quickly and effectively as possible. The everchanging requirements of customers are the driving force behind the development of all our products, technologies and support services. Through our people, we play a full and active role in communities around us and are committed to the highest standards of safety and environmental practice. At the same time, we believe that the best way to assist any community is to build a successful business.

Industrial gases
Bulk gases → Liquid oxygen → Liquid nitrogen → Liquid argon → Pipeline hydrogen → Liquid carbon dioxide → Industrial pipelines PGP gases → Compressed oxygen → Aviation oxygen → Compressed nitrogen → Compressed argon → Compressed air → Compressed hydrogen → Dissolved acetylene → Compressed carbon dioxide → Dry ice Specialty gases → High purity gases → Research grade gases → Gaseous chemicals → Calibration mixtures → Argon mixtures → Welding gas mixtures → Sterilisation gases → Propane → Helium → Refrigerants

Healthcare
Medical gases → Liquid medical oxygen → Compressed medical oxygen → Nitrous oxide and ENTONOX® → Specialty medical gases and mixtures e.g. helium, carbon dioxide, heliox etc. Medical equipment → High precision flowmeters → Suction injector units and oxygen therapy products → ENTONOX® delivery systems, complete with apparatus, regulators, cylinders Medical engineering services → Complete range of medical Gas pipeline systems → Consultation design, installation and servicing of medical gas pipeline systems → Safety, quality, risk analysis and training on medical gas pipeline systems

Welding and others
Welding consumables → Welding electrodes → MIG welding wires Welding machines → Automatic → Semi-automatic → Manual Welding accessories → Regulators → Cutting torches → Welding torches → Cutting machines → Gas control equipment → Safety equipment PGP – others → Calcium carbide

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Business.

Linde Pakistan Limited (LPL) proudly serves more than 4,259 customers from diverse industrial and healthcare sectors. We act as strategic solution providers to our customers, providing value through our innovative products and services and using best operating practices from across The Linde Group. LPL business portfolio is strategically divided into four segments which are Tonnage, Bulk, Packaged Gases & Products (PGP) and Healthcare.

Tonnage Business
Tonnage customers are provided with the product through pipeline supply schemes and on-site production units. In addition to catering to normal business activities, we ensure logistical and production capability to support extra demand due to turnaround at customer end.

PGP
Packaged Gases and Products (PGP) cover a wide range of products which include compressed industrial gases, speciality gases, welding consumables and equipments. PGP is characterized by a diversified portfolio of customers nationwide from quality control labs to pharmaceutical companies and from ship-breaking to construction industry.

Bulk
Bulk customers are those to whom the product is supplied through road tankers in liquid form and is stored in storage tanks installed at their sites. The bulk product line includes oxygen, nitrogen, argon and carbon dioxide. LPL is actively involved in delivering products and solutions to a wide array of customers in industrial sectors such as chemical, steel, glass, oil & gas, ship-breaking, distributors and food & beverage.

Healthcare
For decades, LPL has been the most trusted and reliable partner with hospitals, across the country. The healthcare portfolio includes a variety of products including Medical Gases such as medical oxygen – liquid and compressed, nitrous oxide, special medical mixtures and medical equipment such as concentrators and flowmeters, etc. LPL also provides the design, installation and maintenance of central medical gases pipeline systems.

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Business locations.

Key facilities around Pakistan.

Registered office/head office
Karachi P.O. Box 4845, West Wharf Phones +92.21.32313361 (9 lines) Fax +92.21.32312968 Wah Cantonment Kabul Road Phone +92.51.4545359 Taxila Adjacent to HMC No.2 Phones +92.51.4560701 (5 lines) & 4560600 Fax +92.51.4560700 Rawalpindi 2nd Floor, Jahangir Multiplex Golra Mor, Peshawar Road Phones +92.51.2315501-03 Fax +92.51.2315050 Hassan Abdal Adjacent to Air Weapon Complex Abbotabad Road Phones +92.572.520017 (Ext. 104) & 522428 (Ext. 104) Acetylene plant

ASU plant Peshawar Sales office

North western region
Lahore P.O. Box 205 Shalamar Link Road, Moghalpura Phones +92.42.36824091 (4 lines) Fax +92.42.36817573 Plot No. 705, Sundar Industrial Estate Phones +92.42.35297244-47 Multan Adjacent to PFL Khanewal Road Phones +92.61.6562201 & +92.61.6001360 (2 lines) Fax +92.61.6778401 Mehmood Kot Adjacent to PARCO Mid Country Refinery, Mehmood Kot Qasba Gujrat, Muzaffargarh Phones +92.66.2290751 & 2290484-85 Fax +92.66.2290752 Faisalabad Altaf Ganj Chowk Near Usman Flour Mills Jhang Road Phones +92.41.2653463 & 2650564 ASU plant Nitrous oxide plant

Taxila

Rawalpindi Faisalabad

ASU plant

Hydrogen plant Multan Mahmood Kot Sukkur

Lahore

Carbon dioxide plant

Nitrogen plant

Southern region
Karachi P.O. Box 4845, West Wharf Phones +92.21.32313361 (9 lines) Fax +92.21.32312968 Port Qasim Plot EZ/1/P – 5 (SP – 1), Eastern Zone Phones +92.21.34740058 & 34740060 Fax +92.21.34740059 Sukkur A-15, Airport Road, Near Bhatti Hospital Phone +92.71.5630871 Acetylene plant Electrode factory Specialty gases

Sales depot

ASU plant Hydrogen plant Carbon dioxide plant Dry ice plant Sales depot

Port Qasim Karachi

Sales offices Karachi Sukkur Multan Lahore Faisalabad Taxila Peshawar Rawalpindi Plants 100 TPD ASU Port Qasim 23 TPD CO₂ Port Qasim 150 & 44 TPD ASUs Lahore 30 TPD ASU Taxila 60 TPD CO₂ Multan 10 TPD N₂ Mahmood Kot Electrode, Dissolved Acetylene Karachi Company owned Compressing stations

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Ten-year financial review.

Rupees in ’000 Operating Results Sales Gross Profit Profit from Operations Profit before Taxation Taxation Profit after Taxation Dividends Capital Employed Paid-up Capital Reserves and Unappropriated Profits Shareholders' Fund Deferred Liabilities Long-term Liabilities & Borrowings (net of cash)

2003 1,386,235 585,113 437,480 403,593 (39,628) 363,965 300,464

2004 1,521,649 679,848 444,374 429,823 (97,784) 332,039 325,503

2005 1,752,399 735,383 518,285 502,159 (132,235) 369,924 300,464

15 months ended 31 December (Restated)

2006

2007 2,174,515 934,021 685,866 682,370 (223,321) 459,049 325,503

2008 2,453,341 835,647 550,395 547,693 (145,587) 402,106 325,503

2009 2,307,741 710,989 491,609* 374,284 (122,672) 251,612 225,349

2010 2,530,022 686,774 413,224* 375,026 (131,201) 243,825 150,232

2011 3,044,800 769,209 404,639 402,723 (139,848) 262,875 175,271

2012 3,739,405 954,170 564,252* 315,414 (39,125) 276,289 175,271

2,299,531 910,212 667,598 598,037 (130,073) 467,964 375,581

250,387 661,628 912,015 215,738 61,969 1,189,722

250,387 768,319 1,018,706 245,944 15,970 1,280,620

250,387 812,740 1,063,127 249,857 (68,937) 1,244,047

250,387 1,094,681 1,345,068 278,811 (188,117) 1,435,762

250,387 1,175,745 1,426,132 277,175 (442,534) 1,260,773

250,387 1,257,040 1,507,427 229,124 (221,477) 1,515,074

250,387 1,202,319 1,452,706 202,034 (384,745) 1,269,995

250,387 1,240,743 1,491,130 195,281 (355,569) 1,330,842

250,387 1,331,291 1,581,678 167,315 204,329 1,953,322

250,387 1,428,510 1,678,897 204,192 538,037 2,421,126

Represented by Non – Current Assets Working Capital 1,292,781 (103,059) 1,189,722 Statistics Expenditure on Fixed Assets Annual Depreciation & Amortisation Earnings per share – Rupees Dividend per share-Rupees (Note 1) Dividend Cover – Times (Note 1) Net Asset Backing per share – Rupees Return on average Shareholders‘ Fund (based on profit after tax) Dividend on average Shareholders' Fund (Note 1) Return on average Capital Employed (based on profit before financial charges & tax) Price/Earning Ratio Dividend Yield ratio (Note 1) Dividend Payout ratio (Note 1) Fixed Assets/Turnover Ratio Debt/Equity Ratio Current ratio Interest Cover – Times Debtors turnover Ratio Gross Profit Ratio (as percentage of Turnover) Market Value per Share at year end – Rupees 109,304 122,496 14.54 12.00 1.21x 36.42 43.51 % 35.92 % 36.90 % 10.39 7.95 % 82.55 % 1.09 23:77 1.38 12.91x 19.07 42.21 % 151.00 201,122 126,441 13.26 13.00 1.02x 40.69 34.40 % 33.72 % 35.98 % 11.16 8.79 % 98.03 % 1.13 16:84 0.96 30.54 x 18.36 44.68 % 147.95 69,321 138,780 14.77 12.00 1.23x 42.46 35.54 % 28.87 % 41.06 % 10.66 7.62 % 81.22 % 1.39 9:91 1.21 32.14x 16.87 41.96 % 157.55 1,367,864 (87,244) 1,280,620 1,321,234 (77,187) 1,244,047

1,313,880 121,882 1,435,762

1,190,726 70,047 1,260,773

1,380,166 134,908 1,515,074

1,276,004 (6,009) 1,269,995

1,342,471 (11,629) 1,330,842

2,075,442 (122,120) 1,953,322

2,631,493 (210,367) 2,421,126

89,435 144,801 18.69 15.00 1.25x 53.72 38.86 % 31.19 % 45.60 % 7.55 10.63 % 80.26 % 2.46 1:99 1.88 48.23x 15.92 39.58 % 141.15

66,561 139,319 18.33 13.00 1.41x 56.96 33.13 % 23.49 % 50.87 % 13.78 5.14 % 70.91 % 2.53 0:100 2.31 196.19x 14.57 42.95 % 252.70

417,354 148,817 16.06 13.00 1.24 x 60.20 27.41 % 22.19 % 39.66 % 7.03 11.52 % 80.95 % 2.17 0:100 2.01 203.70x 17.15 34.06 % 112.82

123,421 171,647 10.05 9.00 1.12 x 58.02 17.00 % 15.23 % 27.03 % 12.73 7.03 % 89.55 % 2.17 0:100 1.91 177.13x 14.86 30.81 % 127.95

311,453 177,492 9.74 6.00 1.62x 59.55 16.57 % 10.21 % 29.01 % 9.36 6.59 % 61.61 % 2.03 0:100 1.81 171.62x 15.72 27.14 % 91.10

991,470 204,304 10.50 7.00 1.50x 63.17 17.11 % 11.41 % 24.64 % 9.62 6.93 % 66.67 % 1.5 11:89 1.00 211.19x 18.71 25.26 % 101.00

839,481 268,203 11.03 7.00 1.58x 67.05 16.95 % 10.75 % 16.44 % 13.91 4.56 % 63.44 % 1.44 31:69 1.17 8.13x 20.78 25.52 % 153.49

Note 1 includes proposed final dividend declared subsequent to the year – end * Profit from operations represents operating profit before reorganization/restructuring cost

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Profit and loss account. Vertical and horizontal analysis.

Balance sheet. Vertical and horizontal analysis.

Rupees in ’000 Net sales Cost of sales Gross profit Distribution and marketing expenses Administrative expenses Other operating expenses Other operating income Operating profit before Reorganization/restructuring cost Reorganization/restructuring cost Operating profit after Reorganization/ restructuring cost Finance costs Profit before tax Taxation Profit for the year Vertical Analysis – percentage % of sales Net sales Cost of sales Gross profit Distribution and marketing expenses Administrative expenses Other operating expenses Other operating income Operating profit before Reorganization/restructuring cost Reorganization/restructuring cost Operating profit after Reorganization/restructuring cost Finance costs Profit before tax Taxation Profit for the year Horizontal Analysis – year on year (Percentage increase/(decrease) over preceeding year) Net sales Cost of sales Gross profit Distribution and marketing expenses Administrative expenses Other operating expenses Other operating income Operating profit before Reorganization /restructuring cost Reorganization/restructuring cost Operating profit after Reorganization /restructuring cost Finance costs Profit before tax Taxation Profit for the year

2012 3,739,405 (2,785,235) 954,170 (231,066) (193,676) (33,811) 68,635 564,252 (204,572) 359,680 (44,266) 315,414 (39,125) 276,289

2011 3,044,800 (2,275,591) 769,209 (211,490) (171,376) (40,554) 58,850 404,639 – 404,639 (1,916) 402,723 (139,848) 262,875

2010 2,530,022 (1,843,248) 686,774 (195,134) (149,054) (52,576) 123,214 413,224 (36,000) 377,224 (2,198) 375,026 (131,201) 243,825

2009 2,307,741 (1,596,752) 710,989 (152,785) (132,727) (99,612) 165,744 491,609 (115,200) 376,409 (2,125) 374,284 (122,672) 251,612

2008 2,453,341 (1,617,694) 835,647 (158,681) (130,094) (54,948) 58,471 550,395 – 550,395 (2,702) 547,693 (145,587) 402,106

2007 2,174,515 (1,240,494) 934,021 (146,869) (118,702) (58,485) 75,901 685,866 – 685,866 (3,496) 682,370 (223,321) 459,049

Rupees in ‛000 Equity and liabilities Total equity Total non-current liabilities Total current liabilities Total equity and liabilities Assets Total non-current assets Total current assets Total assets Vertical analysis Equity and liabilities Total equity Total non-current liabilities Total current liabilities Total equity and liabilities

2012

2011

2010

2009

2008

2007

1,678,897

1,095,778

1,581,678

3,638,491

863,816

2,771,633

692,760

497,195

1,491,130

2,387,235

578,329

317,776

1,452,706

2,315,949

545,644

317,599

1,507,427

2,312,300

462,748

342,125

1,426,132

2,279,012

471,324

381,556

3,638,491

1,006,998

2,631,493

2,075,442 2,771,633

696,191

2,387,235

1,044,764

1,342,471

1,276,004 2,315,949 1,039,945

1,380,166 2,312,300 932,134

2,279,012

1,088,286

1,190,726

46 30 100 24

57 18 100 25

63 13 100 24

63 14 100 23

65 15 100 20

62 17 100 21

100 (74) 26 (6) (5) (1) 2 16 (5) 11 (1) 10 (1) 9

100 (75) 25 (7) (6) (1) 2 13 0 13 0 13 (5) 8

100 (73) 27 (8) (6) (2) 5 16 (1) 15 0 15 (5) 10

100 (69) 31 (7) (6) (4) 7 21 (5) 16 0 16 (5) 11

100 (66) 34 (6) (5 (2) 2 23 0 23 0 23 (6) 17

100 (57) 43 (7) (5) (3) 3 31 0 31 0 31 (10) 21

Assets Total non-current assets Total current assets Total assets Horizontal analysis – year on year (Percentage increase/(decrease) over preceeding year) Equity and liabilities Total equity Total non-current liabilities Total current liabilities Total equity and liabilities Assets Total non-current assets Total current assets Total assets

72 100 28

75 100 25

56 100 44

55 100 45

60 100 40

52 100 48

6 120 25 31 27 45 31

6 56 20 16 55 (33) 16

3 0 6 3 5 0 3

(4) (7) 18 0 (8) 12 0

6 (10) (2) 1 16 (14) 1

23 22 24 9 13 (17) 17 39 100 (11) 2210 (22) (72) 5

20 23 12 8 15 (23) (52) (2) (100) 7 (13) 7 7 8

10 15 (3) 28 12 (47) (26) (16) (69) 0 3 0 7 (3)

(6) (1) (15) (4) 2 81 183 (11) 100 (32) (21) (32) (16) (37)

13 30 (11) 8 10 (6) (23) (20) 0 (20) (23) (20) (35) (12)

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Key financial data.
Turnover (Net) and average capital employed (Rupees in million)
Turnover 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 2008 2009 2010 2011 2012 400 350 300 250 200 150 100 50 0 2008 2009 2010 2011 2012 Capital employed

Statement of value added during 2012.
Paid-up capital and cash dividend (Rupees in million)
Paid-up capital Cash dividend

The statement below shows the amount of wealth generated by the Company employees and its assets during the year and the way this wealth has been distributed:

Rupees in ‘000 Wealth generated Total revenue (net of sales tax) Bought-in-material & services

2012 3,808,040 (2,504,577) 1,303,463

2011 3,103,650 (2,057,275) 1,046,375

Wealth distributed To employees Salaries, wages and benefits Reorganization/restructuring cost 351,850 204,572 556,422 To government Income tax on profit, Workers’ funds, Import duties (exclusive of capital items) and un-adjustable Sales Tax 158,283 239,959 337,321 – 337,321

Shareholders’ fund (Rupees in million)

Break up value and EPS (Rupees)
Net asset backing per share Earnings per share

To providers of capital Cash dividends to shareholders * To Lenders Finance cost Retained in the Business Represented by depreciation and transfer to general reserve for replacement of fixed assets
* Includes proposed final dividend declared subsequent to year end

175,271

175,271

1,700 1,600 1,550 1,500 1,450 1,400 1,350 1300 2008 2009 2010 2011 1,507 1,452 1,582

1,679

70 60 50

44,266

1,916

1,491

369,221 1,303,463

291,908 1,046,375

40 30 20 10 2012 0 2008 2009 2010 2011 2012

Capital expenditure (Rupees in million)
1,000 900 800 700 600 500 400 300 200 100 0 2008 123 2009 2010 2011 2012 417 311 991 839

Application of revenue 2012 (Rupees in million)
4,000 3,800 3,600 3,400 3,200 3,000 2,800 2,600 2,400 2,200 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0

Wealth generated and distributed 2012
Net Retention To Lenders To Government

Wealth generated and distributed 2011
To Employees To Shareholders

Total Revenue Cost of Sales Distribution/Marketing, Other Operating Expenses & Finance Cost Taxation
13 % 1% 5% 8%

13.4 % 28.3 %

16.8 % 27.9 %

Revenue Rs. 3,808

73 %

Transfer to Reserve Dividend

3.4 % 42.7 % 32.2 % 12.1 %

0.2 %

22.9 %

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Directors standing from left to right: Mr Towfiq Habib Chinoy, Mr Yousuf Husain Mirza (CEO & Managing Director), Mr M Ashraf Bawany (Deputy Managing Director), Mr Manzoor Ahmed, Mr Sanaullah Qureshi and Mr Atif Riaz Bokhari

Directors sitting from left to right: Mr Bernd Hugo Eulitz, Mr Munnawar Hamid – OBE (Chairman) and Mr Siew Yap Wong

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Profile of Directors.

Munnawar Hamid – OBE
Chairman Mr Munnawar Hamid is the former Chairman and Chief Executive of the ICI Group in Pakistan, and was with the Group since his graduation from the Universities of Punjab (Government College Lahore) and Cambridge (Gonville & Caius College) and subsequently Advanced Management training at INSEAD. He retired in 2003 after nearly 35 years association with ICI including a concluding year as Advisor to the Group CEO in London. He was, also formerly, the founding Chairman of the Intellectual Property Organization Pakistan, (the apex body governing intellectual property rights in Pakistan) and the Pak Britain Business Forum, as well as Chairman of International General Insurance (IGI) Ltd, Pakistan PTA Ltd (now Lotte PTA), the President of the Overseas Investors Chamber of Commerce and Industry, and Chairman of the Duke of Edinburgh Award in Pakistan. He has also served on the Boards of the Civil Aviation Authority, Port Qasim Authority, the Public Procurement Regulatory Authority and the Policy Board of the Securities & Exchange Commission of the Government of Pakistan; as well as of Standard Chartered Bank, United Bank, Union Bank, and the Oil & Gas Development Corporation. He has been involved in high-level government consultative bodies including the Government’s Economic Advisory Board between 1999/2002, and has chaired the Prime Minister’s Committee on Chemical Industry in Pakistan and other committees between 1996/1998. Mr Munnawar Hamid was appointed OBE by Her Majesty the Queen in October 1997. In addition to being the Chairman of Linde Pakistan Limited since January 2002, he also holds office in the following organizations: Silk Bank Limited Human Resource and Compensation Committee of the Board, Silk Bank Limited Huntsman TE, Singapore The Aga Khan University The Aga Khan University Provident Fund The Aga Khan University Gratuity Fund Physical Plant & Infrastructure Committee of the Aga Khan University Board of Trustees Audit Committee, HR Committee and Resource Development Committee of the Aga Khan University Board of Trustees Chairman Chairman Advisor/Consultant Trustee Trustee Trustee Chairman

Sanaullah Qureshi
Director Mr Sanaullah Qureshi has been associated with Linde Pakistan Limited as a Director since 31 January 1996 and also holds office of the Chairman, Board Audit Committee. Mr Qureshi qualified as a Chartered Accountant from Scotland and joined ICI Pakistan Limited in 1962. He has worked in various leadership capacities at ICI including General Manager and Director-in-charge of Finance and Human Resources. He retired as the Deputy Chairman of ICI Pakistan in 1993 and joined as CEO of Forbes Forbes Campbell & Co. Limited, an established group in shipping, trading and manufacturing activities. After retiring from Forbes in 1995, Mr Qureshi is now acting in advisory capacity to Captain-PQ Chemicals Industries Limited. He was also the President of the Management Association of Pakistan, Chairman of Gillette Pakistan Limited and non-executive Director of Faysal Bank Limited, Sui Southern Gas Company Limited and Atlas Bank Limited. Currently he holds office in the following companies/entities: Atlas Honda Limited ICI Pakistan Staff Pension Fund MYK Associates (Pvt) Ltd Board Audit Committee, Atlas Honda Limited Director Trustee Director Chairman Currently Mr Chinoy also holds office in the following organizations: International Steels Ltd. Jubilee General Insurance Co. Ltd. Packages Limited HBL Asset Management Ltd. Jubilee Life Insurance Company Ltd. IGI Investment Bank Limited Mohatta Palace Gallery Trust Indus Valley School of Art and Architecture Chief Executive Chairman Chairman Director Director Director Trustee Governor

Siew Yap Wong
Director Mr Siew Yap Wong joined the Linde Pakistan Board of Directors on 10 February 2012 after being appointed the Cluster Head of Malaysia and Pakistan, responsible for the business for both countries. He is currently the Managing Director of Linde Malaysia Holdings Berhad group of companies. He started his career with Linde Malaysia in 1982 in welding operations, and has held various strategic positions covering planning, sales, business, marketing and strategic development. Mr Wong holds an engineering degree from the University of Southampton, an MSc. in Welding Technology from Cranfield Institute of Technology, an MBA from the Cranfield School of Management and a Certified Diploma in Accounting & Finance from ACCA. He is also a member of the Institution of Engineers, Malaysia and a Senior Member of the Welding Institute, United Kingdom. Besides serving as Board Member of the following companies, Mr Wong is also the Council Member of the Federation of Malaysian Manufacturers as well as Chairman of FMM Institute: Linde Malaysia Holdings Berhad Linde Malaysia Sdn Bhd Linde Welding Products Sdn Bhd Eastern Oxygen Industries Sdn Bhd Linde Industrial Gases (Malaysia) Sdn Bhd Industrial Gases Solutions Sdn Bhd Kulim Industrial Gases Sdn Bhd Dayamox Sdn Bhd Linde Gas Products (Malaysia) Sdn Bhd Linde Engineering Sdn Bhd Managing Director Managing Director Managing Director Managing Director Director Chairman Chairman Managing Director Director Director

Manzoor Ahmed
Director Mr Manzoor Ahmed joined Linde Pakistan Limited as a Director on 14 July 2010. He is Chief Operating Officer and currently managing investment portfolio of NIT worth over Rs. 75 billion. He has experience of over 23 years of the Mutual Fund industry. He is MBA and also holds D.A.I.B.P. At present, he is a candidate for CFA Level III. Mr Ahmed has attended various training courses organized locally and internationally. Mr Ahmed is a certified Director from Pakistan Institute of Corporate Governance. He represents NITL as Nominee Director on the Board of Directors of following companies: Soneri Bank Limited Millat Tractors Limited Service Industries Limited Mari Gas Co. Limited General Tyre and Rubber Co. Limited Nishat (Chunian) Limited Bannu Woollen Mills Limited Lotte Pakistan PTA Limited Director Director Director Director Director Director Director Director

Towfiq Habib Chinoy
Director Mr Towfiq Habib Chinoy has been associated with Linde Pakistan Limited as a Director since 30 January 2002 and also holds office of the Chairman, Board Human Resource & Remuneration Committee. Having completed his Higher National Certificate in Mechanical Engineering from Luton & South Bedfordshire College of Engineering, Mr Chinoy undertook his engineering apprenticeship at Vauxhall Motors. He joined International Industries Ltd (IIL) in 1964 and was appointed Managing Director in 1976. He was the driving force behind the growth of IIL as Pakistan’s largest pipe and tube manufacturer. He is currently the Managing Director of International Steels Limited (ISL), a subsidiary of IIL. Mr Chinoy has served as a member of the Engineering Development Board, the Advisory Board of Ports and Shipping Sector, Ministry of Communications and as a Director on the Board of Port Qasim Authority, National Refinery Limited and The Pakistan Business Council.

Member

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Atif Riaz Bokhari
Director Mr Atif Riaz Bokhari joined the Linde Pakistan Board of Directors on 21 January 2013. Mr Bokhari, currently President & CEO, United Bank Limited (UBL), is a career banker with extensive experience in domestic and international banking. He started his banking career in 1985 with Bank of America, where he handled diverse assignments over 15 years. Subsequent to leaving Bank of America in July 2000, Mr Bokhari joined Habib Bank Limited wherein he was Head of Corporate and Investing Banking. Mr Bokhari was appointed as President & CEO of UBL in May 2004 (18 months after privatization). Since then UBL has ventured into new diversified business and revenue streams namely Consumer Financing, E-commerce, Branchless Banking, Asset Management and general insurance. Mr Bokhari holds the office of Chairman or Director in several UBL Group companies. Mr Bokhari is very actively involved with a private sector program for the development of education in Karachi. Specifically he is a founding Director of the Karachi School for Business & Leadership affiliated with the Judge Business School, Cambridge, UK. Additionally, he holds office in the following companies/entities: United Bank Limited United Bank A.G. Zurich, Switzerland United Executors & Trustees Co. Ltd. United National Bank Limited, UK Karachi Education Initiative Institute of Bankers Pakistan Pakistan Banks Association President & CEO Chairman Chairman Director Director Vice President Vice Chairman

Bernd Eulitz
Director Mr Bernd Eulitz is the Regional Business Unit Head responsible for Linde’s gases business in South & East Asia, based in Singapore. He oversees Linde’s business in 11 countries in Asia – Bangladesh, India, Indonesia, South Korea, Malaysia, Pakistan, Philippines, Singapore, Sri Lanka, Thailand and Vietnam. He joined the Linde Pakistan Board of Directors on 10 February 2012. Mr Eulitz has a master’s degree in process engineering from the University of Karlsruhe, Germany. He joined Linde AG in Germany in 2004 as Head of Sales Region East, where he was responsible for sales and applications technology in the East German region. During his 4 years at Linde AG, he was responsible for the growth of the East German business and a broad range of projects for The Linde Group. In April 2008, Mr Eulitz was appointed Chief Executive Officer of PanGas AG, The Linde Group’s unit in Switzerland, responsible for the industrial and medical products business. In October 2011, Mr Eulitz moved to Singapore to take up his new appointment as Regional Business Unit Head for South & East Asia. Prior to his career in Linde, Mr Eulitz spent 5 years in the gas industry in Germany, in sales engineering and logistics roles, and another 4 years in consulting work at A. T. Kearney in Germany, UK and France. Additionally, he also serves on the Board of the following companies: Linde Gas Asia Pte Ltd Linde Gas Singapore Pte Ltd Linde Malaysia Holdings Berhad Linde (Thailand) Public Company Limited Linde Bangladesh Limited Linde Philippines Limited Linde Gas Vietnam Pte Ltd. Ceylon Oxygen Ltd. Director Director Director Director Director Director Director Director

Muhammad Ashraf Bawany
Director Mr Bawany is an Executive Director on the Board of Linde Pakistan Limited. He currently also holds offices of the Deputy Managing Director and Chief Financial Officer in the Company. He has been associated with the Company for more than 28 years in various leadership roles. Mr Bawany has been responsible for successfully executing several local and regional initiatives and in recognition of his exemplary performance, he was declared “Team Champion” in addition to several other significant local and regional awards. Mr Bawany takes keen interest in the promotion of education, trade and industry and strongly advocates for this cause through various platforms of professional, corporate and trade bodies in the country. He has also been President of Institute of Cost & Management Accountants of Pakistan (ICMAP), Pakistan Institute of Public Finance Accountants (PIPFA) and Memon Professional Forum (MPF). Mr Bawany is a Certified Director from Pakistan Institute of Corporate Governance. In addition to being a fellow member of the Institute of Cost & Management Accountants of Pakistan and Institute of Corporate Secretaries of Pakistan, he is also a law graduate. Presently he holds offices in various organizations and institutions as follows: National Clearing Company of Pakistan Limited BOC Pakistan (Private) Limited Aziz Tabba Foundation Welfare Committee Tabba Heart Institute Welfare Committee Aziz Tabba Kidney Centre Welfare Committee National Council/Committees/Foundation – ICMAP All Pakistan Memon Federation – Education Board Strategic Advisory Board – Memon Professional Forum Share Transfer Committee, Linde Pakistan Limited Director Director Member Member Member Member Member Member Member

Yousuf Husain Mirza
Chief Executive Mr Yousuf Husain Mirza has been the Chief Executive Officer and Managing Director of Linde Pakistan Limited (LPL) since 27 October 2010. Mr Mirza has a long and illustrious association with the Linde Group and before being appointed as MD of the Pakistan business, he held a number of prominent positions within the Group in various countries of the South East Asia region. He joined Linde Pakistan in 1992 as an Engineer fresh from NED University and became the Plant Manager of LPL’s Port Qasim plant in 1998, a position he held till 2002. In the next 8 years Mr Mirza has held senior leadership positions at Linde subsidiaries in Philippines and Malaysia and was the Head of SHEQ, South & East Asia providing leadership in delivering Safety, Health, Environment and Quality agenda across 11 countries. Mr Mirza returned to LPL as Vice President-Gases in April 2010, responsible for Operations, Distribution & CES, SHEQ, Procurement, Marketing and Tonnage Sales. Mr Mirza has also completed his Masters of Business Administration from the Institute of Business Administration (IBA), Karachi along with numerous professional training courses at prestigious institutes such as Nanyang Technological University, Singapore; University of Surrey; INSEAD, and Said Business School, University of Oxford. Additionally, he holds following offices: Pakistan German Business Forum BOC Pakistan (Private) Limited Share Transfer Committee of Linde Pakistan Limited Human Resource & Remuneration Committee of Linde Pakistan Limited Director Chairman & CEO Chairman Member

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Directors’ report.

Net sales (Rupees in million)
4,000 3,000 2,000 1,000 0 2,453 2,308 2,530 3,045 3,739

Operating profits (Rupees in million)
600 500 400 300 200 100 0 550 564 413 405

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2009

2010

2011

2012

2008

2009

2010

2011

2012

The Directors of your Company take pleasure in presenting the Annual Report together with the Company’s audited financial statements for the year ended 31 December 2012.

National economy
According to the latest Annual Report of State Bank of Pakistan, the national economy witnessed a modest improvement in 2012, and registered a GDP growth of 3.7 % compared to 3.0 % last year, but still missed the target of 4.2 % due to energy shortages, unstable law & order situation, security concerns and the persisting aftermath of floods in the preceding years. Pakistan’s budget deficit reached 8.5 % of GDP mainly as a result of settlement of circular debt, losses stemming from public sector enterprises, higher interest payments, unabated Government borrowing and spending, and a continuing decline in revenue collection. Despite the reduction in interest rates overall monetary expansion decelerated in 2012, largely due to the deterioration of the external account which is now supported only by overseas Pakistani remittances as all other inflows have virtually dried up due to political uncertainty and insecurity. Although, remittances posted yet another year of strong growth, which not only helped narrow the current account deficit but also contributed to economic activity, and actual inflation of 11.1 % was lower than the annual target of 12 %, the rupee recorded a significant 9.1 % depreciation against the dollar during the year. Against this background a GDP growth target of 4.3 % for 2013 appears optimistic.

Depreciation and Insurance costs have gone up due to additional insurance cover for the new ASU at Lahore which along with the greater volume purchase of finished product resulted in an increase in cost of sales of 22.4 %. Despite these increases, operating profit before reorganization/ restructuring cost stood at Rs. 564.2 million, an improvement of 39.4 % over the previous year. In order to contain operating costs and improve productivity in the longer term, the Company has reorganized and restructured during the year necessitating a Voluntary Separation Scheme for employees at all levels of the organization. The cost of the scheme amounting to Rs. 204.6 million has been recognized in the annexed accounts. As a result, though operating profit has reduced to Rs. 359.7 million in 2012 compared to Rs. 404.6 million in the previous year, a relatively short payback period of 3.5 years of this cost and the expected productivity gains will ensure a more robust profitability of the Company in future. Finally, though the finance charge at Rs. 44.3 million has gone up compared to last year due to the long term financing obtained for the new Lahore ASU Plant, capitalization of this plant has resulted in a substantial tax benefit and therefore profit after tax at Rs. 276.3 million and EPS of Rs. 11.03 remain 5.0 % higher compared to the previous year.

Engineering operations
During 2012, all Linde plants operated efficiently, despite the challenges of an adverse energy situation which impacted ASU operations nationally and Carbon Dioxide production at Multan. The company launched the six sigma program in Carbon Dioxide production at Port Qasim, which has resulted in significant improvement in efficiency and production. Both Carbon Dioxide facilities were certified for FSSC 22000 (Food Safety standards certification) whereas all major production facilities maintained their ISO 9002 quality management system certifications.

Financial risk management
Overall risk exposure associated with the Company’s financial assets and liabilities is very limited. The Company believes that it is not exposed to any major concentration of credit risk, exposure to which is managed through application of credit limits to its customers. The Company manages its exposure to financial risks as explained in note 35 to the financial statements.

Contribution to national exchequer
Information with respect to Company’s contribution towards the National Exchequer has been provided in the statement of value added appearing in this Report on page 23.

Projects
The following two projects are aimed at ensuring growth, increased productivity and improve customer service. Your company recently announced an investment of Rs. 556 million for the installation of a captive power generation plant at its Port Qasim facility. The Initial Environment Examination (IEE) for the project has been completed and the major equipment supplier has been selected. The project when completed will bring enhanced efficiency, reliability and product availability. With the commissioning of the latest ASU in Lahore, your Company has decided to relocate the existing plant at Taxila to its Port Qasim site to support increased demand and serve customers more reliably in the southern region and save significant trunking costs. The relocated plant is expected to commence commercial production at Port Qasim by June 2013.

Information Systems (IS)
Company has initiated a project to migrate from the existing SAP system to a standard regional SAP template. The new system leverages the best operating processes and systems from across the Linde Group and will go live in early 2013.

Sales
Industrial and medical gases As stated earlier, the severe energy crisis gripping the country impacted your company as well. This, however, was mitigated by effective product management, productivity and efficiency initiatives and renewed focus on customer service levels. Your company’s relationship with its major customers was further reinforced and the successful commissioning of the new ASU at Lahore enhanced overall capability of the Company to service its market effectively. Your company also maintained a strong focus on the Packaged Gas Products (PGP) business, established itself as a significant player in the Dry Ice business, and benefitted from the strong demand from other industrial sectors like metals, petrochemicals, glass, and food and beverages. As a result, it was able to register an impressive growth of 20 % in this sector over the last year and increase market share. Welding and others The sale of welding electrodes was 47 % higher over the last year despite slow activity in the manufacturing sector and rising input costs. This was achieved through addition of new customers, capturing opportunity in all available new projects, and an improved and efficient supply chain.

Safety, Health, Environment and Quality (SHEQ)
Safety, Health, Environment and Quality (SHEQ) continues to be at the heart of every activity of the company. During the year, a new safety policy was launched emphasizing renewed commitment to safety, and the Company continued to maintain an excellent safety record with no lost time incident or a transport safety accident.

Company’s performance – overall
The Directors are pleased to inform you that your Company maintained a positive growth trend throughout 2012, despite its various challenges. The Company inaugurated Pakistan’s largest state-of-the-art Air Separation Unit (ASU) at Sundar Industrial Estate, Lahore, with a capacity of upto 150 tons per day, which is operating satisfactorily. In addition, strong demand from ship-breaking sector coupled with increase in turnover of hard goods and Carbon Dioxide (CO₂), and a broadening customer base in the healthcare segment continued to enable a strong growth in turnover of 22.3 %, as compared to last year, to reach a gross sales of Rs. 4.3 billion. Cost of goods manufactured went up by 16.3 %, mainly as a result of significantly enhanced energy prices and the need for increased product trunking to the Southern market from the North.

Cash flow management
The Company utilized its cash resources very efficiently and diligently managed working capital. As a result, despite a substantial spending on capital projects amounting to Rs. 1,831 million in the last two years, net borrowing (long term financing net of cash and bank balances) only amounts to Rs. 396 million as at 31 December 2012.

Environment and energy conservation
Fuel and energy conservation initiatives have resulted in significant reduction of consumption, and the company continues to monitor: • emissions and effluents as per the national environment quality standards, as well as • noise generated from the operation of plants, and • maintains the minimum permitted levels.

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Mr Yousuf Husain Mirza, Chief Executive & Managing Director of Linde Pakistan, receiving RSE Special Award

Linde Pakistan is the leading supplier of industrial gases to the ship-breaking industry

Former Governor Punjab awarded “CSR Business Excellence Award 2012”

Linde Pakistan Team won the RSE Special Award

Linde Pakistan Limited – a High Performance Organisation (HPO)
Linde Pakistan continues its journey of transformation to become a High Performing Organisation. HPO stands for everything that drives daily work and performance, provides direction and orientation, and helps your company to achieve the vision of being “The leading global industrial gases and engineering group, admired for its people who provide innovative solutions that make a difference to the world”. The HPO program is a step by step programme launched throughout The Linde Group in 2009, as a result of which local initiatives supported by regional and global input ensure that a culture of relentless self-improvement permeates throughout the organization.

Corporate social responsibility
The Linde Group is involved in a variety of projects and initiatives at its locations around the world. In line with this Policy Linde Pakistan provided assistance, locally, in the form of donations, sponsorships, as well as volunteer work by employees. This was done through its HELP Program in areas of agreed strategic priority which include education, healthcare, science and research, as well as projects which enables Linde to meet its responsibility as a good neighbor, and bring to use its specialist knowledge as a technology group and gases expert. Linde Pakistan, also as a priority, takes all possible operational measures to ensure that all its employees as well as the communities it operates in, remain safe. Environmental protection is a high priority and as such the Company is continuously striving to ensure that its production processes are eco-friendly and efficient. The Company constantly endeavours to improve energy efficiency and reduce waste through reuse and recycling at both its production facilities as well as its offices. During the energy crisis the Company gave priority to the healthcare sector to ensure that there is no product shortage in this life-saving sector and an uninterrupted supply was maintained. Linde Pakistan continued its commitment to develop skills of the local welding community and to improve standards of welder safety, ensuring a responsible management of safety and health consequences in a very promising sector of the Company’s business. The Company has sponsored training at the local technical training institutes and provides, in addition to welding and safety equipment, welding experts to train staff and students at these institutes. An understanding has also been reached whereby Linde Pakistan will support a German government initiative for providing vocational training and industrial experience.

CSR Business Excellence Award
The Directors are pleased to report that your Company was awarded the “CSR Business Excellence Award 2012”, in recognition of best performance and support to social development in the country, by the National Forum for Environment and Health (NFEH) in March 2012. The CSR Business Excellence Award has been instituted to recognize and promote organizations making outstanding contributions to a sustainable future through CSR initiatives.

Distribution of dividends and appropriation of profits
Linde Pakistan continues to remain in a reinvestment phase and continues to consider many options and opportunities for growth and new business development. In view of the investments already committed to as well as possible future plans, and to keep overall leverage levels within prudent limits the Company would require to conserve cash. Therefore the Directors recommend a final cash dividend of Rs. 5.00 (50 %) per ordinary share of Rs. 10 each, making a total dividend for the year of Rs. 7.00 (70 %), which represents a 63.5 % payout of earnings, and will enable suitable retention.

7th EFP Best Practices Award on OSH&E
The Company has won the 2nd Prize for the “Best Practices” in Occupational Safety, Health & Environment (OSH&E) in the category of Oil, Gas & Energy Sector from the Employees Federation of Pakistan in April 2012. This award is in recognition of the Company’s high standard of safe and health in its working conditions as well as its efforts to become World class in Safety.

The appropriations approved by the Directors are,therefore, as follows:
Rupees in ’000 Un-appropriated profit as at 31 December 2011 Final dividend for the year ended 31 December 2011 at Rs. 5.00 per share Transfer to general reserve Net Profit after taxation for the year 2012 Net Actuarial losses recognized in other comprehensive income Disposable profit for appropriation Interim dividend at Rs. 2.00 per share paid in September 2012 Un-appropriated profit carried forward Subsequent effects: Proposed final dividend at Rs. 5.00 per share Transfer to general reserve Total dividend per share for the year Rs. 7.00 EPS – for the year 2012 Rs. 11.03 (2011: Rs. 10.50) 125,194 95,693 220,887 175,271 204,748 (125,194) (79,554) 276,289 (5,325) 270,964 (50,077) 220,887

Human resources
Thriving through diversity is one of Linde’s core values. Linde Pakistan believes that diversity results in enriched collaboration and enhanced solutions, and is committed to maintaining a workplace free from any discrimination based on race, creed, culture, religion, gender, age or marital status. It can proudly claim that it provides a platform for all employees to unleash their full potential in their current roles and develop their skills for future leadership roles.

RSE Asia-One Excellence Awards
The Linde Pakistan Team was awarded the “RSE Special Award” by the Linde Group in acknowledgement of its successful efforts to turn around the Company’s business.

Industrial relations
Industrial relations remained harmonious throughout 2012. The business environment remains challenging and therefore it is an imperative for the Company to prepare to meet the challenges in future. A Business Transformation initiative was undertaken in 2012 to reorganize operational activities which, as referred to earlier, necessitated the implementation of a Voluntary Separation Scheme (VSS) for employees at all levels of the organization. This was done with the fullest possible recognition to the best financial interest of all concerned employees in line with the philosophy of the Company, and therefore caused no industrial relation issue.

Best Finance Team – Runner-up Awards
The Finance & Control (FiCO) team of the Company has been declared the “Best Finance Team” (Runner-up), among the 11-member countries of the South & East Asia Region of the Linde Group, in recognition of its distinctive financial management performance. The Directors are pleased to record their appreciation and congratulations to all the recipients of these awards in recognition of their excellent contributions.

Awards
Country Excellence Awards were given to several employees who exhibited outstanding performances during the year, highlighted in this Report.

Post balance sheet events
There has been no significant event since 31 December 2012 to date, except the declaration of final dividend which is subject to the approval of the Members at the 64th Annual General Meeting to be held on 29 April 2013. The effect of such dividend shall be reflected in the next year’s financial statements.

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Country Leadership Team (CLT).

Holding company
The Company’s holding company is The BOC Group Limited, which is incorporated in the U. K. The BOC Group Limited is a wholly owned subsidiary of Linde AG, which is incorporated in Germany. As such, Linde AG is the ultimate parent company of Linde Pakistan Limited.

Linde Pakistan will also continue to leverage on the Research & Development work done by the Linde Group on a global level and with the help of regional experts continue to deliver innovative and cutting edge solutions to its customers. A focus on developing new applications will continue to help improve productivity and efficiency in customer processes and at the same time allow Linde to venture into new avenues for expansion and growth.

Auditors
The present auditors, KPMG Taseer Hadi & Co., Chartered Accountants, retire and being eligible, offer themselves for reappointment. As suggested by the Audit Committee, the Board of Directors has recommended their reappointment as auditors of the Company for the year ending 31 December 2013, at a fee to be mutually agreed.

Acknowledgement
The Board of Directors of your Company would like to thank all its customers, suppliers, contractors, service providers and shareholders for their continued valuable support in managing the business. The Board also takes this opportunity to express its gratitude and appreciation for the commitment, loyalty and dedication shown by the management and employees across the country which enabled the Company to produce a healthy performance in a highly competitive business environment. Yousuf Husain Mirza Chief Executive & Managing Director Muhammad Ashraf Bawany Deputy Managing Director

Future prospects – challenges & strategies
With a turbulent economy and slowing Large Scale Manufacturing, the challenges faced by the business are many, but even in these testing times, Linde Pakistan has continued to grow at a very healthy pace over the last couple of years. This has been made possible through aggressive business development, investment, and improvements in productivity. The Company intends to continue this journey and with the many key projects in the pipeline and nearing maturity, it is well poised to ensure future growth as well.

On behalf of the Board

Karachi 27 February 2013

Munnawar Hamid – OBE Chairman Zubair Ahmad Sales Manager North Farried Aman Shaikh Marketing Manager Muhammad Salim Sheikh Head of HR

Zubair Siddiqui Head of Operations

Ali Ahmad Sales Manager South

Ahmad Raza Distribution & CES Manager

Arshad Manzoor Cluster IS Manager Bangladesh & Pakistan

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Corporate governance.

Mr M Ashraf Bawany, Deputy Managing Director, in an interactive session

Board Meeting in progress

Linde Pakistan Limited firmly believes that sound corporate governance is fundamental to sustainable corporate success. Its corporate governance philosophy is translated into strategies and policies formulated by the Board of Directors ensuring a focus on optimizing long term value for shareholders, employees, customers, other stakeholders, including the communities the Company operates in, in particular, as well as society at large in general. The management of the Company is committed to high standards of corporate governance to ensure business integrity, and fair and transparent business practices and as a result a sustained confidence of all stakeholders.

j) Information with respect to corporate restructuring (reorganisation/ restructuring), significant business plans and decisions for the future prospects of profits have been stated in the Directors Report as approved by the Board. k) Statement of the value of investments of Company’s staff retirement funds is as follows:
Name of Funds Staff Provident Fund Employees’ Gratuity Fund Management Staff Pension Fund Management Staff Defined Contribution Pension Fund Un-audited – Rs. 95 million as at 31 December 2012 Rs. 68 million as at 31 December 2012 Rs. 108 million as at 31 December 2012 Audited Rs. 252 million as at 31 July 2012 Rs. 115 million as at 31 December 2011 Rs. 64 million as at 31 December 2011 Rs. 102 million as at 31 December 2011

Name of Directors

Total number of meetings held during the year/ Attendance (2012) 5 4 – – 4/4 – – – 4/4 3/4 3/4 5/5 5/5 5/5 3/5 4/5 5/5 4/5 5/5 4/5

Board of Directors

Audit Committee

Human Resources & Renumeration Committee

4 – – – 4/4 3/4 – – 2/4 3/4

Mr Munnawar Hamid – OBE Mr Yousuf Husain Mirza Mr Sanaullah Qureshi Mr Towfiq Habib Chinoy Mr Manzoor Ahmed Mr M Ashraf Bawany Mr Humayun Bashir* Mr Bernd Hugo Eulitz Mr Siew Yap Wong
* Mr Humayun Bashir resigned on 25 Oct. 2012

Mr Atif Riaz Bokhari, President United Bank Limited, was appointed as a nominee director of The BOC Group Limited on the Board of the Company with effect from 21 January 2013 in place of Mr Humayun Bashir. Mr Bokhari brings with him 28 years of rich experience in domestic and international banking. Moreover, he has a very broad view of industry, trade, commerce and the economy of the country. The Board welcomes the newly appointed director, Mr Atif Riaz Bokhari, and looks forward to his experienced and expert guidance in the development and future progress of Linde Pakistan.

Compliance statement
The Board of Directors has complied with the Code of Corporate Governance, the listing requirements of the Karachi, Lahore and Islamabad Stock Exchanges and the Financial Reporting Framework of Securities & Exchange Commission of Pakistan (SECP). The Directors have confirmed that the following has been complied with: a) The financial statements, prepared by the management of the Company, present its state of affairs fairly, the result of its operations, cash flows and changes in equity. b) Proper books of account of the Company have been maintained. c) Appropriate accounting policies have been consistently applied in preparation of financial statements and accounting estimates are based on reasonable and prudent judgment. d) International Financial Reporting Standards (IFRS), as applicable in Pakistan, have been followed in preparation of financial statements and any departure therefrom has been adequately disclosed and explained. e) The Company maintains sound internal control system which provides reasonable assurance against any material misstatement or loss. Such system is monitored effectively by the management; while the Board Audit Committee reviews internal control based on assessment of risks and reports to Board of Directors. f) There are no significant doubts upon the Company’s ability to continue as a going concern. g) There has been no material departure from the best practices of corporate governance, as detailed in the listing regulations. h) Key operating and financial data of last 10-year in a summarized form is given on page number 18 to this annual report. i) Information about outstanding taxes and levies is given in the notes to the financial statements.

Committees of the Board
The Committees of the Board act in line with their respective terms of reference as determined by the Board. These Committees assist the Board in discharge of its fiduciary responsibilities.

Leave of absence was granted to Directors who could not attend meetings.

The audit of these funds for the year is in progress. l) The Board of Directors in its meeting held on 25 October 2012 adopted the “Code of Ethics” of the ultimate parent company, Linde AG, Germany, as the “Code of Conduct” of the Company in place of its earlier “Statement of Ethics and Business Practices” which appears on page 10. The directors and employees are already familiar with the Code of Ethics that was launched in the Company in July 2011. It is mandatory for all employees to complete an e-training of the Code of Ethics.

Role and responsibility of the Chairman and Chief Executive
The Board of Directors has clearly defined the respective roles and responsibilities of the Chairman (Non-Executive) and the Chief Executive. The role of the Chairman is primarily to manage the Board, its various Committees and their respective processes to ensure effective oversight of the Company’s operations and performance in line with strategy, to discharge its various fiduciary and other responsibilities. The Chief Executive is responsible for all matters pertaining to the operation and functioning of the Company.

Audit Committee with brief terms of reference
BAC assists the Board in fulfilling its responsibilities, primarily in reviewing and reporting financial and non-financial information to shareholders and complying with all relevant statutory requirements and best practices of the code of corporate governance. BAC also ascertains that internal control systems are adequate and effective and reports matters of significance to the Board. BAC is authorized to call for information from management and to consult directly with independent professionals as considered appropriate. BAC comprises of four Non-Executive Directors. The Chief Executive Officer, Chief Financial Officer, Head of Internal Audit and representative of External Auditors attend meetings by invitation. The Committee also privately meets with the External Auditors and Head of Internal Audit and other members of the internal audit function, at least once in a year. During the financial year ended 31 December 2012, four meetings of the BAC were held. The present members of BAC are as follows:
Mr Sanaullah Qureshi Mr Bernd Hugo Eulitz Mr Siew Yap Wong Mr Atif Riaz Bokhari *
* appointed on 21 Jan. 2013

Board of Directors
The Board comprises 9 (nine) directors, out of whom are 7 (seven) nonexecutive directors including a director representing a financial institution (NITL). The remaining two are executive directors one of whom is the Deputy Managing Director and the other Chief Executive of the Company. All members of the Board are highly qualified professionals of proven integrity with requisite skills, competence, knowledge and experience which are considered to be relevant to the Company’s operations. The Chairman of the Board, who is non-executive, ensures that the Board plays an effective role in fulfilling all its responsibilities. The present term of the Board of Directors will expire on 29 January 2014. During the year 5 (five) meetings of the Board of Directors were held while 4 (four) Audit Committee and 4 (four) meetings of the Human Resource & Remuneration Committee were held. Attendance by each Director in the meetings of the Board and its Sub-Committees is as follows:

Change in the Board of Directors
The following changes have taken place in the Board of your Company since the last Annual Report 2011: Mr Humayun Bashir, a nominee of The BOC Group Limited, U.K. on the Board of the Company, resigned as director with effect from 25 October 2012 following his relocation to a new expanded IBM Middle East Africa role based in Dubai. The directors would like to express their appreciation for the valuable contributions made by Mr Bashir during his tenure as director of the Company and wish him success in his new role and responsibilities.

Chairman Member Member Member

The Secretary of the Committee is Mr Jamal A Qureshi, Assistant Company Secretary.

38

39

Human Resource & Remuneration Committee (HR&RC)
HR&RC assists the Board in the effective discharge of its responsibilities in matters relating to appointments of senior executives and their remuneration as well as management performance review, succession planning and career development. The Committee comprises 5 (five) members, out of whom are 4 non-executive directors including the Chairman whilst the fifth is the Chief Executive of the Company. HR&RC consists of four Non-Executive Directors and the Managing Director. The names of the present members are as follows:
1. 2. 3. 4. 5. Mr Towfiq Habib Chinoy Mr Manzoor Ahmed Mr Bernd Hugo Eulitz Mr Siew Yap Wong Mr Yousuf Husain Mirza Chairman Member Member Member Member

Internal and external audit
Internal Audit At Linde Pakistan Limited, the Internal Audit department is an integral part of the Linde Group Internal Audit Department. Internal Audit aims to assist the Board of Directors and management in discharging their responsibilities by identifying and carrying out independent, objective audits as well as consultancy services aimed at creating value and improvement of business processes. It helps the organisation to achieve its objectives by assessing and helping to improve the effectiveness of risk management, control mechanisms and the governance, management and monitoring of processes through a systematic and targeted approach. To maintain the highest level of independence, Internal Audit has a functional reporting relationship directly to the Board Audit Committee (BAC) as well as Regional Head of South & East Asia / Pacific (Singapore). Such a reporting structure allows the Linde Pakistan Limited Head of Internal Audit to be completely independent from the company’s operations and to receive appropriate support in fulfilling her role. In addition, the Head of Internal Audit has unrestricted access to the Board Audit Committee Chairman, the Managing Director and the Finance Director of the company to ensure that effective reporting and communication lines exist and guidance is sought as required. In order to ensure transparency, all reports are shared with the External Auditors and all material findings from both internal and external audits are fully analyzed and discussed. The BAC reviews all Internal Audit reports which are also discussed in detail with the BAC Chairman regularly. The work of Internal Audit is focused on areas of material risks to the company, determined on the basis of risk based planning approach. Further, globally identified high value reviews also form part of the audit plan to ensure global best practices. The Internal Audit department is guided by a comprehensive audit manual as provided by the Global Group function. The key principles covered in the manual are: objectivity in gathering, assessment and communication of findings; independence from the audited entity; unlimited access to relevant information; integrity in execution of its functions; confidentiality with disclosure only as authorized and assured access to necessary skills and knowledge from the global function should it not exist in the department. The standard audit process is quality based, in that all reports undergo intensive quality reviews at local regional and global levels. In addition, the department is guided by the IIA standards and the Company’s Code of Ethics. External Audit Shareholders appoint the external auditors on a yearly basis at the annual general meeting of the Company as proposed by the Audit Committee and recommended by the Board of Directors. The annual financial statements are audited by such independent external auditors (KPMG) and half-year financial reports are subject to a review by the same firm. In addition to conducting audits and reviews, the auditors also report on any matters arising from the audit particularly in the key areas of focus.

Disclosure and transparency
The Company in compliance with the legal and listing requirements treats all its shareholders equally. For the purpose of transparency, the Company always aims to provide shareholders and public up-to-date information about its business activities through the stock exchanges, the press, its website and periodic published financial statements as the case may be. The Company also publishes a financial calendar, which appears in its annual report, showing a tentative schedule for the announcement of financial results to be made in a calendar year. The Company considers the annual general meeting as the most appropriate forum for open and transparent discussions with its shareholders where they get an opportunity to review business performance as well as financial information as contained in the annual report and accounts. The event not only provides an opportunity for the shareholders to raise questions with the directors present, but is also an opportunity for giving information to shareholders on the future direction of the Company. As the Company believes in transparency and disclosure of information for all its stakeholders, the Company, as required, gives notice of the general meeting in the press well before the prescribed time and offers free transportation service between a pre-designated generally convenient place and the venue of the meeting to encourage maximum attendance of its members at the general meeting.

Best corporate practices
As part of The Linde Group, the Company is committed to integrity in all its business dealings. This is non-negotiable. Integrity and ethical values are prerequisites for each one at the Company. Governance standards and best corporate practices are regularly reviewed and updated by the Board to ensure their effectiveness and relevance in line with the Company’s objective including implementation thereof. The Board with active participation of all members in its meetings formulates and approves policies, strategies, business plans and provides guidance on operations and matters of significant importance. Additionally, the Board sets compliance with all applicable legal and listing requirements as a priority. Linde’s Code of Ethics anchors ethical conduct within the Company. In addition, since 2006, the Company (as part of The Linde Group) has pledged its commitment to the United Nations Global Compact. The UN Global Compact is a global alliance of organisations and private businesses, which aims to protect human rights, support compliance with labour standards, encourage environmental responsibility and combat corruption. The Company incorporates the principles of the UN Global Compact in our business activities. At Linde, we have zero tolerance for corruption. The Company has in place an Anti-Corruption Compliance Guide (ACCG). The ACCG is designed to help employees conduct business in a legal and legitimate way and avoid violations of the Code of Ethics. It offers guidance to our employees on the granting and receiving of benefits, such as gifts, meals and invitations to events, that are prevalent in all cultures in general business dealings and thereby aims to minimise the risk of corruption in our business.

The Secretary of the Committee is Mr M Salim Sheikh, Head of HR.

Share Transfer Committee
The Committee approves registration, transfers and transmission of shares, a summary of which is subsequently placed before the Board for information and ratification. This Committee consists of the following two executive directors:
1. 2. Mr Yousuf Husain Mirza Mr Muhammad Ashraf Bawany Chairman Member

Pattern of shareholding
The pattern of shareholding together with additional information thereon is given on pages 84 and 85 to disclose the aggregate number of shares with the break-up of certain classes of shareholders as prescribed under the corporate and financial reporting framework. During the year, no trading in the shares of the Company was carried out by the Directors, Chief Executive, Chief Financial Officer and Company Secretary and their spouses and minor children except by a director, Mr Towfiq Habib Chinoy. Mr Chinoy purchased 22,770 shares of the Company and timely disclosure of the same was made as required.

The Secretary of the Committee is Mr Wakil Ahmed Khan, Manager – Corporate Services.

40

41

Statement of compliance with the Code of Corporate Governance. Year ended 31 December 2012.
This statement is being presented to comply with the Code of Corporate Governance (CCG) contained in listing regulations of the Karachi, Lahore and Islamabad for the purpose of establishing a framework of good governance, whereby a listed company is managed in compliance with the best practices of corporate governance. The Company has applied the principles contained in the CCG in the following manner: 1. The Company encourages representation of independent non-executive directors and directors representing minority interests on its board of directors. At present the board includes: 5. The Board of Directors in its meeting held on 25 October 2012 adopted the “Code of Ethics” of the ultimate parent company, Linde AG, Germany, as the “Code of Conduct” of the Company in place of its earlier Code “Statement of Ethics and Business Practices”, which appears on page 10. The directors and employees are already familiar with the Code of Ethics that was launched in the Company in July 2011. It is mandatory for all employees to complete an e-training of the Code of Ethics. 6. The Board has developed a vision/mission statement, overall corporate strategy and significant policies of the Company. A complete record of particulars of significant policies along with the dates on which they were approved or amended has been maintained. 7. All the powers of the board have been duly exercised and decisions on material transactions, including determination of annual remuneration and terms and conditions of employment of the CEO, other executive and non-executive directors, have been taken by the Board. 8. All the meetings of the Board held during the year were presided over by the Chairman. The Board met 5 (five) times this year including once in every quarter for consideration and approval of the financial statements as well as annual business plans of the Company following the best practices of Corporate Governance while a special meeting was held for approval of Company’s investment plan for self-power generation at Port Qasim. Written notices of the board meetings, along with agenda and working papers, were circulated at least seven days before the meetings. The minutes of the meetings were appropriately recorded and circulated. 9. Directors are well conversant with the listing regulations, legal requirements and operational imperatives of the Company, and as such fully aware of their duties and responsibilities to effectively manage the affairs of the Company for and on behalf of shareholders. Moreover, orientation sessions were arranged for two non-resident directors appointed on the Board during the year to acquaint them with the local markets, business objectives and affairs of the Company. They were also provided with the copies of Listing Regulations, Memorandum & Articles of Association and Code of Corporate Governance. A presentation on the revised Code of Corporate Governance was also made to the Board to apprise directors of the changes to ensure compliance thereon. Current Board of the Company has 3 certified directors from Pakistan Institute of Corporate Governance viz Mr Yousuf Husain Mirza, Mr Muhammad Ashraf Bawany and Mr Manzoor Ahmed while the arrangements for the remaining directors will be made to complete their certification under the director’s training programme within the prescribed time. 10. No new appointments of Company Secretary, CFO and Head of Internal Audit have been made during the year. The Board, however, has approved their annual remuneration and terms and conditions of employment, as recommended by the Human Resource & Remuneration Committee of the Board. 11. The directors’ report for this year has been prepared in compliance with the requirements of the CCG and fully describes the salient matters required to be disclosed. 12. The financial statements of the company were duly endorsed by CEO and CFO before approval of the Board. 13. The directors, CEO and executives do not hold any interest in the shares of the company other than that disclosed in the pattern of shareholding. 14. The Company has complied with all the corporate and financial reporting requirements of the CCG. 15. The Board Audit Committee has been in existence since May 2002. It comprises 4 members, all of whom are non-executive directors including the Chairman of the Committee. Currently, Mr Jamal Qureshi, Assistant Company Secretary, is the Secretary to the Audit Committee for which SECP has accorded approval vide letter SMD/ SE/2(10)/2002, dated 14 December 2012. 16. The meetings of the Audit Committee were held at least once every quarter prior to approval of interim and final results of the company and as required by the CCG. The terms of reference of the committee have been formed and advised to the Committee for compliance. 17. The Board has changed the name of Remuneration & Appointments Committee to “Human Resource & Remuneration Committee” and included the CEO as a member of the Committee on 25 October 2012 in terms of clause xxv of the CCG. It comprises 5 members, of whom 4 are non-executive directors including the Chairman of the Committee while the other member is an executive director. 18. The board has set up an effective internal audit function. The appointed Head of Internal Audit is responsible for the work plan and reports the results of all Internal Audit activities to the Board Audit Committee. The Internal Audit function remains independent from the Company by having a reporting line to the Parent Company and also direct access to the Chairman of the Board Audit Committee. 19. The statutory auditors of the Company have confirmed that they have been given a satisfactory rating under the quality control review program of the ICAP, that they or any of the partners of the firm, their spouses and minor children do not hold shares of the Company and that the firm and all its partners are in compliance with International Federation of Accountants (IFAC) guidelines on code of ethics as adopted by the ICAP. 20. The statutory auditors or the persons associated with them have not been appointed to provide other services except in accordance with the Listing Regulations and the auditors have confirmed that they have observed IFAC guidelines in this regard. 21. The ‘closed period’, prior to the announcement of interim/final results, and business decisions, which may materially affect the market price of Company’s securities, was determined and intimated to directors, employees and stock exchanges. 22. Material/price sensitive information has been disseminated among all market participants at once through stock exchanges. 23. We confirm that all other material principles enshrined in the CCG have been complied with.

Executive Directors
• Mr Yousuf Husain Mirza • Mr M Ashraf Bawany

Non-Executive Directors
• • • • • • • Mr Munnawar Hamid – OBE Mr Sanaullah Qureshi Mr Towfiq Habib Chinoy Mr Manzoor Ahmed Mr Bernd Hugo Eulitz Mr Siew Yap Wong Mr Atif Riaz Bokhari*

* Mr Atif Riaz Bokhari was appointed on the Board on 21 January 2013 in place of Mr Humayun Bashir, who resigned with effect from 25 October 2012.

2. The directors have confirmed that none of them, except Mr Manzoor Ahmed who has been granted exemption by the SECP, vide letter SMD/SE/2(10)2002, dated 17 August 2012, for a period of 2 years, is serving as a director on more than seven listed companies, including this Company. 3. All the resident directors of the Company are registered as taxpayers and none of them has defaulted in payment of any loan to a banking company, a DFI or an NBFI or, being a member of a stock exchange, has been declared as a defaulter by that stock exchange. 4. Three casual vacancies occurred on the Board during the year. Of these, two casual vacancies occurring on 10 February 2012 were filled up immediately while the one occurring on 25 October 2012 was filled up within the prescribed period.

Yousuf Husain Mirza Chief Executive Karachi 27 February 2013

Munnawar Hamid – OBE Chairman

42

43

44

45

Financial Statements of the Company.

45 47 48 49 50 51 52

Auditors‘ Report to the Members Profit & loss account Statement of comprehensive income Balance sheet Cash flow statement Statement of changes in equity Notes to the Financial Statements

46

47

Profit and loss account.

Rupees in ‘000 Gross sales Trade discount and sales tax Net sales Cost of sales Gross profit Distribution and marketing expenses Administrative expenses Other operating expenses Other operating income Operating profit before reorganization/restructuring cost Reorganization/restructuring cost Operating profit after reorganization/restructuring cost Finance costs Profit before taxation Taxation Profit for the year Earnings per share – basic and diluted in Rupees
The annexed notes 1 to 42 form an integral part of these financial statements.

Note

5 5

For the year ended 31 Dec. 2012

4,252,294 (512,889)

For the year ended 31 Dec. 2011

3,476,567 (431,767)

3,739,405 (2,785,235)

3,044,800 (2,275,591) 769,209

6

954,170

7 8 10 9

(193,676) (33,811) 68,635

(231,066)

(211,490) (171,376) (40,554)

564,252 (204,572)

404,639


58,850

11

359,680

404,639 (1,916)

12

(44,266)

315,414

402,723 (139,848) 262,875

13

(39,125)

276,289 11.03

14

10.50

Yousuf Husain Mirza Chief Executive

Munnawar Hamid – OBE Chairman

48

49

Statement of comprehensive income.

Balance sheet.

Rupees in ‘000 Profit for the year Other comprehensive income Actuarial losses on defined benefit plans Gain/(loss) on derivative financial instruments Tax on other comprehensive income

For the year ended 31 Dec. 2012 276,289

For the year ended 31 Dec. 2011 262,875

Rupees in ‘000 Assets Non-current assets Property, plant and equipment

Note

As at 31 Dec. 2012

As at 31 Dec. 2011

15 16 17

2,604,743 10 – 49 26,691 2,631,493

2,035,575 – 12,495 1,010 26,362 2,075,442 108,272 155,061 72,302 156,553 8,300 30,948 39,204 – 125,551 696,191 2,771,633

(8,193) 2,348 2,046 (3,799)

(12,385) (2,348) 5,157 (9,576) 253,299

Investment in subsidiary Net investment in finance lease Long-term loans Long-term deposits Current assets Stores and spares Stock-in-trade Current maturity of net investment in finance lease Trade debts Loans and advances Deposits and prepayments Other receivables Taxation – net Cash and bank balances Total assets Equity and liabilities Share capital and reserves Issued, subscribed and paid-up capital Reserves Unappropriated profit Non-current liabilities Long-term financing Long-term deposits Deferred liabilities Current liabilities Trade and other payables Taxation – net Total equity and liabilities Contingencies and commitments
The annexed notes 1 to 42 form an integral part of these financial statements.

Total comprehensive income for the year
The annexed notes 1 to 42 form an integral part of these financial statements.

272,490

18 19 16 20 21 22 23 24

116,732 208,695 14,260 203,269 19,135 27,029 40,175 24,154 353,549 1,006,998 3,638,491

25

250,387 1,207,623 220,887 1,678,897

250,387 1,126,543 204,748 1,581,678 200,000 129,880 167,315 497,195 611,706 81,054 692,760 2,771,633

26 27 28

750,000 141,586 204,192 1,095,778

30

863,816 – 863,816 3,638,491

31

Yousuf Husain Mirza Chief Executive

Munnawar Hamid – OBE Chairman

Yousuf Husain Mirza Chief Executive

Munnawar Hamid – OBE Chairman

50

51

Cash flow statement.

Statement of changes in equity.

For the year ended 31 Dec. 2012 For the year ended 31 Dec. 2012 792,857 (36,885) (113,737) (200) 1,752 632 11,706 12,495 668,620 For the year ended 31 Dec. 2011 634,381 (1,916) (122,467) (1,408) 4,105 (15,466) 7,385 68,793 573,407 Interim dividend for the year ended 31 December 2011 – Rs. 2.00 per share – – Cash flow from investing activities Acquisition of property, plant and equipment Proceeds from disposal of operating assets Interest received on balances with banks Investment in subsidiary Net cash used in investing activities Cash flow from financing activities Long-term financing Dividends paid Net cash from financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at beginning of the year Cash and cash equivalents at end of the year
The annexed notes 1 to 42 form an integral part of these financial statements.

Rupees in ‘000 Cash flow from operating activities Cash generated from operations Finance costs paid Income tax paid Post retirement medical benefits paid Interest received on investment in finance lease Long term loans and deposits Long-term deposits Net investment in finance lease Net cash from operating activities

Note 32

Rupees in ‘000 Balance as at 1 January 2011 Total comprehensive income for the year Profit for the year Other comprehensive income for the year Transactions with owners of the Company, recognised directly in equity Final dividend for the year ended 31 December 2010 – Rs. 4.50 per share

Issued, subscribed and paid-up capital 250,387 – – – –

Hedging reserve – – (1,526) (1,526) – – – – (1,526)

Reserves General reserve

Unappropriated Profit 201,176 262,875 (8,050) 254,825 (112,674) (50,077) (162,751) (88,502) 204,748

Total 1,491,130 262,875 (9,576) 253,299 (112,674) (50,077) (162,751) – 1,581,678

1,039,567 – – – – – – 88,502 1,128,069

(839,481) 15,819 8,544 (10) (815,128)

(991,470) 6,577 22,568 – (962,325)

Transfer to general reserve Balance as at 31 December 2011 Total comprehensive income for the year Profit for the year Other comprehensive income for the year

– 250,387

– – –

– 1,526 1,526 – – – – –

– – – – – – 79,554 1,207,623

276,289 (5,325) 270,964 (125,194) (50,077) (175,271) (79,554) 220,887

276,289 (3,799) 272,490 (125,194) (50,077) (175,271) – 1,678,897

550,000 (175,494) 374,506 227,998 125,551 24 353,549

200,000 (163,595) 36,405 (352,513) 478,064 125,551 Transfer to general reserve Balance as at 31 December 2012
The annexed notes 1 to 42 form an integral part of these financial statements.

Transactions with owners of the Company, recognised directly in equity Final dividend for the year ended 31 December 2011 – Rs. 5.00 per share Interim dividend for the year ended 31 December 2012 – Rs. 2.00 per share – – – – 250,387

Yousuf Husain Mirza Chief Executive

Munnawar Hamid – OBE Chairman

Yousuf Husain Mirza Chief Executive

Munnawar Hamid – OBE Chairman

52

53

Notes to the financial statements. For the year ended 31 December 2012.

1. Legal status and operations
Linde Pakistan Limited (“the Company”) was incorporated in Pakistan under the Companies Act, 1913 (now Companies Ordinance, 1984), as a private limited company in 1949 and converted into a public limited company in 1958. Its shares are quoted on all the Stock Exchanges of Pakistan. The address of its registered office is West Wharf, Dockyard Road, Karachi, Pakistan. The Company is principally engaged in the manufacturing of industrial and medical gases, welding electrodes and marketing of medical equipment. The Company is a subsidiary of The BOC Group Limited whereas its ultimate parent company is Linde AG, Germany. The Company has a wholly owned subsidiary, BOC Pakistan (Private) Limited (“BOCPL”), which has not carried out any business activities during the year. Accordingly, exemption has been granted by the Securities and Exchange Commission of Pakistan (“SECP”) from the application of sub-section (1) to (7) of section 237 of the Companies Ordinance, 1984 requiring consolidation of subsidiary in the preparation of financial statements for the current year. torical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision effects only that period, or in the period of the revision and future periods if the revision effects both current and future periods. Information about judgements made by the management in the application of approved accounting standards, as applicable in Pakistan, that have significant effect on the financial statements, and estimates that have a significant risk of resulting in a material adjustment in the subsequent years are disclosed in note 39 to these financial statements. 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 other than increase in disclosures in certain cases. aggregate lease rentals and the estimated residual value over the net investment (cost of leased assets) is amortized to income over the term of the lease, so as to produce a constant periodic rate of return on net investment outstanding in the leases. 4.4 Dividend and appropriation to reserves Dividend distribution to the Company’s shareholders and appropriation to reserves are recognised in the financial statements in the period in which these are approved. 4.5 Long-term incentive plan The fair value of the amount payable to employees in respect of long term incentive plan, which are settled in cash, is recognised as an expense with a corresponding increase in liabilities, over the period that the employees become entitled to payment subject to satisfactory fulfilment of certain performance conditions. The accrued liability is remeasured at each reporting date and at settlement date. Any changes in the fair value of the liability are recognised as salary expense in profit or loss. 4.6 Taxation Income tax expense comprises current and deferred tax. Income tax expense is recognised in profit and loss account except to the extent that it relates to items recognised directly in equity or in other comprehensive income. Current Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of prior years. Deferred Deferred tax is recognised, using the balance sheet liability method, in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The amount of deferred tax recognised is based on expected manner of realization or settlement of the carrying amount of assets and liabilities using the tax rates enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised for all deductible temporary differences and carry forward of unused tax losses, to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and carry forward of unused tax losses can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

4. Summary of significant accounting policies
The significant accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the periods presented in these financial statements. 4.1 Revenue recognition Revenue is measured at the fair value of the consideration received or receivable. Revenue is recognised to the extent it is probable that the economic benefits will flow to the Company and the revenue can be measured reliably. • Revenue from sale of goods is measured net of sales tax, returns, trade discounts and volume rebates, and is recognised when significant risks and rewards of ownership are transferred to the buyer, that is, when deliveries are made and recovery of the consideration is probable. Rental and other service income is recognised in profit and loss account on accrual basis. Return on bank deposits is recognised on time proportion using the effective rate of return.

3. Standards, amendments and interpretations
3.1 Standards, amendments and interpretations to the published approved accounting standards that are effective in the current accounting period Following standards, interpretations and amendments became effective during the year. However, these amendments to IFRS and interpretations did not have any material effect on the Company’s financial statements. • • Amendments to IAS 12 – Deferred Tax: Recovery of Underlying Assets Amendments to IAS 1: Presentation of Items of Other Comprehensive Income

2. Basis of preparation
2.1 Statement of compliance These financial statements have been prepared in accordance with approved accounting standards as applicable in Pakistan. Approved accounting standards comprise of such International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board as are notified under the Companies Ordinance, 1984, provision of and directives issued under the Companies Ordinance, 1984. In case requirements differ, the provisions or directives of the Companies Ordinance, 1984 shall prevail. 2.2 Basis of measurement These financial statements have been prepared on the historical cost basis, except for obligations in respect of staff retirement benefits and derivative financial instruments. 2.3 Functional and presentation currency The financial statements are presented in Pakistan Rupees, which is the Company’s functional and presentation currency. All financial information presented in Pakistan Rupees has been rounded to the nearest thousand. 2.4 Use of estimates and judgements The preparation of financial statements in conformity with approved accounting standards as applicable in Pakistan, requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on his-

• •

3.2 Standards, amendments and interpretations to approved accounting standards that are issued but not yet effective The following standards, amendments and interpretations of approved accounting standards are effective for annual accounting periods beginning on or after 1 January 2013. • • • • • IAS 19 Employee Benefits (amended 2011) IAS 27 Separate Financial Statements (2011) IAS 28 Investments in Associates and Joint Ventures (2011) Amendments to IAS 32: Offsetting Financial Assets and Financial Liabilities Amendments to IFRS 7: Disclosures – Offsetting Financial Assets and Financial Liabilities

4.2 Operating segments An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses; whose operating results are regularly reviewed by the Company’s management to make decisions about resources to be allocated to the segment and to assess its performance; and for which discrete financial information is available. The Compay’s format for segment reporting is based on its products and services. Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate assets and liabilities, such as, cash and bank balances and related income and expenses, and income tax assets and liabilities. Segment capital expenditure is the total cost incurred during the period to acquire property, plant and equipment. 4.3 Finance lease income The financing method is used in accounting for income on finance leases. Under this method the unearned lease income, that is, the excess of

Improvements to: • IAS 1 Presentation of Financial Statements • IAS 16 Property, Plant and Equipment • IAS 32 Financial Instruments: Presentation • IAS 34 Interim Financial Reporting

54

55

4.7 Property, plant and equipment Operating fixed assets Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses, if any, except freehold land which is stated at cost. Cost includes expenditure that is directly attributable to the acquisition of the asset. When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. Subsequent costs Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the entity and its cost can be reliably measured. Cost incurred to replace a component of an item of property, plant and equipment is capitalised and the asset so replaced is retired from use. Normal repairs and maintenance are charged to the profit and loss account during the period in which they are incurred. Depreciation Depreciation is based on the cost of an asset less its residual value. Depreciation is recognised in profit and loss on a straight-line basis over the estimated useful life of an item of property, plant and equipment. Freehold land is not depreciated. Depreciation methods, useful lives and residual values are reviewed at each reporting date. Gains and losses on disposal Gains or losses on disposal of an item of property, plant and equipment are recognised in the profit and loss account. Capital work in progress Capital work in progress is stated at cost and consists of expenditure incurred and advances made in respect of tangible and intangible assets in the course of their construction and installation. Transfers are made to relevant asset category as and when assets are available for intended use. 4.8 Investment in subsidiary Investment in subsidiary is stated at cost net of provision for impairment, if any. This investment is classified as long term investment. 4.9 Embedded finance lease Contractual arrangements, the fulfillment of which is dependent upon the use of a specific asset and whereby the right to use the underlying asset is conveyed to the customer, are classified as finance lease. Net investment in

finance lease is recognised at an amount equal to the present value of the lease payments receivable, including any guaranteed residual value. 4.10 Intangible assets An intangible asset is recognised if it is probable that future economic benefits attributable to the asset will flow to the enterprise and the cost of such asset can be measured reliably. Costs directly associated with identifiable software that will have probable economic benefits exceeding costs beyond one year, are recognised as an intangible asset. Direct costs include the purchase cost of software and other directly attributable costs of preparing the software for its intended use. Computer software acquisition or development cost is stated at cost less accumulated amortisation and impairment losses, if any, and is amortised on a straight-line basis over its estimated useful life. 4.11 Impairment The carrying amounts of Company’s assets are reviewed at each balance sheet date to determine whether there is any indication of impairment loss. If any such indication exists, the asset’s recoverable amount is estimated to determine the extent of impairment loss, if any. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its estimated recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. Impairment losses are recognised in the profit and loss account. 4.12 Stores and spares Stores and spares are stated at cost determined using moving average method. Provision is made for slow moving and obsolete items, if any. Items in transit are valued at cost comprising invoice value plus other charges incurred thereon. 4.13 Stock-in-trade Stock-in-trade is stated at the lower of cost and net realisable value. The cost is determined using moving average method, and includes expenditure incurred in acquiring the stocks, conversion costs and other costs incurred in bringing the inventories to their existing location and condition. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and costs necessary to make the sale. Stock in transit is valued at cost comprising invoice value plus other charges incurred thereon.

4.14 Trade debts and other receivables Trade debts and other receivables are initially measured at fair value and subsequently at amortised cost using the effective interest method, less provision for impairment, if any. A provision is established when there is an objective evidence that the Company will not be able to collect all the amounts due according to the original terms of receivables. Trade debts and other receivables considered irrecoverable are written off. 4.15 Cash and cash equivalents Cash and cash equivalents comprise cash in hand and deposits held with banks. Running finance facilities availed by the Company, which are repayable 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 the statement of cash flows. 4.16 Financial assets and liabilities The Company recognises financial asset or a financial liability when it becomes a party to the contractual provision of the instrument. Financial assets and liabilities are recognised initially at cost, which is the fair value of the consideration given or received as appropriate, plus any directly attributable transaction costs. These financial assets and liabilities are subsequently measured at fair value or amortised cost using the effective interest rate method, as the case may be. Financial assets are derecognised when the contractual right to cash flows from the asset expire,or when substantially all the risks and rewards of ownership of the financial asset are transferred. Financial liability is derecognised when its contractual obligations are discharged, cancelled or expired. Financial assets and financial liabilities are offset and the net amount is reported in the financial statements only when the Company has a legally enforceable right to offset the recognised amounts and the Company intends either to settle on a net basis or to realise the asset and settle the liability simultaneously. A financial asset is assessed at each reporting date to determine whether there is objective evidence that it is impaired. 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. 4.17 Staff retirement benefits Defined benefit plans The Company operates: • an approved defined benefit gratuity scheme for all permanent employees. Minimum qualifying period for entitlement to

gratuity is five years continuous service with the Company; • an approved defined benefit pension scheme for certain management staff. The scheme provides for pension to employees and their wives for life and to specified number of children upto a given age. This pension scheme had been curtailed with effect from 1 October 2006. No new members have been inducted in this scheme since then. The members in this scheme are 25. Both the above schemes are funded and contributions to them are made monthly on the basis of an actuarial valuation and in line with the provisions of the Income Tax Ordinance, 2001. Actuarial valuations of these schemes are carried out at each year end. a scheme to provide post retirement medical benefits to members of Management Staff Pension Funds, retiring on or after 1 July 2000. Provision is made annually to cover obligations under the scheme, by way of a charge to profit and loss account, calculated in accordance with the actuarial valuation. However, with effect from 1 January 2009, the scheme has been discontinued and a one-time lump sum payment was made to the beneficiaries on the basis of their entitlement ascertained by a qualified actuary as at 31 December 2008. In the case of retirees, it was elective to opt for the one-time lump sum payment.



The latest valuations of the above schemes were carried out as of 31 December 2012, using the “Projected Unit Credit Method”. Actuarial gains/losses are recognised in other comprehensive income in the period of occurrence. Defined contribution plans The Company operates: • a recognised defined contribution pension fund for the benefit of its officer cadre employees. Monthly contributions are made by the Company to the Fund at the rate of 8.9 % of basic salary plus house rent and utility allowances, in respect of each member. a recognised contributory provident fund for all permanent employees who have completed six months service. For officer cadre employees, equal monthly contributions are made, both by the Company and the employees at the rate of 5.42 % and 6.5 % of basic salary plus house rent and utility allowances, depending on length of employees’ service. In case of other employees, equal monthly contributions are made, both by the Company and the employees at the rate of 8.33 % and 10 % of basic salary plus applicable cost of living allowance, depending on the length of employees’ service.



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57

4.18 Compensated absences The liability for accumulated compensated absences of employees is recognised in the period in which employees render service that increases their entitlement to future compensated absences. 4.19 Trade and other payables Trade and other payables are stated at cost which is the fair value of the consideration to be paid in the future for goods and services received, whether or not billed to the Company. 4.20 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 and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of obligation. However, provisions are reviewed at each balance sheet date and adjusted to reflect current best estimate. 4.21 Foreign currency transactions Transactions in foreign currencies are translated into Pak Rupees at exchange rates prevailing on the date of transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are retranslated into Pak Rupee at the exchange rate prevailing at that date. Foreign currency differences, if any, arising on retranslation are recognised in profit and loss account. 4.22 Derivative financial instruments When a derivative is designated as the hedging instrument to hedge the exposure to variability in cash flows attributable to a particular risk associated with a recognised asset or liability, the effective portion of changes in the fair value of the derivative is recognised in other comprehensive income and presented in the hedging reserve in equity. Any ineffective portion of changes in the fair value of the derivative is recognised immediately in profit or loss.

When the hedged item is a non-financial asset, the amount accumulated in equity is included in the carrying amount of the asset when the asset is recognised. In other cases the amount accumulated in equity is reclassified to profit or loss in the same period that the hedged item affects profit or loss. If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated or exercised, or the designation is revoked, then hedge accounting is discontinued prospectively. 4.23 Borrowings and their cost Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowing costs are recognised as an expense in the period in which these are incurred except to the extent of borrowing cost that are directly attributable to the acquisition, construction or production of a qualifying asset. Such borrowing costs, if any, are capitalized as part of the cost of that asset.

5.1 Segment results are as follows
31 Dec. 2012 Industrial, medical and other gases 3,136,781 78,624 278,903 357,527 Net sales Less Cost of sales Distribution and marketing expenses Administrative expenses 1,911,033 210,252 176,230 2,297,515 Segment result Unallocated corporate expenses Other operating expenses Operating profit before reorganization/ restructuring cost Reorganization/restructuring cost Other operating income (33,811) 68,635 564,252 (204,572) 359,680 (44,266) (39,125) 276,289 (40,554) 58,850 404,639 – 404,639 (1,916) (139,848) 262,875 481,739 874,202 20,814 17,446 912,462 47,689 2,785,235 231,066 193,676 3,209,977 529,428 2,779,254 Welding and others 1,115,513 – 155,362 155,362 960,151

Rupees in ‘000 Gross sales Less Trade discount Sales tax

Total 4,252,294 78,624 434,265 512,889 3,739,405

Industrial, medical and other gases

31 Dec. 2011 Welding and others 860,488 – 121,834 121,834 738,654

2,616,079 74,990

Total 3,476,567 74,990 356,777 431,767 3,044,800

309,933

234,943

2,306,146

1,607,863 155,575 191,990

667,728 19,500 15,801 703,029 35,625

2,275,591 211,490 171,376 2,658,457 386,343

5. Segment information
The Company’s reportable segments are based on the following product lines: Industrial, medical and other gases This segment covers business with large-scale industrial customers, typically in the oil, chemical, food and beverage, metals, glass sectors and medical customers in healthcare sector. Gases and services are supplied as part of customer specific solutions. These range from supply by pipeline or from dedicated on-site plants to the large users and supply by road tankers in liquefied form to others. Gases for cutting and welding, hospital, laboratory applications and a variety of medical purposes are also distributed under pressure in cylinders. This segment also covers the supply of associated medical equipment. Welding and others This segment covers sale of welding electrodes, packaged chemicals and a range of associated equipments, such as, cutting and welding products and associated safety equipments.

1,955,428

350,718

Operating profit after reorganization/ restructuring cost Finance costs Income tax Profit for the year

58

59

5.2 Transfers between business segments, if any, are recorded at cost. There were no inter segment transfers during the year.

6. Cost of sales
Rupees in ‘000 Note 2012 769,785 376,369 24,213 15.5 6.1 246,105 152,288 207,655 56,621 28,144 32,679 19,437 11,523 3,934 3,872 6,155 1,938,780 92,755 881,979 1,983 (130,262) 2,785,235 2011 644,447 350,577 16,717 188,826 149,854 181,867 41,538 34,924 20,041 17,255 9,598 3,123 3,044 5,830 1,667,641 97,429 602,122 1,154 (92,755) 2,275,591 Fuel and power Raw materials consumed Third party manufacturing charges Depreciation Salaries, allowances and other benefits As at 31 Dec. 2011 Welding and others 118,870 Transportation expenses Repairs and maintenance Consumable spares Total 2,535,249 236,384 2,771,633 Insurance Travelling and conveyance Safety and security expenses Rent, rates and taxes Staff training, development and other expenses Other expenses Cost of goods manufactured Opening stock of finished goods Purchase of finished goods Write down of inventory to net realisable value Closing stock of finished goods

5.3 Gross sales amounting to Rs. 585,663 thousand (2011: Rs. 508,856 thousand) are generated from a customer which comprises more than 10 % of the Company’s revenue. Total revenue of the Company is generated from customers within Pakistan.

5.4 The segment assets and liabilities at 31 December 2012 and capital expenditure for the year then ended are as follows
Industrial, medical and other gases 2,998,075 As at 31 Dec. 2012 Welding and others 149,625 Industrial, medical and other gases 2,416,379

Rupees in ‘000 Segment assets Unallocted assets Total assets Segment liabilities Unallocated liabilities Total liabilities Capital expenditure

Total 3,147,700 490,791 3,638,491

296,705

23,482

320,187 1,639,407 1,959,594

178,783

15,154

193,937 996,018 1,189,955

839,481



839,481

991,470



991,470

5.5 All non-current assets of the Company as at 31 December 2012 were located within Pakistan. Depreciation expense mainly relates to industrial, medical and other gases segment.

6.1 Salaries, allowances and other benefits include Rs. 9,747 thousand (2011: Rs. 8,053 thousand) in respect of staff retirement benefits.

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61

7. Distribution and marketing expenses
Rupees in ‘000 Salaries, allowances and other benefits Technical assistance fee Travelling and conveyance Depreciation Provision for doubtful debts Communications and stationery Repairs and maintenance Safety and security expenses Office light Rent, rates and taxes Advertising and sales promotion Staff training, development and other expenses Other expenses 15.5 Note 7.1 2012 134,719 36,532 18,818 7,819 7,529 8,237 2,151 1,453 4,169 3,153 2,423 3,192 871 231,066 2011 122,444 31,533 23,038 4,528 – 10,586 3,260 1,542 2,400 2,490 6,609 1,854 1,206 211,490

9. Other operating expenses
Rupees in ‘000 Workers’ Profits Participation Fund Workers’ Welfare Fund Legal and professional charges Auditors’ remuneration Donations Others 9.1 9.2 Note 2012 16,940 6,437 7,320 1,440 913 761 33,811 2011 21,635 8,219 7,735 1,440 1,045 480 40,554

9.1 Auditors‘ remuneration
Rupees in ‘000 Audit fee Audit of provident, gratuity, pension and workers’ profits participation fund and fee for special certifications Fee for review of half yearly financial statements Out-of-pocket expenses 2012 700 430 220 90 1,440 2011 700 430 220 90 1,440

7.1 Salaries, allowances and other benefits include Rs. 11,291 thousand (2011: Rs. 8,838 thousand) in respect of staff retirement benefits.

8. Administrative expenses
Rupees in ‘000 Note 2012 98,685 12,880 28,725 13,673 2011

9.2 Donations include an amount of Rs. 500 thousand (2011: Rs. 400 thousand) paid to Aga Khan Hospital and Medical College Foundation, Karachi. Mr Munnawar Hamid – OBE, Chairman, is a trustee of the Aga Khan University.

Salaries, allowances and other benefits Travelling and conveyance Systems support and shared services Communications and stationery Depreciation Repairs and maintenance Office light Directors’ fee and remuneration Safety and security expenses Insurance Rent, rates and taxes Staff training, development and other expenses Other expenses

8.1

94,643 18,087 12,478 8,915 10,950 6,687 5,908 4,620 2,368 656 539 2,598 2,927 171,376

15.5

14,279 6,353 6,329 4,774 1,743 665 683 2,613 2,274 193,676

8.1 Salaries, allowances and other benefits include Rs. 10,419 thousand (2011: Rs. 9,467 thousand) in respect of staff retirement benefits.

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63

10. Other operating income
Rupees in ‘000 Mark-up income on savings and deposit accounts Liquidated damages Gain on disposal of property, plant and equipment Liabilities no more payable written back Income on investment in finance lease Reversal of provision for doubtful debts Exchange gain Others 10.1 Note 2012 8,922 31,961 13,712 7,617 1,752 – 2,959 1,712 68,635 2011 20,724 – 5,709 18,375 4,105 8,650 – 1,287 58,850

13.1 Relationship between tax expense and accounting profit The tax on the Company’s profit before tax differs from the theoretical amount that would arise using the Company’s applicable tax rate as follows:
Rupees in ‘000 Profit before taxation Tax at the applicable tax rate of 35 % (2011: 35 %) Tax effect of non-deductible expenses Effect of tax under final tax regime Effect of tax credit Others 2012 315,414 110,397 11,874 (7,179) (80,311) 4,344 39,125 2011 402,723 140,953 6,327 (6,262) – (1,170) 139,848

10.1 This represent liquidated damages from a contractor under the terms of agreement. The Company has recognised liquidated damages upon acknowledgement of claim by the contractor.

11. Reorganization/restructuring cost In order to contain operational costs and improve productivity, during the year, the Company offered a Voluntary Separation Scheme (the Scheme) to its employees at all levels of the organization. The cost has been recognized in accordance with duly approved plan and represents severance package paid to the employees opting under the scheme.

13.2 During the year, the minimum tax under section 113 of the Income Tax Ordinance, 2001 has been applied as no tax is payable in respect of the year ended 31 December 2012 due to accelerated depreciation allowable on capitalization of the new Lahore Air Separation Unit (ASU) Plant which would replace the existing Lahore Plant. The applicable minimum tax charge has been adjusted against the tax credit available to the Company under section 65B of the Income Tax Ordinance, 2001.

12. Finance costs
Rupees in ‘000 Bank charges Mark-up on long term financing Mark-up on short term running finances Interest on Workers’ Profits Participation Fund 2012 2,101 41,355 689 121 44,266 2011

13.3 The returns of total income for and upto the tax year 2012 have been filed by the Company and the said returns, as per the provisions of Section 120 of the Income Tax Ordinance, 2001 (“the Ordinance”), have been taken to be the deemed assessment orders passed by the concerned Commissioner on the day the said returns were furnished. However, the Commissioner may, at any time during a period of five years from the date of filing of return, select the deemed assessment order for audit.

1,676


140 100 1,916

14. Earnings per share – basic and diluted Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the year. There is no dilutive effect on the basic earnings per share of the Company.

2012

2011 262,875 25,039 10.50

13. Taxation
Rupees in ‘000 Current Deferred 2012 – 39,125 39,125 2011

Profit for the year – Rupees in ‘000 Number of ordinary shares in ‘000 Earnings per share – basic and diluted in Rupees

276,289 25,039 11.03

161,394 (21,546) 139,848

15. Property, plant and equipment
Rupees in ‘000 Operating assets Capital work in progress 2012 2011 1,092,612 942,963 2,035,575

15.1 15.6

2,369,734 235,009 2,604,743

64

65

15.1 Operating assets
Buildings on Freehold land 43,071 – 43,071 – Leasehold land 10,526 (5,602) 4,924 – freehold land 9,341 (7,556) 1,785 – leasehold land 62,365 (27,381) 34,984 22,164 customers‘ land 20,149 (9,420) 10,729 – Plant and machinery 2,342,348 (1,420,182) 922,166 165,391 Furniture and fittings 19,595 (12,541) 7,054 5,189 Office equipment 65,646 (44,913) 20,733 9,147

15.2 Borrowing costs capitalised during the year amounted to Rs. 44,756 thousand (2011: Rs. 2,103 thousand). 15.3 As at 31 December 2012, plant and machinery included cylinders and Vaccum Insulated Equipments held by third parties, having cost and net book values as follows:
Total 2,619,567 (1,555,735) 1,063,832 233,952 Rupees in ‘000 Cylinders Vaccum insulated equipment 2012 83,929 433,217 517,146 Cost 2011 66,266 341,141 407,407 Net book value 2012 49,827 258,309 308,136 2011 34,824 190,899 225,723

Rupees in ‘000 As at 1 January 2011 Cost Accumulated depreciation Net book value Additions Disposals Cost Accumulated depreciation Write offs Cost Accumulated depreciation

Note

Vehicles 46,526 (28,140) 18,386 32,061

15.4 The details of operating assets disposed off during the year are as follows:
Rupees in ‘000 Motor vehicle Motor vehicle Motor vehicle Motor vehicle Motor vehicle Cost 1,529 725 652 652 835 652 Accumulated depreciation (102) (495) (565) (597) (625) (554) Net book value 1,427 230 87 55 210 98 Sale proceeds 1,529 700 672 196 334 196 Mode of disposal Insurance claim Insurance claim Tender Company policy Company policy Company policy Particulars of purchasers IGI Insurance IGI Insurance Waseem Mirza Rafiqul Hasan (employee) Aamir Razvi (employee) Mazhar Ali (employee)

– – – – – –

– – – – – – (856)

– – – – – – (267)

– – – – – – (3,204)

– – – – – – (970)

(5,358) 5,358 – (20,463) 20,463 – (179,818)

(6,218) 5,350 (868) – – – (9,169)

(3,545) 3,545 – – – – (1,275)

– – – – – – (8,745)

(15,121) 14,253 (868) (20,463) 20,463 – (204,304)

Depreciation Net book value as at 31 December 2011 Additions Disposals Cost Accumulated depreciation Write offs Cost Accumulated depreciation 15.6 15.4



Motor vehicle

43,071 –

4,068 –

1,518 124,347

53,944 –

9,759 –

907,739 1,385,393

40,410 18,390

10,968 8,427

21,135 10,878

1,092,612 1,547,435

15.5 Depreciation has been allocated as follows:
Rupees in ‘000 Cost of sales Distribution and marketing expenses Administrative expenses 2012 246,105 7,819 14,279 268,203 2011 188,826 4,528 10,950 204,304

– – – – – –

– – – – – – (856)

– – – – – – (2,676)

– – – – – – (6,414)

– – – – – – (970)

(6,549) 6,548 (1) (16,930) 16,930 – (231,397)

(10,700) 8,594 (2,106) – – – (12,889) – (2,001) 2,001 – (2,237)

(13,330) 13,330 – (8,580) 8,577 (3) (10,764)

(30,579) 28,472 (2,107) (27,511) 27,508 (3) (268,203)

15.6 Capital work in progress
Advances to suppliers against vehicles 5,874 30,294 (32,061) 4,107 18,947 (18,390) 4,664 Furniture, fittings and office equipment 6,556 15,024 (14,336) 7,244 12,061 (19,305) –

Depreciation Net book value as at 31 December 2012 As at 31 December 2011 Cost Accumulated depreciation Net book value Annual rate of depreciation (%) As at 31 December 2012 Cost Accumulated depreciation Net book value Annual rate of depreciation (%)

15.5



Rupees in ‘000 As at 1 January 2011 Additions during the year Transfer during the year As at 31 December 2011

Land and buildings 18,162 15,221 (22,164) 11,219 113,128 (124,347) –

Plant and machinery 154,853 930,931 (165,391) 920,393 681,002 (1,385,393) 216,002

Intangibles – – – – 14,343 – 14,343

Total 185,445 991,470 (233,952) 942,963 839,481 (1,547,435) 235,009

43,071

3,212

123,189

47,530

8,789

2,061,734

43,805

17,158

21,246

2,369,734

43,071 – 43,071 –

10,526 (6,458) 4,068 5

9,341 (7,823) 1,518 2.5 to 5

84,529 (30,585) 53,944 2.5 to 5

20,149 (10,390) 9,759 2.5 to 5

2,481,918 (1,574,179) 907,739 5 to 10

72,369 (31,959) 40,410 20

21,239 (10,271) 10,968 10

74,793 (53,658) 21,135 20 to 33.33

2,817,935 (1,725,323) 1,092,612

Additions during the year Transfer during the year As at 31 December 2012

43,071 – 43,071 –

10,526 (7,314) 3,212 5

133,688 (10,499) 123,189 2.5 to 5

84,529 (36,999) 47,530 2.5 to 5

20,149 (11,360) 8,789 2.5 to 5

3,843,832 (1,782,098) 2,061,734 5 to 10

80,059 (36,254) 43,805 20

27,665 (10,507) 17,158 10

63,761 (42,515) 21,246 20 to 33.33

4,307,280 (1,937,546) 2,369,734

66

67

16. Net investment in finance lease
Rupees in ‘000 Not later than one year Later than one year and not later than five years Minimum lease payments 2012 14,313 – 14,313 2011 74,054 12,547 86,601 Finance income for future periods 2012 53 – 53 2011 1,752 52 1,804 Principal outstanding 2012 14,260 – 14,260 2011 72,302 12,495 84,797

19. Stock-in-trade
Rupees in ‘000 Raw and packing materials In transit Finished goods In hand In transit 117,248 13,014 130,262 208,695 Note 17.1 21 2012 213 (164) 49 2011 5,074 (4,064) 1,010 81,320 11,435 92,755 155,061 2012 63,557 14,876 78,433 2011 47,766 14,540 62,306

17. Long-term loans (secured, considered good)
Rupees in ‘000 Loans to employees Recoverable within one year shown under current assets

19.1 The cost of raw and packing materials and finished goods has been adjusted net of provision for slow moving and obsolete stock by Rs. 12,252 thousand (2011: Rs. 16,300 thousand).

17.1 Reconciliation of the carrying amount of loans
Rupees in ‘000 Balance at beginning of the year Disbursements Repayments Balance at end of the year 5,074 2,906 (7,767) 213 4,128 6,393 (5,447) 5,074

19.2 Raw and packing materials and finished goods include inventories with a value of Rs. 20,503 thousand (2011: Rs. 3,713 thousand) which are held by third parties.

20. Trade debts (unsecured)
Rupees in ‘000 Considered good Considered doubtful Provision for doubtful debts Note 20.1 2012 203,269 17,470 220,739 (17,470) 203,269 2011 156,553 13,423 169,976 (13,423) 156,553

17.2 These include interest free transport loans and Company loans given to employees (other than executives) in accordance with the terms of employment. These loans are secured against retirement benefits of the employees.

18. Stores and spares
Rupees in ‘000 Stores Spares In transit Provision against slow moving stores and spares 2012 2,778 193,470 5,865 202,113 (85,381) 116,732 2011 2,626 172,490 12,765 187,881 (79,609) 108,272

20.1 These include balances due from related parties as follows
Rupees in ‘000 Atlas Honda Limited International Steel Limited Tabba Heart Hospital 82 15 530 433 1,074 4 1,300 222

68

69

21. Loans and advance (considered good)
Rupees in ‘000 Loans to employees – secured Advances Employees Suppliers 160 18,811 18,971 19,135 1,243 2,993 4,236 8,300 Note 17 2012 164 2011 4,064

25. Issued, subscribed and paid-up share capital
Number of shares 2012 Authorised capital Ordinary shares of Rs. 10 each Issued, subscribed and paid-up capital Ordinary shares of Rs. 10 each fully paid in cash Ordinary shares of Rs. 10 each issued for consideration other than cash Ordinary shares of Rs. 10 each issued as fully paid bonus shares 452,955 672,045 23,913,720 25,038,720 452,955 672,045 23,913,720 25,038,720 4,530 6,720 239,137 250,387 4,530 6,720 239,137 250,387 40,000,000 40,000,000 400,000 400,000 2011 2012 Rupees in ‘000 2011

22. Deposits and prepayments
Rupees in ‘000 Security deposits Other deposits Prepayments 2012 2,640 23,140 27,029 1,249 2011 1,964 18,806 30,948 10,178

At 31 December 2012 and 2011, The BOC Group Limited – U.K., held 15,023,232 ordinary shares of Rs. 10 each of the Company, whose parent company is Linde AG, Germany.

23. Other receivables
Rupees in ‘000 Mark-up income accrued on savings and deposit accounts Receivable from related parties Receivable from staff retirement benefit funds Sales tax recoverable Others 2012 502 – 16,593 22,983 97 40,175 2011 124 2,775 22,463 12,170 1,672 39,204

26. Long-term financing This represents long-term islamic financing arrangement entered into by the Company for an amount of Rs. 1.3 billion to meet specific capital project funding requirements. The loan is repayable in ten half yearly instalments over a period of five years beginning May 2014. One-third portion of the borrowing is fixed at 7 years Pakistan Revaluation (PKRV) + 2.85 % per annum whereas, the remaining two-third of the financing amount is based on 6 month Karachi Interbank Offer Rate (KIBOR) + 0.5 % per annum. The facility is secured against the present and future project assets.

27. Long-term deposits
Rupees in ‘000 Against cylinders Others 2012 127,531 14,055 141,586 These deposits are non-interest bearing and refundable to customers on return of cylinders, and for others upon cancellation of arrangements. 2011 118,674 11,206 129,880

24. Cash and bank balances
Rupees in ‘000 Cash in hand Cash at bank Current and savings accounts Deposit accounts 24.1 232,973 120,000 353,549 124,932 – 125,551 Note 2012 576 2011 619

28. Deferred liabilities
Rupees in ‘000 Deferred taxation Post retirement medical benefits Note 28.1 33.1 2012 199,322 4,870 204,192 2011 162,244 5,071 167,315

24.1 This represents short term bank deposits with terms ranging from one week to one month. The markup on these deposits ranges between 7.00 – 7.50 % per annum.

70

71

28.1 Deferred taxation
Rupees in ‘000 Taxable temporary differences Accelerated tax depreciation Net investment in finance lease Actuarial gain on pension fund Actuarial gain on post retirement medical benefits Deductible temporary differences Slow moving stores and spares and stock-in-trade Post retirement medical benefits Actuarial loss on gratuity Tax losses carried forward Tax credit on certain capital investments Doubtful receivables and other provisions (34,172) (3,123) (9,021) (96,853) (80,311) (14,840) 199,322 (33,568) (2,970) (6,943) – – (17,710) 162,244 421,607 4,991 9,625 1,419 181,922 29,679 10,639 1,195 2012 2011

31. Contingencies and commitments Contingencies 31.1 The Company has disputed the unilateral increase in rentals of one of its leased premises being exorbitant, unreasonable and unjustified. Therefore, a civil suit has been filed against the Lessor. The Court has directed parties to maintain status quo. The amount not acknowledged as debt in this regard as at 31 December 2012 amounted to Rs. 34,307 thousand (2011: Rs. 32,330 thousand). Commitments 31.2 Capital commitments outstanding as at 31 December 2012 amounted to Rs. 753,743 thousand (2011: Rs. 261,398 thousand). 31.3 Commitments under letters of credit for inventory items as at 31 December 2012 amounted to Rs. 48,692 thousand (2011: Rs. 48,623 thousand).

32. Cash generated from operations
Profit before taxation Adjustments for Depreciation
Rupees in ‘000 Note 2012 315,414 268,203 (13,712) (8,922) (1,752) 44,266 639 32.1 188,721 792,857 2011 402,723 204,304 (5,709) (20,724) (4,105) 1,916 891 55,085 634,381

29. Short-term borrowings (secured) The Company has arrangement for short-term running finance facilities from certain banks. The overall facility for these running finances under mark up arrangements and short-term revolving credit amounts to Rs. 283,000 thousand (2011: Rs. 279,000 thousand). The rate of mark-up in the running finance facilities ranges from 1 month KIBOR +1 % to 3 months KIBOR +1 % (2011: ranging from 1 month KIBOR +1 % to 3 months KIBOR +1 %) per annum. The arrangements are secured by way of first pari passu charge against hypothecation of stock in trade and trade debts. The facilities for opening letters of credit and issuing guarantees as at 31 December 2012 amounted to Rs. 737,000 thousand (2011: Rs. 539,000 thousand) of which the amount remaining unutilised as at the year end was Rs. 575,904 thousand (2011: Rs. 231,366 thousand).

Gain on disposal of property, plant and equipment Income on investment on finance lease Finance costs Post retirement medical benefits Working capital changes

Mark-up income from savings and deposit accounts

32.1 Working capital changes
(Increase)/decrease in current assets
Rupees in ‘000 2012 (8,460) (53,634) 58,042 (46,716) (10,835) 3,919 (4,275) (61,959) 250,680 188,721 2011 (7,487) 29,394 (7,280) 12,301 (584) (18,111) (15,151) (6,918) 62,003 55,085

30. Trade and other payables
Rupees in ‘000 Creditors Accrued liabilities Advances from customers Technical assistance fee Payable to staff retirement benefit funds Workers’ profits participation fund Workers’ welfare fund Unclaimed dividends Vendor claims Mark-up payable Other payables 2012 259,781 415,774 26,224 36,532 17,085 2,140 17,390 15,251 24,128 9,484 40,027 863,816 2011 191,637 248,580 26,455 31,533 10,827 2,150 21,816 15,474 22,820 2,103 38,311 611,706

Stores and spares Stock-in-trade Trade debts

Net investment in finance lease Loans and advances Other receivables

Deposits and prepayments

Increase/(decrease) in current liabilities Trade and other payables

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33. Staff retirement benefits The actuarial valuation of pension, gratuity and medical benefit schemes was carried out at 31 December 2012. The projected unit credit method using the significant assumptions, has been used for the actuarial valuation.
Percent % per annum Rate of discount Expected rate of return on investments Expected rate of increase in post retirement benefits Expected rate of increase in future salaries Medical cost escalation rate Pension fund 12 % 12 % 10 % – – Gratuity fund 12 % 12 % – 12 % – Medical scheme 12 % – – – 9%

The actuarial valuation of pension, gratuity and medical benefit schemes was carried out at 31 December 2011. The projected unit credit method using the significant assumptions, has been used for the actuarial valuation.
Percent % per annum Rate of discount Expected rate of return on investments Expected rate of increase in post retirement benefits Expected rate of increase in future salaries Medical cost escalation rate Pension fund 13 % 13 % 11 % – – Gratuity fund 13 % 13 % – 13 % – Medical scheme 13 % – – – 10 %

33.1 The amounts recognised in balance sheet are as follows
Rupees in ‘000 Pension Fund Present value of defined benefit obligation Fair value of plan assets (Asset)/liability in balance sheet Present value of defined benefit obligation – beginning of the year Current service cost Interest cost Actuarial losses/(gains) on obligations Benefits paid Present value of defined benefit obligation – closing date Fair value of plan assets – beginning of the year Expected return on plan assets Actuarial losses Benefits paid Contribution to fund Fair value of plan assets – closing date The following amounts have been charged in the profit and loss account in respect of these benefits Current service cost Interest cost Expected return on plan assets – 6,415 (8,359) (1,944) Actual return on plan assets Expected contributions to funds in the following year Expected benefit payments to retirees in the following year Accumulated actuarial (gains)/losses recognised in equity Percent % per annum Composition of plan assets used by the fund Equity Debt instruments Others Expected return on plan assets used by the fund Expected return on equity Expected return on debt instruments Expected return on others 7% 92 % 1% 13 % 86 % 1% 5,992 (1,680) 3,966 (27,500) 8,811 16,077 (14,977) 9,911 13,019 11,011 12,656 25,773 – 639 – 639 – 566 305 (4,054) 8,811 23,131 (23,336) 8,606 19,011 9,897 16,927 (5,781) 54,297 (68,295) (13,998) 51,135 – 6,415 530 (3,783) 54,297 (66,086) (8,359) 2,367 3,783 – (68,295) Gratuity Fund 110,563 (95,132) 15,431 125,333 8,811 16,077 3,978 (43,636) 110,563 (116,331) (14,977) 1,958 43,636 (9,416) (95,130) Medical Scheme 4,870 – 4,870 5,071 – 639 (640) (200) 4,870 – – – – – –

2012
Total 169,730 (163,427) 6,303 181,539 8,811 23,131 3,868 (47,619) 169,730 (182,417) (23,336) 4,325 47,419 (9,416) (163,425)

Rupees in ‘000 Pension Fund Present value of defined benefit obligation Fair value of plan assets (Asset)/liability in balance sheet Present value of defined benefit obligation – beginning of the year Current service cost Interest cost Actuarial losses/(gains) on obligations Benefits paid Present value of defined benefit obligation – closing date Fair value of plan assets – beginning of the year Expected return on plan assets Actuarial losses Benefits paid Contribution to fund Fair value of plan assets – closing date The following amounts have been charged in the profit and loss account in respect of these benefits Current service cost Interest cost Expected return on plan assets – 6,799 (8,836) (2,037) Actual return on plan assets Expected contributions to funds in the following year Expected benefit payments to retirees in the following year Accumulated actuarial (gains)/losses recognised in equity Percent % per annum Composition of plan assets used by the fund Equity Debt instruments Others Expected return on plan assets used by the fund Expected return on equity Expected return on debt instruments Expected return on others 15 % 13 % 10 % 15 % 13 % 10 % 2% 97 % 1% 6% 93 % 1% 6,926 (1,944) 3,573 (30,399) 7,495 14,273 (14,721) 7,047 14,712 10,210 12,434 19,837 – 891 – 891 – 639 305 (3,414) 51,135 (66,087) (14,952) 48,504 – 6,799 (776) (3,392) 51,135 (62,554) (8,836) 1,910 3,393 – (66,087) Gratuity Fund 125,333 (116,331) 9,002 98,366 7,495 14,273 11,988 (6,789) 125,333 (101,676) (14,721) 9 6,789 (6,732) (116,331) Medical Scheme 5,071 – 5,071 6,334 – 891 (746) (1,408) 5,071 – – – – – –

2011
Total 181,539 (182,418) (879) 153,204 7,495 21,963 10,466 (11,589) 181,539 (164,230) (23,557) 1,919 10,182 (6,732) (182,418)

7,495 21,963 (23,557) 5,901 21,638 8,905 16,312 (13,976)

14 % 12 % 9%

15 % 13 % 10 %

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33.2 Historical information
Rupees in ‘000 Present value of the defined benefit obligation Fair value of plan assets Deficit/(surplus) in the plan Experience (gain)/loss arising on plan liabilities Experience (loss)/gain arising on plan assets 2012 169,730 (163,427) 6,303 4,485 (4,324) 2011 181,539 (182,418) (879) 11,470 (1,919) 2010 153,204 (164,230) (11,026) 2,664 (4,723) 2009 136,240 (153,314) (17,074) (11,784) (1,823) 2008 143,870 (149,997) (6,127) (7,000) (1,637)

34.5 Remuneration paid to non-executive directors are as follows
Rupees in ‘000 Remuneration to Chairman of the Board of Directors Remuneration to Chairman of Board Audit Committee 2012 3,300 792 4,092 2011 3,300 792 4,092

35. Financial risk management The Company’s activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk and price risk), credit risk, liquidity risk and cash flow interest rate risk. The Company’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Company’s financial performance. Risk management is carried out by the management under policies approved by the Board of Directors.

34. Remuneration of chief executive, directors and executives
2012 Executive Director 6,792 4,967 1,724 242 13,725 1 Executive Director 5,669 4,345 1,342 628 11,984 1 2011

Rupees in ‘000 Managerial remuneration Bonus, house rent, utilities, etc Company’s contribution to staff retirement benefits Medical and others Number of persons (including those who worked part of the year)

Chief Executive 11,694 7,941 2,749 42 22,426 1

Executives 63,083 70,298 20,796 2,533 156,710 53

Chief Executive 9,662 5,859 2,231 157 17,909 1

Executives 56,809 69,831 17,968 3,247 147,855 58

35.1 Credit risk Credit risk represents the risk of financial loss that would be recognised at the reporting date if counter parties failed to perform as contracted. The Company’s credit risk is primarily attributable to its receivables and its balances at bank. The credit risk on liquid funds is limited because the counter parties are banks with reasonably high credit ratings. Out of the total financial assets of Rs. 626,694 thousand (2011: Rs. 361,216 thousand), the financial assets which are subject to credit risk amount to Rs. 272,932 thousand (2011: Rs. 230,591 thousand) and the details are as follows:
Rupees in ‘000 Loans to employees Deposits Trade debts Other receivables Cash and bank balances 35.1.2 Note 35.1.1 2012 213 52,471 203,269 17,192 353,549 626,694 2011 5,074 47,004 156,553 27,034 125,551 361,216

34.1 The chief executive, executive director and certain executives of the Company are provided with free use of cars as per terms of employment. Provision in respect of compensated absences is also made and charged in accounts as per the requirements of International Financial Reporting Standards.

34.2 Aggregate amount charged in the financial statements for fee to four non-executive directors was Rs. 682 thousand (2011: four directors – Rs. 528 thousand).

35.1.1 These loans are secured against retirement benefits of the employees.

34.3 In addition to the above, Rs.3,084 thousand (2011: Rs.1,682 thousand), Rs.1,838 thousand (2011: Rs.1,646 thousand) and Rs. Nil (2011: Rs.1,890 thousand) have been charged in respect of chief executive, an executive director and an outgoing executive, respectively, on account of long term incentive plan payable upon completion of qualifying period of service and subject to satisfactory fulfillment of certain performance conditions over such qualifying period and are based on share value of the ultimate parent company. The number of options available under the above scheme are 1,249 (2011: 1,332), and the accrued liability in respect of this benefit amounted to Rs. 12,068 thousand (2011: Rs.11,047 thousand) as at 31 December 2012. 34.4 Professional indemnity insurance cover is available to the directors. The chief executive, executive director and executives are also covered under the group life insurance.

35.1.2 The Company mostly deals with reputable organisations and believes it is not exposed to any major concentration of credit risk. The Company has policies that limit the amount of credit exposure to any customer. Based on the past experience, consideration of financial position, past track records and recoveries, the Company believes that trade debtors past due up to 90 days do not require any impairment. According to the age analysis, trade debts include balances which are due by not later than 90 days valuing Rs. 191,017 thousand (2011: Rs. 39,396 thousand). Trade debts due by more than 90 days amounted to Rs. 12,254 thousand (2011: Rs. 13,730 thousand), net of impairment, as at 31 December 2012. The movement in the allowance for impairment in respect of trade debts is as follows:
Rupees in ‘000 Opening balance Provision/(reversal) for the year Written off during the year Closing balance 2012 13,423 (3,482) 17,470 7,529 2011 22,721 (8,650) (648) 13,423

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35.2 Liquidity risk Liquidity risk is the risk the Company will not be able to meet its financial obligations as they fall due. The Company’s approach to managing liquidity risk is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation. Following are the contractual maturities of the Company’s financial liabilities:
2012 2011 Maturity upto one year – – 791,787 791,787 Maturity after one year 750,000 141,586 – 891,586 Maturity upto one year – – 548,300 548,300 Maturity after one year 200,000 129,880 – 329,880

Significant exchange rates applied during the year in translating foreign currency transactions into Pak Rupee were as follows:
Average rate for the year
Rupees Thai Baht Swiss Franc Euro US Dollar Singapore Dollar Pound Sterling (THB) (CHF) (EUR) (USD) (SGD) (GBP) 2012 3.00 101.41 124.62 94.64 75.94 150.48 2011 – 98.45 121.12 86.61 69.10 139.03

Reporting date spot rate
2012 3.18 107.11 130.81 97.95 80.13 158.27 2011 – 95.82 116.46 89.88 69.32 139.59

Rupees in ‘000 Long-term financing Long-term deposits Trade and other payables

35.3 Market risk a) Foreign exchange risk Foreign exchange 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. Foreign exchange risk arises from future commercial transactions or receivables and payables that exist due to transactions in foreign currencies. The Company is exposed to foreign exchange risk arising from currency exposures. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities, denominated in a currency that is not the Company’s functional currency. The Company ensures that its net exposure is kept to an acceptable level at all times. Further, the Company enters into forward exchange contracts to hedge its foreign currency risk exposures. The significant currency exposure at year end was as follows:
CHF 2012 Financial Assets Investment in finance lease Other receivables Financial liabilities Net exposure Trade and other payables – – (1,680) (1,680) (6,665) (6,665) – (31,375) (35,788) (42,255) (62,407) – 4,677 – 3,812 (417) 13,843 (572) (80,712) 84,225 (61,775) (100,447) (11,838) – (31,375) (35,788) (42,255) (62,407) 2011 2012 THB 2011 2012 Euro 2011 2012 USD 2011 2012 SGD 2011 2012 GBP 2011 2012 Total 2011

Sensitivity analysis A 10 percent depreciation of the Pak Rupee at the year end would have had the following effect on profit and loss:
Effect on profit and loss (net of tax)
Rupees in ‘000 Thai Baht Swiss Franc Euro US Dollar Singapore Dollar Pound Sterling (THB) (CHF) (EUR) (USD) (SGD) (GBP) 2012 (433) – (2,039) (2,747) 304 900 (4,015) 2011 – (109) (2,326) (4,056) 248 5,475 (768)

A 10 percent appreciation of Pak Rupee against the above currencies at 31 December would have had the equal but opposite effect on the amounts shown above, on the basis that all other variables remain constant. b) Interest rate risk Interest rate risk represents the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest/mark-up rates. Sensitivity to interest/mark-up rate risk arises from mismatches of financial assets and liabilities that mature or re-price in a given period. The Company manages these mismatches through risk management strategies where significant changes in gap position can be adjusted. As at the balance sheet date, the interest/profit bearing financial instruments comprised bank balances in savings accounts, and long term financing. The long term financing has been arranged in a manner so that one-third of the financing has a fixed rate. For the remainder two-third of the financing which carries floating rate, a hypothetical change of 100 basis points in interest rates at the balance sheet date would have decreased/(increased) profit for the year by approximately Rs. 2,015 thousand (2011: Rs. Nil) in respect of the variable portion of the long term financing. The analysis assumes that all other variables remain constant. c) Price risk Price risk represents the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk), whether those changes are caused by factors specific to the individual financial instrument or its issuer, or factors affecting all similar financial instruments traded in the market. The Company is not exposed to price risk.

– – –

– – –

– – –

– – –

– – –

– – –

– – –

– – –

– 4,677 4,677

– 3,812 3,812

14,260 – 14,260

84,797 – 84,797

14,260 4,677 18,937

84,797 3,812 88,609

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35.4 Fair values of financial assets and liabilities Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable willing parties in an arm’s length transaction. The carrying values of all financial assets and liabilities reflected in the financial statements approximate their fair values.

37.1 Transactions with related parties are summarised as follows
Rupees in ‘000 Name of relationship The BOC Group Limited (Parent) Nature of transactions Technical assistance fee Final dividend Interim dividend Linde AG (Ultimate parent) Associated Companies Information systems support/maintenance and development Purchase of plant and machinery, plant spares, welding equipments and electrodes, gases and gas cylinders Remote operating charges Shared service centre charges Staff related cost recharged by Group companies Staff related cost recharged to Group companies Related entities by virtue of common directorship Contributions to Staff Provident Fund Contributions to Management Staff Defined Contribution Pension Fund Contributions to Management Staff Pension Fund Contributions to Pakistan Employees’ Gratuity Fund Meeting fee to Directors and remuneration to Non-Executive Directors Sale of goods Donation 36,532 75,116 30,046 34,346 13,921 7,330 8,333 12,687 9,174 24,146 500 11,244 11,608 (1,944) 9,910 4,774 31,533 67,605 30,046 11,442 28,814 5,554 1,037 10,711 13,231 18,894 – 10,341 10,116 (2,037) 7,047 4,620 2012 2011

36. Capital management The Company’s objectives when managing capital are: • • to safeguard the entity’s ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders; and to maintain a strong capital base to support the sustained development of its businesses.

The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Board of Directors also monitors the level of dividends to the ordinary shareholders. The Company is not subject to externally imposed capital requirements.

37. Transactions and balances with related parties The related parties comprise of group companies, entities with common directors, major shareholders, key management employees (included in note 34) and retirement benefit funds. Transactions and balances with related parties and associated undertakings other than those which have been disclosed elsewhere in these financial statements, are given below.

Actuarial gain/(loss) recognised during the period in the Statement of Comprehensive Income on account of
Management Staff Pension Fund Pakistan Employees’ Gratuity Fund

(2,897) (5,935)

(1,134) (11,997)

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81

37.2 Balances with related parties are summarised as follows
Rupees in ‘000 Receivable from associates in respect of trade debts Receivable from associates in respect of other receivables Payable to holding company/associates in respect of trade and other payables Payable to Staff Provident Fund Receivable from Management Staff Defined Contribution Pension Fund Receivable from Management Staff Pension Fund Payable to Employees Gratuity Fund 2012 530 – (86,564) (1,654) 2,595 13,998 (15,431) 2011 1,300 2,775 (51,330) (1,824) 7,511 14,952 (9,002)

39. Accounting estimates and judgements Income taxes In making the estimates for income taxes currently payable by the Company, the management looks at the current income tax law and the decisions of appellate authorities on certain issues in the past.

Provision for slow and non-moving stock The management continuously reviews its inventory for existence of any items which may have become obsolete. These estimates are based on historical experience and are continuously reviewed.

37.3 Sales, purchases and other transactions with related parties are carried out on commercial terms and conditions. The cost of technical assistance fee has been determined on the basis of agreement, duly acknowledged by the State Bank of Pakistan, between the Company and the BOC Group Limited based on an agreed methodology consistently applied. There are no transactions with key management personnel other than under their terms of employment, as disclosed elsewhere in these financial statements. The related party balances as at 31 December 2012 are included in trade debts, other receivables and trade and other payables, respectively. 38. Production capacity
Unit of quantity Oxygen/Nitrogen Hydrogen Dissolved acetylene Nitrous oxide Welding electrodes Carbon dioxide
* Net of normal losses

Staff retirement benefits Certain actuarial assumptions have been adopted as disclosed in these financial statements for valuation of present value of defined benefit obligations and fair value of plan assets. Any changes in the assumptions in future years might effect gains and losses in those years.

Property, plant and equipment The Company estimates the residual values and useful lives of property, plant and equipment. Any changes in these estimates and judgements would have an impact on financial results of next and subsequent years.

Number of shifts Triple shift Triple shift Single shift Triple shift Triple shift Triple shift

Capacity 2012 65,415,000 3,434,000 278,667 39,422,000 2,400 27,850 2011 52,248,000 3,434,000 278,667 39,422,000 2,400 27,850

Actual production* 2012 45,536,178 2,392,714 125,100 18,684,485 – 7,415 2011 45,233,125 2,097,252 136,417 18,168,221 – 8,473

Remarks New plant came on-stream in July Dedicated supply scheme Production is demand driven Production is demand driven Note 38.1 Seasonal demand variation

Cubic meters Cubic meters Cubic meters Gallons Metric tons Metric tons

Trade debts and other receivables Impairment loss against doubtful trade and other debts is made on a judgemental basis, which may differ in future years based on the actual experience. The difference in provision, if any, would be recognised in the future periods.

Impairment of assets In accordance with the accounting policy, the management carries out an annual assessment to ascertain whether any of the Company’s assets are impaired. This assessment may change due to technological developments.

38.1 Since 16 May 2009, the Company has suspended in house production of welding electrodes and the production activity has been outsourced to third party manufacturers.

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Shareholders’ information.

40. Date of authorization These financial statements were authorized for issue on 27 February 2013 by the Board of Directors of the Company.

Stock exchange listing
Linde Pakistan Limited is a public limited company and its shares are traded on all the three stock exchanges of Pakistan. The Company’s shares are quoted in leading dailies under the heading of Chemical sector.

Annual General Meeting
The sixty-fourth Annual General Meeting of the shareholders will be held on 29 April 2013 at 9:00 am at the Company’s Registered Office, West Wharf, Dockyard Road, Karachi. A member entitled to attend, speak and vote at the Annual General Meeting may appoint another Member as a proxy to attend and vote on his/her behalf.

41. Corresponding figures Corresponding figures have been rearranged and reclassified, wherever necessary for the purposes of comparison and better presentation.

42. Non adjusting events after the balance sheet The Board of Directors in its meeting held on 27 February 2013 a) approved the transfer of Rs. 95,693 thousand from unappropriated profit to general reserve; and b) proposed a final dividend of Rs. 5 per share for the year ended 31 December 2012, amounting to Rs. 125,194 thousand for approval of the members at the Annual General Meeting to be held on 29 April 2013.

Market capitalization and market price of Linde share
Market capitalization As at 31 December 2012, the market capitalization of Linde Share stood at Rs. 3.84 billion with a market value of Rs. 153.49 per share and breakup value of Rs. 67.05 per share. The 51.97 % increase in the value of the shares compared to last year reflects the confidence of our members on the healthy performance and steady progress of the Company. Market Price Share Highest price per share during the year Lowest price per share during the year Closing price per share at year-end

Investor relations contact
Mr Wakil Ahmed Khan Manager – Corporate Services Phone +92.21.32316914 Email wakil.khan@linde.com In compliance with the requirements of Section 204(A) of the Companies Ordinance of 1984, Central Depository Company of Pakistan Limited (CDC) acts as an Independent Share Registrar of the Company. Enquiries concerning lost share certificates, dividend payment, change of address, verification of transfer deeds and share transfers may please be addressed to CDC at: Central Depository Company of Pakistan CDC House, 99-B, Block ‘B’, S.M.C.H.S. Main Shahrah-e-Faisal, Karachi – 74400 Phone + 92.21.111-111-500 Fax + 92.21.34326031 Timings 9:00 am to 1:00 pm and from 2:30 pm to 4:30 pm (Monday to Friday) Email info@cdcpak.com

Yousuf Husain Mirza Chief Executive

Munnawar Hamid – OBE Chairman

Rs. 167.00 Rs. 97.04 Rs. 153.49

Financial calendar
The Company follows the period of January 01 to December 31 as the Financial Year. Financial Results during the year 2013 will be announced as per the following tentative schedule: 1st quarter ending 31 March 2013 2nd quarter ending 30 June 2013 3rd quarter ending 30 September 2013 Year ending 31 December 2013 April 2013 August 2013 October 2013 February 2014

Public information
Financial analysts, stock brokers and interested investors desiring financial statements of the Company may visit our website at www.linde.pk

Announcements of the Financial Results were made during the year 2012 are as follows: 1st quarter ended 31 March 2012 2nd quarter ended 30 June 2012 3rd quarter ended 30 September 2012 Year ended 31 December 2012 25 April 2012 10 August 2012 25 October 2012 27 February 2013

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Pattern of shareholdings.

As at 31 December 2012 Number of shareholders from 482 435 252 357 92 37 25 18 9 8 9 8 1 2 1 1 4 1 2 2 1 1 1 1 1 1 1 1 1,754 1 101 501 1,001 5,001 10,001 15,001 20,001 25,001 30,001 35,001 40,001 45,001 50,001 55,001 75,001 80,001 85,001 90,001 155,001 250,001 305,001 375,001 515,001 600,001 965,001 1,390,001 15,015,001 – – – – – – – – – – – – – – – – – – – – – – – – – – – – Shareholdings to 100 500 1,000 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 55,000 60,000 80,000 85,000 90,000 95,000 160,000 255,000 310,000 380,000 520,000 605,000 970,000 1,395,000 15,020,000 19,469 134,462 206,245 889,157 656,933 458,298 437,825 408,962 245,727 263,566 344,704 337,942 46,102 104,952 55,360 78,787 327,402 88,428 183,020 316,000 252,689 308,400 380,000 515,585 600,343 967,341 1,392,791 15,018,230 25,038,720 Shareholders holding 5 % or more voting interest The BOC Group Limited and its 4 nominees* State life insurance corporation of Pakistan
* Represents the 60 % shareholding of The BOC Group Limited, U.K. and includes its four nominee shareholders. ** Mr Towfiq Habib Chinoy, Director, purchased 22,770 shares of the Company during the year.

As at 31 December 2012 Categories of shareholders Associated companies, undertakings and related parties The BOC Group Limited and its 4 nominees * Directors and their spouse(s) and minor children Mr Towfiq Habib Chinoy ** Mrs Zeenat Towfiq Chinoy W/o Mr T H Chinoy Executives Public sector companies and corporations Banks, development finance institutions, non-banking finance Companies, insurance companies, takaful, modarabas and pension funds Mutual funds General public a. Local b. Foreign Others Total 1,663 5 57 1,754 4,182,777 1,083,995 844,927 25,038,720 16.71 4.33 3.37 100.00 14 – 864,137 – 3.45 – 1 1 – 8 40,270 21,580 – 2,977,802 0.16 0.09 – 11.89 5 15,023,232 60.00 Number of shareholders Shares held Percentage

Total Number of shares held

5 1

15,023,232 1,392,791

60.00 5.56

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Notice of Annual General Meeting.

Notice is hereby given that the Sixty-fourth Annual General Meeting of Linde Pakistan Limited will be held on Monday, 29 April 2013 at 9:00 a.m. at the Company’s Registered Office, West Wharf, Dockyard Road, Karachi to transact the following business: Ordinary business: 1. To receive and consider the Financial Statements of the Company for the year ended 31 December 2012 and Reports of the Directors and Auditors thereon. 2. To consider and, if thought fit, to authorise the payment of final dividend of Rs. 5.00 per ordinary share of Rs. 10/= each for the year ended 31 December 2012 as recommended by the Directors of the Company, payable to those Members whose names appear on the Register of Members as at the close of business on 15 April 2013. 3. To appoint the Auditors of the Company and to fix their remuneration. Special business: 4. To amend Article 73 of the Articles of Association of the Company and for this purpose to pass the following resolution as a Special Resolution: RESOLvED as and by way of a Special Resolution THAT the Articles of Association of the Company be altered by substituting for Article 73, the following new Article 73: Qualification of Directors 73. The qualification of an elected Director, in addition to his being a Member, where required, shall be his holding shares of the nominal value of Rs. 500 at least in his own name, but a Director representing the interests of a Member or Members holding shares of the nominal value of Rs. 500 at least shall require no such share qualification. A Director shall not be qualified as representing the interests of a Member or Members holding shares of the requisite value unless he is appointed as such representative by the Member or Members concerned by notice in writing addressed to the Company specifying the shares of the requisite value appropriated for qualifying such Director. Shares thus appropriated for qualifying a Director shall not, while he continues to be such representative, be appropriated for qualifying any other Director. A Director shall acquire his share qualification within two months from the effective date of his appointment.

Notes
1. Transport will be provided to members of the Company from the Parking Area of the Karachi Stock Exchange at Railway premises, Tower and departure will be at 8:15 a.m. sharp on 29 April 2013. 2. The Share Transfer Books of the Company will be closed from 16 April to 29 April 2013 (both days inclusive). 3. A member entitled to attend, speak and vote at the Annual General Meeting may appoint a proxy to attend and vote on his/her behalf and a proxy so appointed shall have the same rights in respect of speaking and voting at the meeting as are available to a Member. Proxies in order to be effective must be received at the Registered Office of the Company not later than 48 hours before the time of the meeting. The proxy must be a member of the Company, except that a Corporation being a member of the Company may appoint as its proxy one of the officers or some other person though not a member of the Company. 4. Members are requested to immediately notify any change in their address or bank mandate as registered to the Company’s Share Registrar, Central Depository Company of Pakistan Limited, Shares Registrar Department, CDC House, 99-B, Block-B, S.M.C.H.S., Main Shahrah-eFaisal, Karachi – 74400. 5. CDC Account Holders will further have to follow the under mentioned guidelines as laid down in Circular 1, dated 26 January 2000 issued by the Securities and Exchange Commission of Pakistan:

A. For attending the meeting: • In case of individuals, the account holder or sub-account holder and/or the person whose securities are in group account and their registration details are uploaded as per the Regulations, shall authenticate his/her identity by showing his/her original Computerized National Identity Card (CNIC) or original passport at the time of attending the meeting. • In case of corporate entity, 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.

Statement under section 160(1)(b) of the Companies Ordinance 1984 This statement sets out the material facts concerning the Special Business to be transacted at the Annual General Meeting of the Company to be held on Monday, 29 April 2013. “Agenda No. 4 Alteration to Article 73 of the Articles of Association of the Company: The new Code of Corporate Governance 2012 requires that the board of directors of each listed company shall have at least one and preferably one third of the total members of the board of directors as independent directors. As such in order to facilitate the appointment and election of independent directors, the Board of Directors of the Company have felt it appropriate to amend the provision relating to share qualification of Directors in the Company’s Articles of Association. Accordingly the Board of Directors have recommended that the share qualification of directors appearing in the Company’s Articles of Association be revised from the nominal value of Rs. 100,000 to the nominal value of Rs. 500 and in this regard Article 73 of the Articles of Association be amended and substituted by a new Article 73.” The resolution required for the above purpose is set forth at item No. 4 in the notice convening the Annual General Meeting and that resolution will be proposed and passed as and by way of a Special Resolution.

B. For appointing proxies: • In case of individuals, the account holder or sub-account holder and/or the person whose securities are in group account and their registration details are uploaded as per the Regulations, shall submit the proxy form as per the above requirement. • The proxy form shall be witnessed by two persons whose names, addresses and NIC numbers shall be mentioned on the form. • Attested copies of CNIC or the passport of the beneficial owners and the proxy shall be furnished with the proxy form. • The proxy shall produce his/her original CNIC or original passport at the time of the meeting. • In case of corporate entity, 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.

By Order of the Board Karachi 20 March 2013 M Ashraf Bawany Deputy Managing Director

88

Form of proxy. Annual General Meeting.

I/We of of hereby appoint of as my/our proxy, and failing him/her, of
Directors at 63rd Annual General Meeting

in the district being a Member of Linde Pakistan Limited,

another Member of the Company to vote for me/us and on my/our behalf at the Annual General Meeting of the Company to be held on the 29 April 2013 and at any adjournment thereof. As witness my/our hand/seal this Signed by the said In the presence of: 1. Signature Name Address CNIC or Passport No. 2. Signature Name Address CNIC or Passport No. day of 2013.

Folio/CDC Account No.

Signature on Revenue Stamp of Rs. 10/-

Shareholders at 63rd Annual General Meeting

This signature should agree with the specimen registered with the Company

Important
1. This Proxy Form, duly completed and signed, must be received at the Registered Office of the Company, West Wharf, Dockyard Road, Karachi not less than 48 hours before the time of holding the meeting. 2. No person shall act as proxy unless he himself/herself is a member of the Company, except that a corporation may appoint a person who is not a member. 3. If a member appoints more than one proxy and more than one instruments of proxy are deposited by a member with the Company, all such instruments of proxy shall be rendered invalid. For CDC account holders/corporate entities In addition to the above the following requirements have to be met: a) The proxy form shall be witnessed by two persons whose names, addresses and CNIC numbers shall be mentioned on the form. b) Attested copies of CNIC or the passport of the beneficial owners and the proxy shall be furnished with the proxy form. c) The proxy shall produce his/her original CNIC or original passport at the time of the meeting. d) In case of corporate entity, 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.

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