Вы находитесь на странице: 1из 64

CONTENTS

Company Information Core Values Our Equities and Initiatives Notice of Annual General Meeting Financial Summary Directors Report Statement of Value Added Statement of Compliance with the Code of Corporate Governance Review Report to the Members on Statement of Compliance with best Practices of Code of Corporate Governance Auditors Report to the Members Balance Sheet Profit and Loss Account Statement of Changes in Equity Cash Flow Statement Notes to and Forming Part of the Financial Statements Pattern of Shareholding Operating and Financial Highlights Form of Proxy
1

2 3 4 10 12 13 17 18 20

21 22 23 24 25 26 56 58

COMPANY INFORMATION
BOARD OF DIRECTORS Iqbal Ali Lakhani Amin Mohammed Lakhani Tasleemuddin Ahmed Batlay Jerome Graham Webb Derrick Samuel A. Aziz H. Ebrahim Zulfiqar Ali Lakhani ADVISOR Sultan Ali Lakhani AUDIT COMMITTEE Iqbal Ali Lakhani Amin Mohammed Lakhani Tasleemuddin Ahmed Batlay COMPANY SECRETARY Mansoor Ahmed AUDITORS A. F. Ferguson & Co. Chartered Accountants INTERNAL AUDITORS BDO Ebrahim & Co. Chartered Accountants REGISTERED OFFICE Lakson Square, Building No. 2, Sarwar Shaheed Road, Karachi-74200 Pakistan SHARES REGISTRAR FAMCO Associates (Private) Limited State Life Building No. 1-A, 1st Floor, I.I. Chundrigar Road, Karachi. FACTORIES G-6, S.I.T.E., Kotri District Jamshoro (Sindh) 217, Sundar Industrial Estate Raiwind Road, Lahore WEBSITE www.colgate.com.pk Chairman Chairman

Chief Executive

NOTICE OF ANNUAL GENERAL MEETING


NOTICE IS HEREBY GIVEN that the 33rd Annual General Meeting of COLGATE-PALMOLIVE (PAKISTAN) LIMITED will be held on Monday, September 12, 2011 at 10:00 a.m. at Avari Towers Hotel, Fatima Jinnah Road, Karachi to transact the following business: ORDINARY BUSINESS 1. To receive, consider and adopt the audited financial statements for the year ended June 30, 2011 together with the Directors' and Auditors' Reports thereon. 2. To declare final dividend in cash @ 140% i.e. Rs.14 per share of Rs.10 each and by way of issue of fully paid bonus shares @ 15% i.e. in the proportion of three shares for every twenty shares held by the members as recommended by the Board of Directors. 3. To appoint auditors and fix their remuneration. SPECIAL BUSINESS 4. To consider, subject to declaration of the final dividend as above, capitalization of a sum of Rs.47,386,290 by way of issue of 4,738,629 fully paid bonus shares of Rs.10 each and if thought fit to pass an ordinary resolution in the matter. A statement under section 160 of the Companies Ordinance, 1984 in the above matter including draft of the ordinary resolution to be passed pertaining to item No. 4 is annexed. By Order of the Board

KARACHI: August 12, 2011 NOTES:

MANSOOR AHMED Company Secretary

1. The share transfer books of the Company will remain closed from September 06, 2011 to September 12, 2011, both days inclusive. Transfers received in order by the Shares Registrar of the Company M/s. FAMCO Associates (Private) Limited, State Life Building No.1-A, 1st Floor, I.I.Chundrigar Road, Karachi upto September 05, 2011 will be considered in time for entitlement of the dividend and bonus shares. 2. A member who has deposited his/her shares into Central Depository Company of Pakistan Limited, must bring his/her participant's ID number and account/sub-account number alongwith original Computerized National Identity Card (CNIC) or original Passport at the time of attending the meeting. 3. A member entitled to attend and vote at the general meeting may appoint another member as his/her proxy to attend, speak and vote instead of him/her. 4. Forms of proxy to be valid must be properly filled-in/executed and received at the Company's Registered Office at Lakson Square, Building No.2, Sarwar Shaheed Road, Karachi not later than 48 hours before the time of the meeting. 5. Members are requested to notify the Shares Registrar of the Company promptly of any change in their addresses. 6. Members who have not yet submitted photocopy of their Computerized National Identity Cards (CNIC) are requested to send the same to our Shares Registrar at the earliest. 7. Form of Proxy is enclosed herewith. 10

STATEMENT UNDER SECTION 160 OF THE COMPANIES ORDINANCE, 1984 PERTAINING TO ITEM NO.4 The Board of Directors has recommended to the members of the Company to declare final dividend in cash @ 140% and by way of issue of fully paid bonus shares @ 15% for the year ended June 30, 2011. Subject to approval of the Board of Directors' recommendation as above, the resolution as under will be considered to be passed by the members as an ordinary resolution: "RESOLVED THAT: i) a sum of Rs.47,386,290 out of the profit for the year ended June 30, 2011 be capitalized and applied in making payment in full of 4,738,629 ordinary shares of Rs.10 each and that the said shares be allotted as fully paid up bonus shares to those members of the Company whose names appear in the register of members on September 12, 2011 @ 15% i.e. in the proportion of 3 shares for every 20 existing shares held by the members and that such new shares shall rank pari passu in all respects with the existing ordinary shares of the Company, however, they will not qualify for the final cash dividend declared for the year ended June 30, 2011; in the event of any member holding less than 20 shares or a number of shares which is not an exact multiple of 20, the fractional entitlements of shares of such members shall be consolidated into whole new shares and the Directors of the Company be and are hereby authorized to arrange sale of the shares constituted thereby in such manner as they may think fit and to pay the proceeds of the sale to such of the members according to their entitlement;

ii)

iii) for the purpose of giving effect to the above, the Directors be and are hereby authorized to take all necessary steps in the matter and to settle any question or difficulties that may arise in regard to the distribution of the said new shares as they think fit." The Directors are interested in this business only to the extent of their entitlement of dividends and bonus shares as ordinary shareholders.

11

FINANCIAL SUMMARY
Year Ended June 30, 2011

Gross sales Rs in million 20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 2009 2010 2011 13,995 14,584 18,132 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500

Shareholders' equity Rs in million

Earnings Per Share Rupees

4,374 3,577 40.00 35.00 2,700 30.00 25.00 20.00 15.00 10.00 5.00 2009 2010 2011 2009 2010 2011 23.74 36.45 36.95

Year ended June 30


Rupees in million except EPS Gross Sales Operating Income Net Profit After Tax Earnings per share - restated (Rs.) Shareholders' Equity 2009 13,995 1,195 750 23.74 2,700 2010 14,584 1,775 1,152 36.45 3,577 % Change 4.2% 48.5% 53.6% 53.5% 32.5% 2011 18,132 1,796 1,167 36.95 4,374 % Change 24.3% 1.2% 1.4% 1.4% 22.3%

12

DIRECTORS REPORT
The Directors are pleased to present the Annual Report with the audited financial statements of the Company for the year ended June 30, 2011. OPERATING RESULTS Revenue: During the year ended June 30, 2011, Company's gross and net revenue increased by 24.3% and 22.7% respectively, attributed by strong volume growth across all categories. Gross Profit: Gross profit remained under pressure, and dropped by 3.80 percent compared to last year (2011: 29.4%; 2010: 33.2%) due to higher raw material prices, energy costs and freight charges. Additionally during the year, depreciation increased by 40.8 percent due to major capital investments in plant and machinery. Despite substantial increase in manufacturing cost and reduction in gross profit percentage, Company's gross profit increased in absolute terms by 8.6%, mainly due to strong volume growth. Selective price increases during the year enabled the Company to support brand margins. However, due to tough market conditions, this increase was not sufficient to fully offset the effect of the rising costs. Other Overheads: In spite of various challenges which included acute electricity shortages, deteriorating law and order situation and a fragile economy, the Company 's management has been successful in reducing overall 'selling and distribution costs' (2011: 14.9%; 2010: 16.0%) and 'administrative expenses' (2011: 1.1%; 2010: 1.2%), in terms of percentage to net sales. This has been achieved through continual improvement of controls as well as prudent spending. In absolute terms, 'selling and distribution costs' and 'administrative expenses' increased by 14.6% and 11.1% respectively. This increase is noticeably on a lower side compared to persistent inflationary pressures. In 'selling and distribution costs', freight expenses have shown a major increase, mainly due to increased sales volume of the Company coupled with increased fuel prices. To defend and sustain this increased volume, and to consolidate market share of our brands, Company's advertising and sales promotion expenses are also on the rise. Operating Profit & NPAT: Company's operating profit and net profit increased by 1.2% and 1.4% respectively. Earnings per Share also increased marginally by 1.4% from Rs.36.45 in prior year to Rs.36.95 in current year. A brief financial analysis is presented as under: Operating Results Gross Revenue Net Revenue Gross Profit Gross Profit % Operating Profit Profit After Tax Profit After Tax (% to sale) Earnings per Share - Rupees 2010-11 Rs. in million 18,132 14,150 4,161 29.4% 1,796 1,167 8.2% 36.95 2009-10 Rs. in million 14,584 11,529 3,830 33.2% 1,775 1,152 10.0% 36.45 Increased By 24.3% 22.7% 8.6% -3.80% 1.2% 1.4% -1.80% 1.4% 13

Profit and Appropriations

2010-11 Rs. in thousand 1,167,380 6,930 1,174,310

Profit After Tax Un-appropriated profit brought forward Profit available for appropriation Appropriations: Proposed Cash Dividend @ 140% i.e. Rs.14.00 per share (2010; @ 135% i.e. Rs. 13.50 per share). Reserve for proposed issue of bonus shares @ of 15% i.e., 3 shares for every 20 shares (2010; @ 15% i.e. 3 shares for every 20 shares). Transfer to General Reserve Un-appropriated profit carried forward CASH FLOWS

442,273

47,386 680,000 4,651

During the year, net cash and bank balances dropped by Rs.469 million mainly due to capital expending on plant & machinery and increased working capital requirement. A significant proportion of the investment was financed through internal cash generation. HUMAN RESOURCES The Company offers its employees training courses on a continual basis and also offers them the opportunity to receive training in other Colgate Subsidiaries. STRIVING TOWARDS A HEALTHIER SOCIETY----------- CSR The Company continued with its efforts for the betterment of the community as a whole by sponsoring various events throughout the year. In order to increase awareness about oral health and hygiene, specialized oral health programs such as 'Bright Smile Bright Future' have continued. An additional oral care health program "Seekho aur Jeeto Scholarship" was introduced with the objective of increasing awareness of Oral Hygiene by educating youth on healthy oral care tips, whereby every entrant gets a chance to win a Colgate Scholarship. Towards honoring its corporate social responsibility, the Company had actively participated and contributed for the relief efforts of "Flood Victims" as well as for internally displaced persons (IDPs). RECOGNITION For the 6th time, Company's achievements and overall performance have been recognized by the Management Association of Pakistan and was awarded "Corporate Excellence Award" at the 27th Corporate Excellence Award Ceremony. The Karachi Stock Exchange also recognized your Company's performance in the financial year under report and was among the recipients of 'Top 25 Companies Awards'. This is the 5th consecutive time that the Company has been presented this award. This shows management's continued commitment and dedication in achieving the desired operating results and in promoting the Company's image and goodwill.

14

CHALLENGES AND PROSPECTS Although Company has registered a strong growth with respect to volumes during the current year, pressures on Company's gross margins are likely to intensify in light of further expected increase in raw material prices. Power outages will remain a big challenge to the progress of the manufacturing sector in Pakistan. Persistent inflation and increasing unemployment impacting disposable income will also be factors to reckon with. All these above factors are likely to adversely affect the results of the Company during the ensuing financial year. However, management of your company remains to be committed to overcoming above challenges through sharp focus on assessing the needs of our consumers and bringing improved operational efficiencies and synergies through optimization of capital investments undertaken during the current year. Continued focus on product quality & innovation and developing & enhancing our volume base through aggressive marketing programs will remain our core objective in the ensuing year. The management remains focused to achieve these objectives through integration of all business strategies along with efficient cost curtailing measures. CORPORATE AND FINANCIAL REPORTING FRAMEWORK The Directors are pleased to state that the Company is compliant with the provisions of the Code of Corporate Governance as required by Securities & Exchange Commission of Pakistan (SECP). Following are the statements on Corporate and Financial Reporting Frame Work:

The financial statements prepared by the management of the Company, accurately present its state of affairs, the results of its operations, its cash flows and its changes in equity. The Company has maintained proper books of accounts. Appropriate accounting policies have been consistently applied in preparation of financial statements and accounting estimates are based on reasonable and prudent judgment. In preparation of these financial statements, International Accounting Standards, as applicable in Pakistan, have been followed. The system of internal control is sound in design. The system is being continuously monitored by an Internal Audit function and through other such monitoring procedures. The process of monitoring Internal Controls will continue as an ongoing process with the objective to further strengthen the controls and bring in improvements in the system. There are no doubts upon the Company's ability to continue as a going concern. There has been no material departure from the best practices of corporate governance, as detailed in the listing regulations. The summary of key operating and financial data of the Company of the last six years is annexed in this report. Information about taxes and levies is given in the notes to the accounts. The valuation of investment made by the staff retirement benefit funds based on their respective accounts are as follows: 2010-11 Rs. in million Provident Fund Gratuity Fund 298.717 107.068 15

The board held four (4) meetings during the year. Attendance by each Director was as follows: Mr. Iqbal Ali Lakhani Mr. Zulfiqar Ali Lakhani Mr. Amin Mohammed Lakhani Mr. Tasleemuddin Ahmed Batlay Mr. A. Aziz Ebrahim Mr. Jerome Graham Webb Mr. Derrick Samuel Attendance 3 4 2 4 3 3 3

Nominee of CP-USA Nominee of CP-USA

Leave of absence was granted to directors who could not attend some of the Board meetings.

AUDITORS The Auditors, Messrs A. F. Ferguson & Co., Chartered Accountants, retire at the conclusion of the 33rd Annual General Meeting. Bieng eligible, they have offered themselves for re-appointment. PATTERN OF SHAREHOLDINGS A statement showing pattern of shareholding of the Company and additional information as at June 30, 2011 is included in the report. ACKNOWLEDGMENTS We take pleasure by thanking members of the management, other employees and staff for their continued commitment to the success of the Company. We also value the support and cooperation of our customers, suppliers, bankers and all stakeholders and wish to record our thanks and gratitude.

On behalf of Board of Directors

Karachi: July 28, 2011

IQBAL ALI LAKHANI Chairman

16

STATEMENT OF VALUE ADDED


Year Ended June 30 2011 2010 (Rs. in million) Wealth Generated Total revenue net of discount and allowances Bought-in-material and services 17,218 11,610 5,608 13,879 9,169 4,710

Wealth Distributed To Employees Salaries, benefits and other costs To Government Income tax, sales tax To Providers of Capital Dividend to shareholders Mark up/interest expenses on borrowed funds Retained for Reinvestment and Growth Depreciation and Retained Profits

638 3,612 489 12 857 5,608

547 2,873 412 11 867 4,710

64.4% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0%

15.3% 11.4% 8.7% 0.2%

To Government

Depreciation & Retained Profit

To Employees

To Shareholders

To Lenders

17

STATEMENT OF COMPLIANCE WITH THE CODE OF CORPORATE GOVERNANCE


FOR THE YEAR ENDED JUNE 30, 2011 This statement is being presented to comply with the Code of Corporate Governance (Code) contained in listing regulations of Karachi and Lahore Stock Exchanges 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 Code in the following manner: 1. The Board comprises of seven directors including two executive directors. The Company encourages the representation of independent non-executive directors on its board. There are five non-executive directors, one of them is the chairman, while two represent the joint venture Company and the remaining two are non-executive. The directors have confirmed that none of them is serving as a director in more than ten listed companies, including this Company. 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. No casual vacancy occurred in the Board during the current year. The Company has prepared a 'Statement of Ethics and Business Practices', which has been signed by all the directors and employees of the Company at the time of joining and subsequently confirmed by the departmental heads. The Board has developed a vision/mission statement, and significant policies of the Company as part of overall corporate strategy. A complete record of particulars of significant policies alongwith the dates on which they were approved or amended has been maintained. All the powers of the Board have been duly exercised and decisions on material transactions, including appointment and determination of remuneration and terms and conditions of employment of the CEO and other executive director, have been taken by the Board. The meetings of the Board were presided over by the Chairman and, in his absence, by a director elected by the Board for this purpose and the Board met at least once in every quarter. Written notices of the Board meetings, alongwith agenda and working papers, were circulated at least seven days before the meetings. The minutes of the meetings were appropriately recorded and circulated. In compliance of the clause No. xiv of the Code of Corporate Governance of the amended Listing Regulations of the Stock Exchanges, this year one of the Director of the Company Mr. Tasleemuddin A. Batlay has participated in the Corporate Governance Leadership Skill Program -part- I for the Certification of Directors under 'the Board Development Series' Program managed by the Pakistan Institute of Corporate Governance (PICG). The Board also arranged one orientation course for its directors during the year to apprise them of their duties and responsibilities and briefed them regarding amendments in the Companies Ordinance/Corporate Laws.

2. 3. 4. 5.

6.

7.

8.

9.

10. The Chief Financial Officer was appointed prior to the implementation of the Code of Corporate Governance. The remuneration and terms & conditions in case of future appointment on this position will be approved by the Board. Mr. Mansoor Ahmed was assigned the responsibilities of Company Secretary of Colgate-Palmolive (Pakistan) Limited in addition to his responsibilities in other Group Companies. Internal Audit function of the Company was outsourced with the approval of the Board. 11. The directors' report for this year has been prepared in compliance with the requirements of the Code and fully describes the salient matters required to be disclosed. 18

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 Code. 15. The Board has formed an audit committee. It comprises of two non-executive directors and one executive director. The Chairman of the committee is a non-execute director. 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. The terms of reference of the committee have been formed and advised to the committee for compliance. 17. The Board has outsourced internal audit function of the Company to a firm of Chartered Accountants. 18. The statutory auditors of the Company have confirmed that they have been given a satisfactory rating under the quality control review programme of the Institute of Chartered Accountants of Pakistan, that they or any of the partners of the firm, their spouses and minor children do not hold shares of the Company and that the firm and all its partners are in compliance with International Federation of Accountants (IFAC) guidelines on code of ethics as adopted by Institute of Chartered Accountants of Pakistan. 19. 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. 20. The related party transactions have been placed before the audit committee and approved by the Board of Directors with necessary justification for non arm's length transactions and pricing methods for transactions that were made on terms equivalent to those that prevail in the arm's length transactions only if such terms can be substantiated. 21. We confirm that all other material principles contained in the Code have been complied with.

Zulfiqar Ali Lakhani Chief Executive

Tasleemuddin Ahmed Batlay Director

Karachi: July 28, 2011

19

A. F. FERGUSON & CO. REVIEW REPORT TO THE MEMBERS ON STATEMENT OF COMPLIANCE WITH BEST PRACTICES OF CODE OF CORPORATE GOVERNANCE
We have reviewed the Statement of Compliance with the best practices contained in the Code of Corporate Governance for the year ended June 30, 2011 prepared by the Board of Directors of Colgate-Palmolive (Pakistan) Limited (the company) to comply with the Listing Regulation No. 35 of the Karachi and Lahore Stock Exchanges where the company is listed. The responsibility for compliance with the Code of Corporate Governance is that of the Board of Directors of the company. Our responsibility is to review, to the extent where such compliance can be objectively verified, whether the Statement of Compliance reflects the status of the company's compliance with the provisions of the Code of Corporate Governance and report if it does not. A review is limited primarily to inquiries of the company's personnel and review of various documents prepared by the company to comply with the Code. As part of our audit of financial statements we are required to obtain an understanding of the accounting and internal control systems sufficient to plan the audit and develop an effective audit approach. We have not carried out any special review of the internal control system to enable us to express an opinion as to whether the Board's statement on internal control covers all controls and the effectiveness of such internal controls. Further, Sub-Regulation (xiii a) of Listing Regulation No. 35 of Karachi and Lahore Stock Exchanges requires the company to place before the Board of Directors for their consideration and approval related party transactions distinguishing between transactions carried out on terms equivalent to those that prevail in arm's length transactions and transactions which are not executed at arm's length price recording proper justification for using such alternate pricing mechanism. Further, all such transactions are also required to be separately placed before the audit committee. We are only required to check the approval of the related party transactions by the Board of Directors and placement of such transactions before the audit committee. We have not carried out any procedures to determine whether the related party transactions were undertaken at arm's length price or not. Based on our review, nothing has come to our attention which causes us to believe that the Statement of Compliance does not appropriately reflect the status of the company's compliance, in all material respects, with the best practices contained in the Code of Corporate Governance as applicable to the company for the year ended June 30, 2011.

Karachi, July 28, 2011

A.F. FERGUSON & CO. Chartered Accountants

A. F. FERGUSON & CO., Chartered Accountants, a member firm of the PwC network State Life Building No. 1-C, I.I Chundrigar Road, P.O. Box 4716, Karachi-74000, Pakistan Tel: +92 (21) 32426682-6/32426711-5; Fax: +92 (21) 32415007/32427938; <www.pwc.com/pk>
Lahore: 23-C, Aziz Avenue, Canal Bank, Gulberg V, P.O.Box 39, Shahrah-e-Quaid-e-Azam, Lahore-54660, Tel: +92 (42) 35715864-71; Fax: +92 (42) 35715872 Islamabad: PIA Building, 3rd Floor, 49 Blue Area, Fazl-ul-Haq Road, P.O.Box 3021, Islamabad-44000; Tel: +92 (51) 2273457-60; Fax: +92 (51) 2277924 Kabul: House No. 1916, Street No. 1, Behind Cinema Bariqot, Nahar-e-Darsan, Karte-4, Kabul, Afghanistan; Tel: +93 (779) 315320, +93 (799) 315320

20

A. F. FERGUSON & CO.

AUDITORS' REPORT TO THE MEMBERS


We have audited the annexed balance sheet of Colgate-Palmolive (Pakistan) Limited as at June 30, 2011 and the related profit and loss account, statement of changes in equity and cash flow statement together with the notes forming part thereof, for the year then ended and we state that we have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purposes of our audit. It is the responsibility of the company's management to establish and maintain a system of internal control, and prepare and present the above said statements in conformity with the approved accounting standards and the requirements of the Companies Ordinance, 1984. Our responsibility is to express an opinion on these statements based on our audit. We conducted our audit in accordance with the auditing standards as applicable in Pakistan. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the above said statements are free of any material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the above said statements. An audit also includes assessing the accounting policies and significant estimates made by management, as well as, evaluating the overall presentation of the above said statements. We believe that our audit provides a reasonable basis for our opinion and, after due verification, we report that(a) (b) in our opinion, proper books of account have been kept by the company as required by the Companies Ordinance, 1984; in our opinion(i) the balance sheet and profit and loss account together with the notes thereon have been drawn up in conformity with the Companies Ordinance, 1984, and are in agreement with the books of account and are further in accordance with accounting policies consistently applied; the expenditure incurred during the year was for the purpose of the company's business; and

(ii)

(iii) the business conducted, investments made and the expenditure incurred during the year were in accordance with the objects of the company; (c) in our opinion and to the best of our information and according to the explanations given to us, the balance sheet, profit and loss account, statement of changes in equity and cash flow statement together with the notes forming part thereof conform with approved accounting standards as applicable in Pakistan, and give the information required by the Companies Ordinance, 1984, in the manner so required and respectively give a true and fair view of the state of the company's affairs as at June 30, 2011 and of the profit, its changes in equity and cash flows for the year then ended; and in our opinion, zakat deductible at source under the Zakat and Ushr Ordinance, 1980 was deducted by the company and deposited in the Central Zakat Fund established under section 7 of that Ordinance.

(d)

Karachi, July 28, 2011

Audit Engagement Partner: Saad Kaliya

A.F. FERGUSON & CO. Chartered Accountants

A. F. FERGUSON & CO., Chartered Accountants, a member firm of the PwC network State Life Building No. 1-C, I.I Chundrigar Road, P.O. Box 4716, Karachi-74000, Pakistan Tel: +92 (21) 32426682-6/32426711-5; Fax: +92 (21) 32415007/32427938; <www.pwc.com/pk>
Lahore: 23-C, Aziz Avenue, Canal Bank, Gulberg V, P.O.Box 39, Shahrah-e-Quaid-e-Azam, Lahore-54660, Tel: +92 (42) 35715864-71; Fax: +92 (42) 35715872 Islamabad: PIA Building, 3rd Floor, 49 Blue Area, Fazl-ul-Haq Road, P.O.Box 3021, Islamabad-44000; Tel: +92 (51) 2273457-60; Fax: +92 (51) 2277924 Kabul: House No. 1916, Street No. 1, Behind Cinema Bariqot, Nahar-e-Darsan, Karte-4, Kabul, Afghanistan; Tel: +93 (779) 315320, +93 (799) 315320

21

BALANCE SHEET
AS AT JUNE 30, 2011
Note ASSETS NON-CURRENT ASSETS Property, plant and equipment Intangible assets Long term loans Long term security deposits CURRENT ASSETS Stores and spares Stock in trade Trade debts Loans and advances Trade deposits and short term prepayments Other receivables Profit receivable from banks Taxation Cash and bank balances TOTAL ASSETS EQUITY AND LIABILITIES SHARE CAPITAL AND RESERVES Authorised share capital Issued, subscribed and paid-up share capital Reserves LIABILITIES NON-CURRENT LIABILITIES Deferred taxation Long term deposits CURRENT LIABILITIES Trade and other payables Accrued mark-up Current maturity of long term loan TOTAL LIABILITIES CONTINGENCIES AND COMMITMENTS TOTAL EQUITY AND LIABILITIES The annexed notes 1 to 41 form an integral part of these financial statements. 23 6,410,133 4,806,570 18 19 20 21 354,473 13,945 368,418 1,667,916 124 1,668,040 2,036,458 212,000 6,280 218,280 1,010,461 58 625 1,011,144 1,229,424 16 16 17 400,000 315,909 4,057,766 4,373,675 400,000 274,704 3,302,442 3,577,146 4 5 6 7 8 9 10 11 12 13 14 15 2,680,784 18,775 13,528 9,181 2,722,268 36,353 2,370,938 321,073 92,674 22,925 50,473 13 174,573 618,843 3,687,865 6,410,133 1,873,118 32,155 16,631 6,966 1,928,870 18,805 1,322,237 316,779 105,363 15,972 4,191 3,224 3,108 1,088,021 2,877,700 4,806,570 2011 2010 (Rupees in 000)

22

Zulfiqar Ali Lakhani Chief Executive

Tasleemuddin Ahmed Batlay Director

PROFIT AND LOSS ACCOUNT


FOR THE YEAR ENDED JUNE 30, 2011
Note 2011 2010 (Rupees in 000) 18,132,057 (2,778,948) (215,807) (986,882) 14,150,420 24 (9,989,856) 4,160,564 25 26 27 28 (2,115,193) (157,749) (164,081) 72,573 1,796,114 29 (11,933) 1,784,181 30 (616,801) 1,167,380 14,583,936 (2,142,056) (118,273) (794,297) 11,529,310 (7,699,401) 3,829,909 (1,846,098) (142,021) (156,206) 89,644 1,775,228 (11,036) 1,764,192 (612,553) 1,151,639

Turnover Sales tax Special excise duty Trade discounts Net turnover Cost of sales Gross profit Selling and distribution costs Administrative expenses Other operating expenses Other operating income Profit from operations Finance cost Profit before taxation Taxation Profit after taxation

Earnings per share (rupees) - restated

31

36.95

36.45

The annexed notes 1 to 41 form an integral part of these financial statements.

Zulfiqar Ali Lakhani Chief Executive

Tasleemuddin Ahmed Batlay Director

23

STATEMENT OF CHANGES IN EQUITY


FOR THE YEAR ENDED JUNE 30, 2011
Issued, subscribed and paid up share capital Capital reserve share premium Revenue reserves General reserve (Rupees in 000)
Balance as at July 1, 2009 Comprehensive income for the year Net profit for the year ended June 30, 2010 Other comprehensive income Transfer to general reserve Total other comprehensive income Total comprehensive income for the year ended June 30, 2010 Transactions with owners Final dividend for the year ended June 30, 2009 (Rs 11.50 per share) Bonus shares issued at the rate of three shares for every twenty shares held Total transactions with owners Balance as at June 30, 2010 Comprehensive income for the year Net profit for the year ended June 30, 2011 Other comprehensive income Transfer to general reserve Total other comprehensive income Total comprehensive income for the year ended June 30, 2011 Transactions with owners Final dividend for the year ended June 30, 2010 (Rs 13.50 per share) Bonus shares issued at the rate of three shares for every twenty shares held Total transactions with owners Balance as at June 30, 2011 41,205 41,205 315,909 13,456 2,870,000 (370,851) (41,205) (412,056) 1,174,310) (370,851) (370,851) 4,373,675) 740,000 740,000 740,000 (740,000) (740,000) 427,380) 1,167,380) 1,167,380) 1,167,380) 35,831 35,831 274,704 13,456 2,130,000 (274,704) (35,831) (310,535) 1,158,986) (274,704) (274,704) 3,577,146) 440,000 440,000 440,000 (440,000) (440,000) 711,639) 1,151,639) 1,151,639) 1,151,639) 238,873 13,456 1,690,000 757,882) 2,700,211)

Unappropriated profit

Total

The annexed notes 1 to 41 form an integral part of these financial statements.

24

Zulfiqar Ali Lakhani Chief Executive

Tasleemuddin Ahmed Batlay Director

CASH FLOW STATEMENT


FOR THE YEAR ENDED JUNE 30, 2011
Note CASH FLOWS FROM OPERATING ACTIVITIES Cash generated from operations Finance costs paid Taxes paid Long term loans Long term security deposits Long term deposits Net cash inflow from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Fixed capital expenditure Purchase of intangible assets Purchase of short term investment Sale proceeds on disposal of property, plant and equipment Profit received on savings and term deposit accounts Profit received on a term deposit receipt Sale proceeds on disposal of short term investment Net cash outflow from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Long term loan Dividend paid Net cash outflow from financing activities Net (decrease) / increase in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year (625) (370,420) (371,045) (469,178) 1,088,021 618,843 (2,500) (274,407) (276,907) 63,355 1,024,666 1,088,021 (994,061) (5,795) (200,000) 9,415 48,267 3,087 210,220 (928,867) (838,694) (14,820) 12,329 74,888 68 (766,229) 32 1,485,828 (11,867) (650,926) 2,249 (2,215) 7,665 830,734 1,776,475 (11,145) (659,539) 613 (535) 622 1,106,491 2011 2010 (Rupees in 000)

15

The annexed notes 1 to 41 form an integral part of these financial statements.

Zulfiqar Ali Lakhani Chief Executive

Tasleemuddin Ahmed Batlay Director

25

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS


FOR THE YEAR ENDED JUNE 30, 2011
1. THE COMPANY AND ITS OPERATIONS Colgate-Palmolive (Pakistan) Limited (the Company) was initially incorporated in Pakistan on December 5, 1977 as a public limited company with the name of National Detergents Limited. The name of the Company was changed to Colgate-Palmolive (Pakistan) Limited on March 28, 1990 when the Company entered into a Participation Agreement with Colgate-Palmolive Company, USA. The Company is listed on the Karachi and Lahore Stock Exchanges. The registered office of the Company is situated at Lakson Square, Building No. 2, Sarwar Shaheed Road, Karachi, Pakistan. The Company is mainly engaged in the manufacture and sale of detergents, personal care and other related products. 2. 2.1 SIGNIFICANT ACCOUNTING INFORMATION AND POLICIES Accounting convention These financial statements have been prepared under the historical cost convention except for the recognition of certain employee retirement benefits at present value in accordance with the actuarial recommendations as referred to in note 2.13. 2.2 Statement of compliance These financial statements have been prepared in accordance with the requirements of the Companies Ordinance, 1984 (the Ordinance) and the approved accounting standards as applicable in Pakistan. Approved accounting standards comprise of such International Financial Reporting Standards (IFRSs) issued by the International Accounting Standards Board as are notified under the Ordinance and the requirements of and directives issued under that Ordinance. However, the requirements of and the directives issued under that Ordinance have been followed where those requirements are not consistent with the requirements of the IFRSs, as notified under the Ordinance. Standards, amendments to approved accounting standards and new interpretations becoming effective during the year ended June 30, 2011: There are certain new approved accounting standards, amendments to approved accounting standards and interpretations that are mandatory for accounting periods beginning on or before January 1, 2010 but are considered not to be relevant or to have any significant effect on the Company's operations and are, therefore, not disclosed in these financial statements. Standards, amendments to approved accounting standards and interpretations that are not yet effective and have not been early adopted by the Company: IAS 24 (Revised), Related party disclosures, issued in November 2009. This revised standard supersedes IAS 24, Related party disclosures, issued in 2003. IAS 24 (Revised) is mandatory for periods beginning on or after January 1, 2011. The revised standard clarifies and simplifies the definition of a related party and removes the requirement for government-related entities to disclose details of all transactions with the government and other government-related entities. The revision is not expected to have a material impact on the Companys financial statements. There are certain amendments to the standards and interpretations that are mandatory for accounting periods beginning on or after January 1, 2011 but are considered not to be relevant or do not have any significant effect on the Company's operations and are, therefore, not detailed in these financial statements. 2.3 Property, plant and equipment These assets are stated at cost less accumulated depreciation and accumulated impairment losses, if any, except for leasehold land and capital work in progress which are stated at cost. 26

Assets having cost exceeding the minimum threshold as determined by the management are capitalised. All other assets are charged to income in the year when acquired. Depreciation is charged to income applying the straight line method by applying rates (as stated in note 4.1.1). Depreciation on additions is charged from the month in which the asset is put to use and on disposal upto the month of disposal at the rates stated in note 4.1.1. No depreciation is charged if the asset's residual value exceeds its carrying amount. Residual values and the useful lives are reviewed at each balance sheet date and adjusted if expectations differ significantly from previous estimates. Residual values are determined by the management as the amount it expects it would receive currently for an item of property, plant and equipment if it was already of the age and in the condition expected at the end of its useful life based on the prevailing market prices of similar assets already at the end of their useful lives. Useful lives are determined by the management based on the expected usage of assets, physical wear and tear, technical and commercial obsolescence, legal and similar limits on the use of the assets and other similar factors. Normal repairs and maintenance are charged to income as and when incurred. Major renewals and improvements are capitalised. Profit or loss on disposal of assets is recognised in income currently. 2.3.1 Capital work in progress All expenditure connected with specific assets incurred during installation and construction period are carried under capital work in progress. These are transferred to specific assets as and when assets are available for use. 2.4 Intangible assets An intangible asset is an identifiable non-monetary asset without physical substance. Intangible assets are recognised when it is probable that the expected future economic benefits will flow to the entity and the cost of the asset can be measured reliably. Cost of the intangible asset (i.e. computer software) includes purchase cost and directly attributable expenses incidental to bring the asset for its intended use. Costs associated with maintaining computer software are recognised as an expense as and when incurred. Intangible assets are stated at cost less accumulated amortisation and accumulated impairment losses, if any. Amortisation is charged over the estimated useful life of the asset on a systematic basis applying the straight line method. Useful lives of intangible operating assets are reviewed, at each balance sheet date and adjusted if the impact of amortisation is significant. 2.5 Impairment The Company assesses at each balance sheet date whether there is any indication that property, plant and equipment and intangible assets may be impaired. If such indication exists, the carrying amounts of such assets are reviewed to assess whether they are recorded in excess of their recoverable amounts. Where carrying values exceed recoverable amounts, assets are written down to their recoverable amounts and the differences are recognised in income currently. 2.6 Stores and spares Stores and spares are valued at lower of cost using the moving average method and estimated net realisable value. Items in transit are valued at cost as accumulated upto the balance sheet date. Provision for obsolete items, if any, is based on their condition as at the balance sheet date depending upon the management's judgement. Loose tools are charged to income as and when purchased as their inventory is generally not significant.

27

2.7

Stock in trade Stock in trade is valued at the lower of cost and estimated net realisable value. Cost is determined as follows: Stages of stock in trade Raw and packing material Raw and packing material in bonded warehouse and in transit Work in process and finished goods Trading goods Basis of valuation - Moving average cost - Cost accumulated upto the balance sheet date - Cost of direct materials and appropriate portion of production overheads - Moving average cost

Net realisable value is determined on the basis of estimated selling price of the product in the ordinary course of business less estimated costs of completion and the estimated costs necessary to be incurred for its sale. 2.8 Trade debts and other receivables Trade debts are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method less provision for impairment. A provision for impairment of trade debts and other receivables is established when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of the receivable. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments are considered indicators that the trade receivable is impaired. Debts, considered irrecoverable, are written off, as and when identified. 2.9 Taxation Current Provision for current taxation is based on taxable income for the year at the current rates of taxation after taking into account tax credits and tax rebates available, if any, and tax paid on presumptive basis. Deferred Deferred tax is recognised using the balance sheet liability method on all temporary differences between the carrying amount of the assets and liabilities and their tax bases. Deferred tax liabilities are recognised for all major taxable temporary differences. Deferred tax assets are recognised for all major deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary differences can be utilised. The carrying amount of the deferred tax asset is reviewed at each balance sheet date and is recognised only to the extent that it is probable that future taxable profits will be available against which the assets may be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised. Unrecognised deferred income tax assets are reassessed at each balance sheet date and are recognised to the extent that it becomes probable that future taxable profit will allow deferred tax asset to be recovered. Deferred tax assets and liabilities are measured at the tax rate that are expected to apply to the year when the asset is utilised or the liabiltiy is settled, based on the tax rates that have been enacted or substantially enacted at the balance sheet date. 2.10 Cash and cash equivalents Cash and cash equivalents are carried in the balance sheet at cost. For the purpose of the cash flow statement, cash and cash equivalents comprise of cash in hand, deposits held with banks and running finances under markup arrangement. 2.11 Borrowing costs Borrowing costs relating to the acquisition, construction or production of a qualifying asset are recognised as part of the cost of that asset. All other borrowing costs are recognised as an expense in the period in which these are incurred. 28

2.12

Provisions Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, 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 the obligation. Provisions are reviewed periodically and adjusted to reflect the current best estimates.

2.13

Staff retirement benefits Defined benefit plan The Company operates a defined benefit plan i.e. an approved funded gratuity scheme for all its permanent employees subject to attainment of retirement age and minimum service of prescribed period. Contributions are made to the fund on the basis of actuarial recommendations. Actuarial valuation is carried out using the projected unit credit method. Actuarial gains / losses exceeding 10 percent of the higher of the present value of the defined benefit obligation and fair value of plan assets, at the beginning of the year, are amortised over average future service of the employees. Defined contribution plan The Company operates an approved funded provident fund scheme for all its permanent employees. Equal monthly contributions are made, both by the company and its employees, to the fund at the rate of 9 percent of the basic salaries of employees. Compensated absences The liability in respect of compensated absences of employees is accounted for in the period in which the absences accrue.

2.14

Revenue recognition Sales are recognised on despatch of goods to customers. Profit on bank balances are recognised on a time proportion basis on the principal amount outstanding and at the applicable rate. Insurance commission income is recognised as and when received.

2.15

Foreign currency translation Transactions in foreign currencies are translated in Pakistan rupees (functional and presentation currency) at the exchange rate prevailing on the date of transaction. Monetary assets and liabilities in foreign currencies are translated into Pakistan rupees at the rates of exchange approximating those prevalent at the balance sheet date. Exchange differences are charged to income currently.

2.16

Dividend and other appropriations Dividend is recognised as a liability in the period in which it is declared. Appropriations of profit are reflected in the statement of changes in equity in the period in which such appropriations are approved.

2.17

Financial instruments

2.17.1 Financial assets The Company classifies its financial assets in the following categories: at fair value through profit or loss, loans and receivables, available-for-sale and held to maturity. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at the time of initial recognition. a) Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss are financial assets held for trading and financial assets designated upon initial recognition as at fair value through profit and loss. A financial asset is classified as held for trading if acquired principally for the purpose of selling in the short term. Assets in this category are classified as current assets.

29

b)

Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities for greater than twelve months after the balance sheet date, which are classified as non-current assets. Consistent with prior years, loans and receivables with less than twelve months maturities are classified as trade debts, loans and advances, deposits, other receivables and profit receivable from banks in the balance sheet.

c)

Available-for-sale financial assets Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless management intends to dispose of the investments within twelve months from the balance sheet date. Available-for-sale financial assets are classified as short term investments in the balance sheet. Changes in fair value of securities classified as available-for-sale are recognised in equity. When securities classified as available-for-sale are sold or impaired, the accumulated fair value adjustments recognised directly in equity are included in the profit and loss account as gains and losses from investment securities. Interest on available-for-sale securities calculated using effective interest method is recognised in the profit and loss account. Dividends on available-for-sale equity intruments are recognised in the profit and loss account when the Company's right to receive payments is established.

d)

Held to maturity Financial assets with fixed or determinable payments and fixed maturity, where management has the intention and ability to hold till maturity are carried at amortised cost. All financial assets are recognised at the time when the company becomes a party to the contractual provisions of the instrument. Regular purchases and sales of investments are recognised at trade date i.e. the date on which the Company commits to purchase or sell the asset. Financial assets are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit and loss. Financial assets carried at fair value through profit and loss are initially recognised at fair value and transaction costs are expensed in the profit and loss account. The fair values of quoted investments are based on current prices. If the market for a financial asset is not active (for unlisted securities), the Company measures the investments at cost less impairment in value, if any. Available-for-sale financial assets and financial assets at fair value through profit and loss are subsequently carried at fair value. 'Loans and receivables' and 'held to maturity' investments are carried at amortised cost using effective interest rate method. Financial assets are derecognised when the rights to receive cash flows from the assets have expired or have been transferred and the Company has transferred substantially all risks and rewards of ownership. The Company assesses at each balance sheet date whether there is objective evidence that a financial asset or group of financial assets is impaired. If any such evidence exists for 'available-for-sale' financial assets, the cumulative loss is removed from equity and recognised in the profit and loss account. Impairment losses recognised in the profit and loss account on equity instruments are not reversed through the profit and loss account.

2.17.2 Financial liabilities All financial liabilities are recognised at the time when the Company becomes a party to the contractual provisions of the instrument. Financial liabilities, other than those at fair value through profit or loss, are measured at amortised cost using the effective yield method. A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expired. Where an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange and modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in respective carrying amounts is recognised in the profit and loss account.

30

2.17.3 Off-setting of financial assets and financial liabilities A financial asset and a financial liability is offset and the net amount is reported in the financial statements if the Company has a legally enforceable right to set-off the transaction and also intends either to settle on a net basis or to realise the asset and settle the liability simultaneously. 2.18 Transactions with related parties Consistent with prior years, the Company enters into transactions with related parties for sale or purchase of goods and services on mutually agreed prices. 2.19 Contingent liabilities Contingent liability is disclosed when: there is a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the company; or there is present obligation that arises from past events but it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation or the amount of the obligation cannot be measured with sufficient reliability.

3.

CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS The preparation of financial statements in conformity with approved accounting standards requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Companys accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are as follows: a) b) c) d) e) f) g) Assumptions and estimates used in determining the recoverable amount, residual values and useful lives of property, plant and equipment (note 4); assumptions and estimates used in determining the useful lives and residual values of intangible assets (note 5); assumptions and estimates used in writing down items of stock in trade to their net realisable value (note 9); assumptions and estimates used in calculating the provision for impairment for trade debts (note 10); assumptions and estimates used in the recognition of deferred taxation (note 18); assumptions and estimates used in accounting for defined benefit plan (note 39); and assumptions and estimates used in disclosure and assessment of provision for contingencies (note 23).

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectation of future events that are believed to be reasonable under the circumstances.

4.

PROPERTY, PLANT AND EQUIPMENT Note 2011 2010 (Rupees in 000) 2,088,144 592,640 2,680,784 1,318,071 555,047 1,873,118

Operating fixed assets Capital work in progress

4.1 4.2

31

4.1

Operating fixed assets


Electric Factory Gas Furniture Tools and Computers and Office Leasehold building on Plant and fittings and leasehold machinery installation installation and fixtures equipment Vehicles accessories equipment land land
40,973 228,644) 996,265) 57,149) (95,023) (377,972) (20,783) 40,973 133,621) 618,293) 36,366) 154) (86) 68) 7,294) (4,277) 3,017) 76,778) 191,070) (35,588) (86,498) 41,190) 104,572) 43,759) (15,312) 28,447

4.1.1 The following is a statement of operating fixed assets:


Total

-------------------------------------------------------------------------(Rupee'000)---------------------------------------------------------------------At July 1, 2009 Cost Accumulated depreciation Net book value Year ended June 30, 2010 Additions Transfers from capital work in progress during the year Disposals (note 4.1.7) Cost Depreciation Net book value Write offs (note 4.1.3) Cost Depreciation Net book value Depreciation charge for the year (note 4.1.8) Net book value as at June 30, 2010 (467) 374) (93) (23) 5) (18) (490) 379) (111) (14,735) 8,448) (6,287) (14,735) 8,448) (6,287) 978) 34,552) 14,465) 258,549) 2,160) 6,959) 596) 20,140) 17,927) 4,769) 48,717) 7,061) 805) 7,206) 2,452) 99,110) 328,226) 26,608) 1,668,694) (8,677) (644,216) 17,931) 1,024,478)

(14,386) 40,973 154,765)

(69,071) 822,236)

(3,864) 41,621)

(7) 61)

(756) 22,997)

(8,559) (16,815) 55,327) 130,187)

(10,738) 25,482)

(3,149) (127,345) 24,422) 1,318,071)

Year ended June 30, 2011 Additions Transfers from capital work in progress during the year Transfers with in fixed assets Cost Depreciation Net book value Disposals (note 4.1.7) Cost Depreciation Net book value Write offs (note 4.1.3) Cost Depreciation Net book value Depreciation charge for the year (note 4.1.8) Net book value as at June 30, 2011 (518) 409) (109) (1,701) 1,389) (312) (17) 12) (5) (1,048) 933) (115) (2,529) 2,055) (474) (732) 635) (97) (522) 420) (102) (7,067) 5,853) (1,214) (13,218) 6,975) (6,243) (250) 191) (59) (46) 2) (44) (13,514) 7,168) (6,346) 7,502) (4,050) 3,452) (8,235) 4,269) (3,966) 134) (120) 14) (1,386) 338) (1,048) 1,985) (437) 1,548) 30,663 587 305,320 73,031 412,093 1,013) 31,278) 2,308) 26,099) 7,321) 26,943) 19,011) 2,298) 8,312) 4,466) 2,184) 3,351) 144,430) 811,848)

(21,295)

(98,804)

(5,048)

(7)

(4,579)

(10,024)

(21,307)

(13,382)

(4,199)

(178,645)

71,636 442,720) 1,204,278)

68,873)

54)

46,710)

78,045) 123,946)

24,722)

27,160) 2,088,144)

32

-------------------------------------------------------------------------(Rupee'000)---------------------------------------------------------------------At June 30, 2010 Cost Accumulated depreciation Net book value Annual rates of depreciation (%) 2010 At June 30, 2011 Cost Accumulated depreciation Net book value Annual rates of depreciation (%) 2011 71,636 577,065) 1,744,467) 98,676) (134,345) (540,189) (29,803) 71,636 442,720) 1,204,278) 68,873) 154) (100) 54) 55,389) 129,823) 233,143) (8,679) (51,778) (109,197) 46,710) 78,045) 123,946) 62,954) (38,232) 24,722) 43,195) 3,016,502) (16,035) (928,358) 27,160) 2,088,144) 40,973 264,174) 1,269,279) 66,268) (109,409) (447,043) (24,647) 40,973 154,765) 822,236) 41,621) 154) (93) 61) 28,030) (5,033) 22,997) 99,474) 225,052) (44,147) (94,865) 55,327) 130,187) 51,158) (25,676) 25,482) 36,243) 2,080,805) (11,821) (762,734) 24,422) 1,318,071)

Electric Factory Gas Furniture Tools and Computers and Office Leasehold building on Plant and fittings and leasehold machinery installation installation and fixtures equipment Vehicles accessories equipment land land

Total

10

10

10

10

10

15

15

20

33

15

10

10

10

10

10

15

15

20

33

15

4.1.2 Included in fixed assets are few items having cost of Rs 29.045 million (2010: Rs 40.066 million) held by related parties and of Rs 42.375 million (2010: Rs 29.431 million) held by third parties for manufacturing certain products of the company. These fixed assets are free of lien and the company has full rights of repossession of these assets. 4.1.3 During the year, the company has identified certain items of property, plant and equipment from which further economic benefits are no longer being derived. Therefore, assets having cost of Rs 7.067 million (2010: Rs 0.490 million) and net book value of Rs 1.214 million (2010: Rs 0.111 million) have been retired from active use and have been written off in these financial statements. These items do not include any assets which have been fully depreciated in prior years. 4.1.4 Leasehold land includes land situated in Lahore costing Rs 61.281 million, the possession of which had been transferred to the company. However, in accordance with the terms of the allotment letter issued to the company by the local development and management company, the sale deed of land shall be executed upon the completion of the project. Further, the project has been completed during the year and the process of issuance of sale deed is in progress. 4.1.5 Included in plant and machinery are assets which are secured with a bank against pari passu charge over plant and machinery of the company and the charge was not vacated as at June 30, 2011. 4.1.6 No impairment relating to operating fixed assets has been recognised in the current year. 4.1.7 The following operating fixed assets with a net book value exceeding Rs 50,000 were disposed off during the year:

33

Particulars

Mode of disposal

Cost

Sale proceeds / Gain / receivable from (loss) insurance company ----------------------- (Rupees in 000) -----------------------245 215 277 701 215 215 651 596 624 518 326 434 119 143 345 405 174 167 394 8 5 11 6,788 380 120 105 290 342 105 105 318 290 312 841 178 161 121 926 159 590 250 242 531 60 63 57 6,166 180 120 105 290 342 105 105 318 290 577 1,325 442 455 215 810 425 983 425 409 531 64 64 65 8,465 950 265) 484) 264) 294) 94) (116) 266) 393) 175) 167) 4) 1) 8) 2,299) 770)

Accumulated Net book depreciation value

Particulars of purchasers

Vehicles

Maturity Of Company's Car Scheme --do---do---do---do---do---do---do-Maturity of Company's Maintained Car Scheme Bid --do---do---do-Negotiation --do---do---do---do---do-Insurance claim --do---do--

365 320 567 1,043 320 320 969 886 936 1,359 504 595 240 1,069 504 995 424 409 925 68 68 68 12,954 560

Zubair Uddin Khan, Employee of the company Waqar Hyder Zaidi, Employee of the company Pervaiz Mallick, Employee of the company Rehan Mirza, Employee of the company Mumtaz Ahmed , Employee of the company Nadeem Ahmed , Employee of the company Kaleem Ishrat , Employee of the company Syed Hasan Mehdi Kazmi , Employee of the company Altaf Hussain, Employee of the company Muhammad Rajal Irshad Khan, House # 71, Block-2, Karbala Road, Sahiwal Syed Ahmed Iqbal, Employee of the company Maqsood S/O Mehboob Khan, House # 14K, Garibabad, Liaquatabad, Karachi Mohammad Ali, House # D-712, Usman Ghani, Colony, Block-R, North Nazimabad, Karachi Muhammad Farooq, Ex-Employee of the company Mohsin Ali Bhojani, Ex-Employee of the company Mohammad Rafi, Ex-Employee of the company Mohammad Ramazan Fattani, Ex-Employee of the company Sana Wasay, Employee of the company Ahmed Rauf Rehmani, Employee of the company Century Insurance Company Limited, Lakson Square Building No 3, Sarwar Shaheed Road, Karachi Century Insurance Company Limited, Lakson Square Building No 3, Sarwar Shaheed Road, Karachi Century Insurance Company Limited, Lakson Square Building No 3, Sarwar Shaheed Road, Karachi

Others Items having Various net book value of less than Rs. 50,000 each 2011 2010

Various

13,514 14,735

7,168 8,448

6,346 6,287

9,415 12,329

3,069) 6,042)

34

4.1.8 Depreciation charge for the year has been allocated as follows: Note Cost of sales Selling and distribution costs Administrative expenses 24.1 25 26 2011 2010 (Rupees in 000) 142,310 22,568 13,767 178,645 4.2 Capital work in progress 101,047 14,815 11,483 127,345

4.2.1 The following is a statement of capital work in progress:

Leasehold Land

Factory building on leasehold land


25,124)

Electric fittings and installation (Rupees in 000)


114,106) 1,579)

Plant and machinery

Other assets

Total

Balance as at July 1, 2009 Capital expenditure incurred during the year Capital expenditure charged off during the year Transfers Transfers to operating fixed assets (note 4.1.1) Balance as at June 30, 2010 Capital expenditure incurred during the year Capital expenditure charged off during the year Transfers Transfers to operating fixed assets (note 4.1.1)

2,969)

143,778)

172,069)

506,361)

26,159)

34,995)

739,584)

(688)

(89) 1,037)

(349) -

(89)

(34,552) 161,953)

(258,549) 362,866)

(6,959) 20,779)

(28,166) 9,449)

(328,226) 555,047)

10,000

137,594)

604,033)

26,459)

71,545)

849,631)

(144) 21,650)

(16,688)

(36) -

(10) (4,962)

(190) -

(305,320)

(412,093)

(31,278)

(63,157)

(811,848)

Balance as at June 30, 2011

10,000

15,733)

538,118)

15,924)

12,865)

592,640)

4.2.2 The aforementioned leasehold land is situated in Kotri, the possession of which had been transferred to the company, however, the transfer deed has not been executed and its execution process is in progress.

35

5.

INTANGIBLE ASSETS
At July 1, 2009 Cost Accumulated amortisation Net book value Year ended June 30, 2010 Additions Amount charged off Transfers Amortisation for the year Net book value as at June 30, 2010 Year ended June 30, 2011 Additions Amount charged off Transfers Amortisation for the year Net book value as at June 30, 2011 At June 30, 2010 Cost Accumulated amortisation Net book value At June 30, 2011 Cost Accumulated amortisation Net book value

Note

Goodwill
43,500 (37,700) 5,800

Computer Software software implementation (Rupees in 000)


15,269 (4,257) 11,012 37,321 48,333 (16,178) 32,155 5,795 37,950 (19,175) 18,775 52,590 (20,435) 32,155 58,000 (39,225) 18,775 25,262 25,262 14,820 (2,761) (37,321) -

Total
84,031 (41,957) 42,074 14,820 (2,761) 54,133 (21,978) 32,155 5,795 37,950 (19,175) 18,775 96,090 (63,935) 32,155 101,500 (82,725) 18,775

5.2

5.5

5,800 (5,800) 43,500 (43,500) 43,500 (43,500) -

5.5

5.1 5.2 5.3 5.4 5.5

Goodwill represents amount paid on acquisition of the brand Sparkle from Transpak Corporation Limited. This represents cost of SAP software implemented during the year ended June 30, 2010. Computer softwares are being amortised over a useful life of 3 years. The intangible assets included a trade mark costing Rs 1.5 million in respect of the brand Sparkle purchased on January 4, 2001. The trade mark was fully amortised during the year ended June 30, 2005. However, it is still in active use. Amortisation charge for the year has been allocated as follows: Note 25 26 2011 2010 (Rupees in 000) 5,286 13,889 19,175 11,086 10,892 21,978

Selling and distribution costs Administrative expenses 6. LONG TERM LOANS Considered good - due from executives - due from other employees Recoverable within one year 6.1 Reconciliation of carrying amount of loans to executives: Opening balance as at July 1, 2010 / 2009 Disbursements Repayments Closing balance as at June 30 37

6.1, 6.2 & 6.3 6.2 11

6,282 18,006 24,288 (10,760) 13,528

9,206 17,331 26,537 (9,906) 16,631

9,206 1,850 (4,774) 6,282

8,307 7,310 (6,411) 9,206

6.2

These loans are interest free and have been given to executives and other employees of the company for purchase of house, vehicles or for personal use in accordance with their terms of employment. These loans are to be repaid over a period of two to five years in equal monthly installments. Any outstanding loan due from an employee at the time of leaving the service of the company is adjustable against final settlement of staff provident fund. The maximum aggregate amount of loans due from executives at the end of any month during the year was Rs 10.084 million (2010: Rs 9.811 million ). Long term loans have been carried at cost as the effect of carrying these balances at amortised cost would not be material. Note 2011 2010 (Rupees in 000)

6.3 6.4

7.

LONG TERM SECURITY DEPOSITS Long term security deposits 7.1 & 7.2 9,181 6,966

7.1 7.2

This includes amount of Rs 4.410 million (2010: Rs 4.410 million) representing amount deposited with Water and Power Development Authority (WAPDA) for enhancement in electricity load for detergent unit at Kotri. This includes a Term Deposit Receipt (TDR) amounting to Rs 1.7 million (2010: Rs 1.7 million) issued by a banking company. This TDR has been issued to provide security to a banking company for issuance of guarantee against a lien on the TDR. The TDR carries profit at the rate of 7.226% (2010: 4%) per annum and shall mature on September 1, 2012 at which time the management intends to rollover the TDR. STORES AND SPARES Stores Spares 8.1 24.1.3 26,819 9,534 36,353 8,842 9,963 18,805

8.

8.1 9.

This includes spares in transit amounting to Rs 0.576 million (2010: Rs 0.761 million). STOCK IN TRADE Raw materials - in hand - in bonded warehouse - in transit Packing materials - in hand - in transit - with third parties Work in process Finished goods - in hand - in transit Trading goods - in hand - in transit 24.1.1 810,209 358,175 397,096 1,565,480 173,704 18,194 91 191,989 68,132 412,069 341 412,410 129,664 3,263 132,927 2,370,938 500,712 73,399 199,881 773,992 107,862 1,084 383 109,329 40,399 312,261 1,912 314,173 81,119 3,225 84,344 1,322,237

24.1.2 24.1

37

Note 10. TRADE DEBTS Considered good - due from related parties - others Considered doubtful - others Less: Provision for impairment 10.1 10.3 & 10.5 10.1 & 10.2

2011 2010 (Rupees in 000)

718 320,355 321,073 30,594 351,667 30,594 321,073

776 316,003 316,779 21,628 338,407 21,628 316,779

Trade debts include the following amounts due from related parties: Merit Packaging Limited Clover Pakistan Limited Century Paper and Board Mills Limited Tetley Clover (Private) Limited Hasanali Karabhai Foundation SIZA Services (Private) Limited Television Media Network (Private) Limited Cyber Internet Services (Private) Limited SIZA Foods (Private) Limited 25 23 555 4 3 99 9 718 42 384 247 46 4 3 44 6 776

10.2

The maximum aggregate amount of receivable due from related parties at the end of any month during the year was Rs 53.269 million (2010: Rs 57.817 million). Provision for impairment Balance as at the July 1 Provision made during the year Amounts written off (against provision) Balance as at the June 30 27 21,628 8,966 30,594 7,057 17,781 (3,210) 21,628

10.3

10.4

As at June 30, 2011, trade receivables of Rs 80.169 million (2010: Rs 124.856 million) were past due but not impaired. These relate to a number of independent customers for whom there is no recent history of default. The ageing analysis of these trade receivables is as follows: Upto 1 month 1 to 6 months More than 6 months 12,789 24,083 43,297 80,169 62,367 35,835 26,654 124,856

10.5

As at June 30, 2011, trade receivables of Rs 30.594 million (2010: Rs 21.628 million) were impaired and provided for. The ageing of these receivables is as follows: One year to five years Five years and over 23,382 7,212 30,594 14,536 7,092 21,628

11.

LOANS AND ADVANCES Considered good Current portion of long term loans - due from executives - due from other employees Advances - to employees - to contractors and suppliers 6 11.1 11.2

3,017 7,743 10,760 9,899 72,015 92,674

3,337 6,569 9,906 9,836 85,621 105,363

38

11.1

Advances to employees are provided to meet business expenses and are settled as and when the expenses are incurred. Note 2011 2010 (Rupees in 000) 393 611 1,992 2,996 352 352

11.2

Advances include the following amounts due from related parties: Century Insurance Company Limited Television Media Network (Private) Limited Century Publication (Private) Limited Rollins Industries (Private) Limited

12.

TRADE DEPOSITS AND SHORT TERM PREPAYMENTS Security deposits Prepayments 5,780 17,145 22,925 3,800 12,172 15,972

13.

OTHER RECEIVABLES Receivable from related parties Federal excise duty claimable Claims receivable from an insurance company Sales tax refundable Others 13.1 & 13.2 7,930 500 41,439 604 50,473 3,490 379 322 4,191

13.1

Other receivables include the following amounts due from related parties: Century Insurance Company Limited Clover Pakistan Limited Colgate-Palmolive Philippine Rollins Industries (Private) Limited Tetley Clover (Private) Limited 134 742 7,054 7,930 106 362 6 9 3,007 3,490

13.2

The maximum aggregate amount receivable from related parties at the end of any month during the year was Rs 20.938 million (2010: Rs 10.201 million). PROFIT RECEIVABLE FROM BANKS Profit on savings and term deposit accounts Profit on a term deposit receipt 3 10 13 3,190 34 3,224

14.

15.

CASH AND BANK BALANCES With banks on: - Current accounts - Savings accounts - Term deposit account Cheques in hand Cash in hand 140,060 424,149 564,209 54,376 258 618,843 117,847 741,989 200,000 1,059,836 27,948 237 1,088,021

15.1 15.2

15.1 15.2

The range of rates of profit on these savings accounts is between 5.00% to 11.75% per annum (2010: 5% to 11% per annum). The rate of profit on this term deposit account is nil per annum (2010: 11.50% per annum). The maturity period of the term deposit account is one month from the date of original issue.

39

16. 16.1

SHARE CAPITAL Authorised Capital 2011 2010 Number of shares 40,000,000 40,000,000 Ordinary shares of Rs 10 each 2011 2010 (Rupees in 000) 400,000 400,000

16.2

Issued, subscribed and paid-up capital 5,882,353 5,882,353 Ordinary shares of Rs 10 each fully paid in cash Ordinay shares of Rs 10 each 21,587,965 issued as fully paid bonus shares (note 16.3) 27,470,318 58,824 58,824

25,708,512 31,590,865 16.3

257,085 315,909

215,880 274,704

These shares include 4,120,547 bonus shares of Rs 10 each (2010: 3,583,085 bonus shares of Rs 10 each) issued by the company during the current year. RESERVES Capital reserve - Share premium reserve Revenue reserve - General reserve - Unappropriated profit 2011 2010 (Rupees in 000) 13,456 2,870,000 1,174,310 4,057,766 13,456 2,130,000 1,158,986 3,302,442

17.

18.

DEFERRED TAXATION Credit / (debit) balances arising in respect of timing differences relating to: Accelerated tax depreciation allowance Provision for compensated absences Provision for impairment of trade debts 370,329 (5,148) (10,708) 354,473 224,074 (4,504) (7,570) 212,000

19.

LONG TERM DEPOSITS Security deposits obtained from: - Distributors - Transporters - Others

13,440 500 5 13,945

5,775 500 5 6,280

19.1 20.

These deposits are interest free and are not refundable during the subsistence of relationship with the company. TRADE AND OTHER PAYABLES Trade creditors Accrued liabilities Bills payable Amounts due to distributors Special excise duty payable Sales tax payable Royalty payable to an associated undertaking Workers profits participation fund Workers welfare fund Retention money payable Unclaimed dividend Others 20.1 20.2 485,428 332,395 596,214 19,801 7,792 63,999 95,821 36,412 9,545 2,605 17,904 1,667,916 331,441 262,012 104,882 12,629 8,760 89,192 49,670 94,709 35,284 7,360 2,174 12,348 1,010,461

20.3

20.4

40

Note 20.1 These balances include the following amounts due to related parties: Hasanali Karabhai Foundation Princeton Travels (Private) Limited Merit Packaging Limited Century Insurance Company Limited Century Publication (Private) Limited Century Paper & Board Mills Limited Television Media Network (Private) Limited Tetley Clover (Private) Limited

2011 2010 (Rupees in 000) 603 11,460 24,212 84 36,359 467 142 1,493 908 2,556 4,500 4,351 186 14,603

20.2

These balances include the following amounts due to related parties: Century Paper & Board Mills Limited Clover Pakistan Limited Merit Packaging Limited 580 995 1,575 94,709 95,821 190,530 Less: Payments during the year Balance at the end of the year 94,709 95,821 1,517 2,084 3,601 61,528 94,709 156,237 61,528 94,709

20.3

Workers' profits participation fund Balance at the beginning of the year Allocation for the year 27

20.4

These balances include the following amounts due to related parties: Colgate-Palmolive Pakistan Limited Employees Contributory Provident Fund Trust Colgate-Palmolive (Thailand) Limited Colgate-Palmolive (Hong Kong) Limited 3,397 299 3,696 1,072 277 1,349

21.

ACCRUED MARK-UP Accrued mark-up on: - Long term loan - Short term borrowings 124 124 15 43 58

22. 22.1

SHORT TERM RUNNING FINANCES The company has arranged short-term borrowing facilities from various banks on mark-up basis to the extent of Rs 1,140 million (2010: Rs 1,140 million), which can be interchangeably utilised as running finance facilities or import credit facilities. These facilities expired during the year and were renewed subsequently. The renewed facilities are available for various periods expiring between August 15, 2011 to June 30, 2012. The arrangements are secured by a joint hypothecation of stocks, stores and spares, trade debts, other current assets and second charge on immovable assets of the company. The mark-up on short-term running finance facilities ranges between 14.27% to 16.00% (2010: 13.36% to 17.00%) per annum. The facilities for opening letters of credit and guarantee as at June 30, 2011 aggregated Rs 3,781.175 million and Rs 30 million (2010: Rs 3,254.25 million and Rs 30 million) respectively of which the amounts remaining unutilised at the year end were Rs 2,954.091 million and Rs 9 million (2010: Rs 2,720.264 million and Rs 11.7 million) respectively. 41

22.2

22.3

23. 23.1

CONTINGENCIES AND COMMITMENTS Contingencies

23.1.1 As a result of a recovery suit of Rs 31.455 million alongwith interest at the rate of thirteen percent (13%) per annum filed by the Octroi Contractor against the Government of Sindh, Union Council Bulari and Kotri Association of Trade and Industries (KATI) in the Civil Court, the Honorable Senior Judge issued a decree of Rs 7.336 million in favour of Octroi Contractor. KATI had filed an appeal in the High Court of Sindh, whereas, the Octroi Contractor had also filed an appeal requesting to enhance the amount of decree. Subsequently, the case was transferred to the Additional District Judge Kotri by the High Court of Sindh. The District Judge allowed the appeal in favour of KATI and remanded the case to Senior Civil Judge Kotri for adjudication. The relevant case has been dismissed by the Senior Civil Judge in favour of KATI. Subsequently the Octroi contractor has filed an appeal in the District Court Jamshoro against the dismissal. If the contractor's appeal is decided in its favour, then the company, being a member of KATI, would be required to pay its share as determined by the Court out of the total decree amount. The management of the company, based on the advice of its legal counsel handling the subject matter, is confident that the appeal will be decided in favour of KATI. Accordingly, no provision has been made in the financial statements on this account. 23.1.2 Cases have been filed against the company by some employees claiming approximately Rs 1.541 million (2010: Rs 1.8 million) in aggregate. Provision has not been made in these financial statements for the aforementioned amounts as the management of the company, based on the advice of its legal counsel handling the subject cases, is of the opinion that matters shall be decided in the companys favour. 23.1.3 Post dated cheques have been issued to custom authorities as a security in respect of duties and taxes amounting to Rs 382.324 million (2010: Rs 114.150 million) payable at the time of exbonding of imported goods. In the event the goods are not cleared from custom warehouse within the prescribed time period, cheques issued as security shall be encashable. 23.1.4 Contingent liabilities in respect of indemnities given to financial institutions for guarantees issued by them on behalf of the company in the normal course of business aggregate Rs 21 million (2010: Rs 18.3 million). 23.2 Commitments

23.2.1 Commitments in respect of capital expenditure amount to Rs 101.898 million (2010: Rs 58.092 million). 23.2.2 Outstanding letters of credit and acceptances amount to Rs 759.004 million (2010: Rs 519.528 million). 23.2.3 Outstanding duties leviable on clearing of stocks amount to Rs 16.027 million (2010: Rs 8.743 million). Note 24. COST OF SALES Opening stock of finished goods (including trading goods) Cost of goods manufactured Purchases of trading goods Less: Closing stock of finished goods (including trading goods) 24.1 9 398,517 8,468,757 1,667,919 10,535,193 545,337 9,989,856 347,080 6,340,393 1,410,445 8,097,918 398,517 7,699,401 2011 2010 (Rupees in 000)

42

Note 24.1 Cost of goods manufactured Opening stock of work in process Raw materials consumed Packing materials consumed Stores and spares consumed Salaries, wages and other benefits Staff retirement gratuity Provident fund Power and fuel Repairs and maintenance Rent, rates and taxes Insurance Laboratory expenses Cartage Depreciation Other manufacturing expenses Less: Recovery from related parties Insurance claims against fire damages Less: Closing stock of work in process 9 24.1.1 & 24.2 24.1.2 & 24.2 24.1.3 39.8

2011 2010 (Rupees in 000)

4.1.8

40,399 5,836,638 1,784,861 29,889 321,078 10,366 6,397 209,081 24,478 1,841 17,670 5,837 79,297 142,310 26,747 8,536,889 8,536,889 68,132 8,468,757

105,539 4,315,539 1,250,686 22,900 261,219 9,958 5,661 169,668 29,151 2,244 16,804 5,429 54,248 101,047 33,410 6,383,503 720 1,991 6,380,792 40,399 6,340,393

24.1.1 Raw materials consumed Opening stock Purchases Less: Closing stock 24.1.2 Packing materials consumed Opening stock Purchases Less: Closing stock 9 9 773,992 6,628,126 7,402,118 1,565,480 5,836,638 109,329 1,867,521 1,976,850 191,989 1,784,861 24.1.3 Stores and spares consumed Opening stock Purchases Less: Closing stock 8 18,805 47,437 66,242 36,353 29,889 15,138 26,567 41,705 18,805 22,900 584,457 4,505,074 5,089,531 773,992 4,315,539 91,356 1,268,659 1,360,015 109,329 1,250,686

24.2

Cost of sales includes amounts written off during the year in respect of the following: - Raw materials - Packing materials - Finished Goods 1,746 1,190 7,060 4,453 -

43

Note 25. SELLING AND DISTRIBUTION COSTS Salaries, wages and other benefits Staff retirement gratuity Provident fund Travelling and conveyance Repairs and maintenance Vehicle running expenses Advertising and sales promotion Royalty on sale of licensed products Postage, telephone and internet charges Rent, rates and taxes Printing and stationery Subscription and membership Legal and professional Freight Electricity Insurance Security service charges Depreciation Amortisation Other expenses Less: Recovery from related parties 26. ADMINISTRATIVE EXPENSES Salaries, wages and other benefits Staff retirement gratuity Provident fund Travelling and conveyance Repairs and maintenance Vehicle running expenses Postage, telephone and internet charges Rent, rates and taxes Printing and stationery Subscription and membership Legal and professional Electricity Insurance Security service charges Depreciation Software amortisation Others Less: Recovery from related parties 39.8 39.8

2011 2010 (Rupees in 000) 204,768 3,253 6,287 31,133 5,291 88,802 1,120,151 63,999 10,846 16,308 3,667 2,479 2 503,486 6,808 13,630 5,477 22,568 5,286 13,629 2,127,870 12,677 2,115,193 184,867 2,973 5,557 33,288 4,948 78,123 1,021,084 49,670 10,646 13,984 3,568 3,417 92 389,724 5,974 14,129 5,051 14,815 11,086 6,495 1,859,491 13,393 1,846,098

4.1.8 5.5

4.1.8 5.5

78,841 3,743 3,150 4,902 7,747 7,357 2,260 4,594 1,386 2,033 1,603 2,179 6,652 3,898 13,767 13,889 480 158,481 732 157,749

71,151 3,440 2,699 3,799 3,719 5,891 3,003 5,776 2,410 5,850 2,161 2,931 2,729 3,454 11,483 10,892 1,365 142,753 732 142,021

27.

OTHER OPERATING EXPENSES Workers profits participation fund Workers welfare fund Auditors remuneration Property, plant and equipment - written off Donations Advances to ex-employees written off Provision for impairment - trade debts Net exchange loss 20.3 27.1 4.1.1 27.2 10.3 95,821 36,412 1,057 1,214 17,343 8,966 3,268 164,081 94,709 35,284 914 111 6,735 37 17,781 635 156,206

44

Note 27.1 Auditors remuneration Audit fee Fee for half yearly review and other certifications Out of pocket expenses

2011 2010 (Rupees in 000)

480 470 107 1,057

400 425 89 914

27.2

Donations include the following in which a director is interested: Name of director Mr Iqbal Ali Lakhani Interest in donee Name and address of donee 600 450

(See note below) Special Olympics Pakistan, 205, Sunset Tower, Sunset Boulevard, DHA, Phase-II, Karachi.

Note: Spouse of Mr Iqbal Ali Lakhani is the Program Chief Executive of the donee organisation. Mr Zulfiqar Ali Lakhani (See note below) Zulfiqar & Fatima Foundation, 9 Khayaban-e-Ghazi, DHA, PhaseV, Karachi. Note: Mr Zulfiqar Ali Lakhani, his spouse and children are trustees of the donee organisation. Mr Zulfiqar Ali (See note below) Donation made to Swat IDPs Lakhani, Mr Amin through Hasanali Karabahi Mohammed Lakahni Foundation. and Mr Iqbal Ali Lakhani Note: The above mentioned directors are trustees of the Hasanali Karabahi Foundation. Mr Iqbal Ali Lakhani (See note below) Pakistan Business Council, M-02 Mezzanine Floor, Beaumont Plaza, 10 Beaumont Road, Karachi. 150 1,500 13,200 6,000

Note: Mr Iqbal Ali Lakhani is a common director. Mr Sultan Ali Lakhani (See note below) Express Helpline Trust, Plot No. 5, Expressway, Off. Korangi Road, Karachi. Note: Mr Sultan Ali Lakhani is the trustee of donee organization. 28. OTHER OPERATING INCOME Income from financial assets / liabilities Profit on savings and term deposit accounts Profit on a term deposit receipt Profit on short term investment Gain on disposal of short term investments Liabilities no longer payable written back Income from non-financial assets Insurance commission Gain on disposal of property, plant and equipment Sale of scrap Profit on sale of material 45,080 3,063 295 10,220 3,069 77,275 68 491 2,023 -

4.1.7

4,662 3,069 3,115 72,573

3,955 6,042 1,767 46 89,644 45

Note 29. FINANCE COST Markup on: - Long term loan - Short term borrowings Guarantee commission Bank commission and other charges 30. TAXATION Current - for the year - for prior years' Deferred

2011 2010 (Rupees in 000)

7 622 363 10,941 11,933

237 1,353 306 9,140 11,036

472,892 1,436 142,473 616,801

560,800 753 51,000 612,553

30.1

Reconciliation between the average effective tax rate and the applicable tax rate. 2011 2010 Percentage Applicable tax rate Tax effect of income that is not taxable in determining tax liability Tax effect of income assessed under presumptive tax regime Tax effect of income tax provision relating to prior year Tax effect of surchage 35.00 (0.09) (1.51) 0.08 1.09 34.57 35.00 (0.32) 0.04 34.72

31.

EARNINGS PER SHARE Profit after taxation Weighted average number of ordinary shares outstanding during the year - restated Earnings per share - restated

2011 2010 (Rupees in 000) 1,167,380 1,151,639

(Number of shares) 31,590,865 36.95 31,590,865 (Rupees) 36.45

31.1 32.

There are no dilutive potential ordinary shares outstanding as at June 30, 2011 and 2010. CASH GENERATED FROM OPERATIONS Profit before taxation Adjustment for non-cash charges and other items: Depreciation and amortisation expense Gain on sale of property, plant and equipment Provision for impairment - trade debts Advances to employees written off Profit on savings and term deposit accounts Profit on a term deposit receipt Profit on disposal of short term investment Finance costs Net exchange loss Stocks written off Property, plant and equipment written off Capital work-in-progress charged off Intangibles charged off Working capital changes 2011 2010 (Rupees in 000) 1,784,181 197,820 (3,069) 8,966 (45,080) (3,063) (10,220) 11,933 3,268 2,936 1,214 190 (463,248) 1,485,828 1,764,192 149,323 (6,042) 17,781 37 (77,275) (68) 11,036 635 11,513 111 89 2,761 (97,618) 1,776,475

32.1

46

32.1 Working capital changes (Increase) in current assets: Stores and spares Stock in trade Trade debts Loans and advances Trade deposits and short term prepayments Other receivables Increase in current liabilities: Trade and other payables

2011 2010 (Rupees in 000)

(17,548) (1,051,637) (13,260) 13,543 (6,953) (46,282) (1,122,137) 658,889 (463,248)

(3,667) (205,318) 4,930 54,588 9,752 7,949 (131,766) 34,148 (97,618)

33.

PROPOSED DIVIDEND The Board of Directors at their meeting held on July 28, 2011 have proposed a cash dividend of Rs 14 per share (2010: Rs 13.5 per share) for the year ended June 30, 2011, amounting to Rs 442.273 million (2010: Rs 370.851 million), bonus issue of 4.739 million shares (2010: 4.121 million shares) at the rate of three shares for every twenty shares held (2010: three shares for every twenty shares held) and transfer to general reserve of Rs 680 million (2010: Rs 740 million) subject to the approval of members at the annual general meeting to be held on September 12, 2011.

34. 34.1

RELATED PARTY DISCLOSURES Disclosure of transactions between the company and related parties The related parties comprise associated companies, staff retirement funds, directors and key management personnel. The company in the normal course of business carries out transactions with various related parties. Significant balances and transactions with related parties are as follows:

Nature of transaction Sale of goods, services provided and reimbursement of expenses Century Paper & Board Mills Limited Clover Pakistan Limited Merit Packaging Limited Rollins Industries (Private) Limited Tetley Clover (Private) Limited Cyber Internet Services (Private) Limited Hasanali Karabhai Foundation SIZA Services (Private) Limited Televison Media Network (Private) Limited Siza Foods (Private) Limited Lakson Business Solution Limited

Note Relationship with the Company

2011 2010 (Rupees in 000)

Associate Associate Associate 34.3 Related party Associate Associate Associate Associate Associate Associate Associate

371 15,143 113 571,202 6,937 17 721 15 99 21 1 594,640

423 22,479 82 484,400 5,084 6 78 20 79 512,651

47

Nature of transaction

Note Relationship with the Company

2011 2010 (Rupees in 000)

Purchase of goods, services received and reimbursement of expenses Century Insurance Company Limited Century Paper & Board Mills Limited Century Publication (Private) Limited Clover Pakistan Limited Colgate-Palmolive China Colgate-Palmolive (Vietnam) Limited Colgate-Palmolive Company USA Colgate-Palmolive (Hong Kong) Limited Colgate-Palmolive (Thailand) Limited Cyber Internet Services (Private) Limited Lakson Business Solution Limited Merit Packaging Limited Princeton Travels (Private) Limited Pakistan Business Council Rollins Industries (Private) Limited 34.3 SIZA (Private) Limited SIZA Foods (Private) Limited SIZA Services (Private) Limited Sybird (Private) Limited Tetley Clover (Private) Limited Television Media Network (Private) Limited

Associate Associate Associate Associate Subsidiary of CP-USA Subsidiary of CP-USA Joint venture company Subsidiary of CP-USA Subsidiary of CP-USA Associate Associate Associate Associate Common Director Related party Associate Associate Associate Associate Associate Associate

84,470 270,992 10,340 2,548 46,646 68,743 137,697 16,389 7,118 1,025 95,448 9,144 750 2,002,103 24 30 6 2,335 706 43,523 2,800,037

63,329 153,032 14,437 3,824 61,235 36,817 70,085 438 14,984 8,512 1,093 47,106 6,654 1,693,314 259 2,803 2,014 931 54,752 2,235,619

Rent, allied and other charges Hasanali Karabhai Foundation SIZA Services (Private) Limited Reliance Chemicals (Private) Limited Century Paper & Board Mills Limited

Associate Associate Associate Associate

15,064 710 2,179 233 18,186

16,048 670 2,149 18,867

Purchase of short term investments Lakson Investments Limited

Associate

200,000

Sale proceeds on redemption of short term investments Lakson Investments Limited Associate Profit on short term investments Lakson Investments Limited Royalty charges Colgate-Palmolive Company USA Sale of property, plant and equipment SIZA Services (Private) Limited Clover Pakistan Limited Merit Packaging Limited

210,219

Associate

296

Joint venture company

63,999

49,670

Associate Associate Associate

25 25

150 260 410

48

Nature of transaction

Note Relationship with the Company

2011 2010 (Rupees in 000)

Contribution to staff retirement benefits Colgate-Palmolive (Pakistan) Limited Employees Contributory Provident Fund Colgate-Palmolive (Pakistan) Limited Employees Gratuity Fund Donations Special Olympics Pakistan Hasanali Karabhai Foundation Zulfiqar & Fatima Foundation Pakistan Business Council Express Helpline Trust

Employees fund Employees fund

15,834 17,362 33,196 600 1,500 13,200 2,023 17,323

13,917 16,371 30,288 450 6,000 150 6,600

27.2 27.2 27.2 27.2 27.2

Related party Associate Associate Common Director Related party

Compensation paid to key management personnel Short-term employee benefits including compensated absences Key management personnel Post employment benefits --do-Insurance claims received Century Insurance Company Limited Insurance commission income Century Insurance Company Limited Purchase of property, plant and equipment Tetley Clover (Private) Limited Clover Pakistan Limited Lakson Investments Limited Dividend paid Colgate-Palmolive Company USA Century Insurance Company Limited Premier Fashions (Private) Limited SIZA (Private) Limited SIZA Services (Private) Limited SIZA Commodities (Private) Limited Rollins Industries (Private) Limited

27,492 3,049 30,541 1,870

25,055 2,666 27,721 10,778

Associate

Associate

4,662

3,955

Associate Associate Associate

82 32,287 65 32,434 111,255 136 60,006 29,094 104,732 34,264 15 339,502

6,365 55 6,420 82,411 101 44,449 21,551 77,579 25,381 11 251,483

Joint venture company Associate Associate Associate Associate Associate Related party

34.2

The related party status of outstanding balances as at June 30, 2011 are included in trade debts (note 10 ), other receivables (note 13), loans and advances (note 11) and trade and other payables (note 20). Rollins Industries (Private) Limited is a third party whose manufacturing process is dependent on the company. REMUNERATION OF CHIEF EXECUTIVE, DIRECTOR AND EXECUTIVES The aggregate amount charged in these financial statements for remuneration, including certain benefits to the chief executive, the director and executives of the company, are as follows:

34.3 35. 35.1

49

Chief Executive 2011 2010 Managerial remuneration Bonus / commission Staff retirement gratuity Provident fund Housing Utilities Motor vehicles Others 5,382 1,614 899 608 8,503 Number of persons 35.2 36. 1 5,382 1,614 809 528 8,333 1

Director 2011 2010 (Rupees in 000) 2,279 367 578 206 1,026 212 237 4,905 1 2,085 335 546 188 938 195 218 4,505 1

2011

Executives 2010 64,248 12,212 1,398 5,436 28,939 6,855 10,542 129,630 58

85,711 12,238 1,652 6,949 36,592 9,500 11,085 163,727 77

Chief executive, a working director and the executives of the company are also provided with company maintained cars. FINANCIAL INSTRUMENTS BY CATEGORY FINANCIAL ASSETS Loans and receivables at amortised cost Long term loans Long term security deposits Trade debts Loans and advances Trade deposits Other receivables Profit receivable from banks Cash and bank balances 2011 2010 (Rupees in 000) 13,528 9,181 321,073 20,659 5,780 8,430 13 618,843 997,507 FINANCIAL LIABILITIES Financial liabilities at amortised cost Long term loan Long term deposits Trade and other payables Accrued mark-up 16,631 6,966 316,779 19,742 3,800 3,812 3,224 1,088,021 1,458,975

13,945 1,508,090 124 1,522,159

625 6,280 769,887 58 776,850

37. 37.1

FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES The companys activities expose it to certain financial risks. Such financial risks emanate from various factors that include, but not limited to, market risk, credit risk and liquidity risk. The companys overall risk management focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the companys financial performance. Risks measured and managed by the company are explained in notes 37.1.1, 37.1.2 and 37.1.3 below:

37.1.1 Credit risk and concentration of credit risk Credit risk represents the accounting loss that would be recognised at the reporting date if counter parties fail completely to perform as contracted. Credit risk arises from cash and cash equivalents, derivative financial instruments and deposits with banks and financial institutions, as well as credit exposures to customers, including trade receivables and committed transactions. Out of the total financial assets of Rs 997.507 million (2010: Rs 1,458.975 million), the financial assets that are subject to credit risk amounted to Rs 997.249 million (2010: Rs 1,458.738 million). 50

The maximum exposure to credit risk as at June 30, 2011, along with comparative is tabulated below: Financial assets Long term loans Long term security deposits Trade debts Loans and advances Trade deposits Other receivables Profit receivable from banks Cash and bank balances 2011 2010 (Rupees in 000) 13,528 9,181 321,073 20,659 5,780 8,430 13 618,585 997,249 The bank balances along with credit ratings are tabulated below: Credit ratings A-1+ A-1 A2 F1+ F1 551,396 10,324 1,362 1,127 564,209 1,044,377 9,996 2,825 2,638 1,059,836 16,631 6,966 316,779 19,742 3,800 3,812 3,224 1,087,784 1,458,738

Due to the companys long standing business relationships with these counterparties and after giving due consideration to their strong financial standing, management does not expect non-performance by these counter parties on their obligations to the company. For trade receivables, internal risk assessments process determines the credit quality of the customer, taking into account its financial position, past experience and other factors. Individual risk limits are fixed based on internal or external ratings in accordance with limits set by the management. The utilisation of credit limits is regularly monitored. Accordingly the credit risk is minimal and the company also believes that it is not exposed to major concentration of credit risk. The breakup of amount due from customers other than related parties as stated in note 10 is presented below:

Due from customers other than related parties Institutional customers Distributors 233,434 117,515 350,949 220,884 116,747 337,631

Out of Rs 350.949 million (2010: 337.631 million), the company has provided Rs 30.594 million (2010: 21.628 million) as the amounts being doubtful to be recovered from them. 37.1.2 Liquidity risk Liquidity risk is the risk that an enterprise will encounter difficulties in raising funds to meet commitments associated with financial instruments. The management believes that it is not exposed to any significant level of liquidity risk. The management forecasts the liquidity of the company on basis of expected cash flow considering the level of liquid assets necessary to meet such risk. This involves monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.

51

Financial liabilities in accordance with their contractual maturities are presented below :
Interest/mark-up bearing Non- interest/mark-up bearing Maturity Maturity Sub-total Maturity Maturity Sub-total within one after one within one after one year year year year

Total

Financial liabilities Long term deposits Trade and other payables Accrued mark-up

June 30, 2011 (Rupees in 000) 1,508,090 124 1,508,214 13,945 13,945 13,945 1,508,090 124 1,522,159 13,945 1,508,090 124 1,522,159

Financial liabilities Long term loan Long term deposits Trade and other payables Accrued mark-up 37.1.3 Market Risk Currency Risk 625 625

June 30, 2010 (Rupees in 000) 625 625 769,887 58 769,945 6,280 6,280 6,280 769,887 58 776,225 625 6,280 769,887 58 776,850

Foreign currency risk arises mainly where receivables and payables exist due to transactions entered into foreign currencies. The company primarily has foreign currency exposures in US Dollars (USD). At June 30, 2011, if the currency had weakened / strengthened by 5% against the USD with all other variables held constant, pre-tax profit for the year would have been higher / lower by approximately Rs 30 million (2010: approximately Rs 6 million ). This will mainly result due to foreign exchange gains / losses on translation of USDdenominated bank balances and bills payables. Interest rate risk Interest / mark-up rate risk arises from the possibility that changes in interest / mark-up rates will affect the value of financial instruments. At June 30, 2011 the company's financial instruments mainly affected due to changes in the interest rates are balances placed on deposits with banks where changes in interest rates may have impact on the future profits / cash flows. The effects of changes in interest rates on the future profits arising on the balances placed on deposits with banks is not considered to be material. The company places its funds in banks having good credit ratings as also stated in note 37.1.1. Other price risk Other price risk is the risk that the fair value or future cash flows from a financial instrument will fluctuate due to 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 does not have financial instruments dependent on market prices. 37.1.4 Fair value of financial instruments Fair value is an amount for which an asset could be exchanged, or a liability settled, between knowledgeable willing parties in an arm's length transaction. Consequently, differences may arise between the carrying value and the fair value estimates. As at June 30, 2011 the net fair value of all financial assets and financial liabilities are estimated to approximate their carrying values. 52

37.1.5 Capital risk management The companys objectives when managing capital are to safeguard the companys ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure. In order to maintain or adjust the capital structure, the company may adjust the amount of dividends paid to shareholders, return capital to shareholders or issue new shares or sell assets to reduce debt. Consistent with others in the industry, the company manages its capital risk by monitoring its debt levels and liquid assets and keeping in view future investment requirements and expectation of the shareholders. Debt is calculated as total borrowings ('long term loan' and 'current maturity of the long term loan' as shown in the balance sheet). Total capital comprises shareholders equity as shown in the balance sheet under 'share capital and reserves'. As at June 30, 2011 and 2010, the company had surplus cash reserves to meet its requirements and there was no net debt position. 38. 38.1 38.2 ENTITY-WIDE INFORMATION The company constitutes of a single reportable segment, the principal classes of products of which are Personal Care, Home Care and Others. Information about products The company's principal classes of products accounted for the following percentages of sales: 2011 Personal Care Home Care Others 24% 73% 3% 100% 38.3 Information about geographical areas The company does not hold non-current assets in any foreign country. Revenues from external customers attributed to foreign countries in aggregate are not material. 38.4 Information about major customers Information about major customers constitutes information relating to revenues from transactions with any single external customer which amount to 10 per cent or more of an entity's revenues. The company does not have transactions with any external customer which amount to 10 percent or more of the entity's revenues. 39. 39.1 39.2 DEFINED BENEFIT PLAN (Staff Retirement Gratuity) The disclosures made in notes 39.2 to 39.14 are based on the information included in the actuarial valuation report as of June 30, 2011. The actuarial valuation of gratuity plan was carried out as at June 30, 2011. The projected unit credit method using the following significant assumptions was used for this valuation: 2011 2010 Percentage - Discount rate - per annum compound 14 12 - Expected rate of increase in salaries - per annum 13 11 - Expected rate of return on plan assets - per annum 14 12 Mortality rate The rates assumed were based on the EFU 61-66 mortality table. 2010 23% 74% 3% 100%

39.3

53

Note 39.4 The amounts recognised in the balance sheet are as follows: Present value of defined benefit obligation Fair value of plan assets Deficit Unrecognised net actuarial losses Unrecognised past service cost Payable to the gratuity fund 39.5 Movement in defined benefit obligation Present value of defined benefit obligation as at July 1, 2010 / 2009 Current service cost Interest cost Actuarial losses Transfer of an employee Benefits paid Present value as at June 30 39.6 Movement in fair value of plan assets Fair value as at July 1, 2010 / 2009 Expected return on plan assets Actuarial Gain Company contributions Transfer of an employee Benefits paid Fair value as at June 30 39.7 Movement in net liability in the balance sheet is as follows: Charge for the year Contributions made during the year to the fund Closing balance of net liability 39.8 Charge for the year has been allocated as under: Cost of sales Selling and distribution costs Administrative expenses 39.9 24.1 25 26 39.8 39.5 39.6

2011 2010 (Rupees in 000)

135,044 107,068 27,976 (22,465) (5,511) -

112,924 82,962 29,962 (22,615) (7,347) -

112,924 11,059 13,551 3,990 64 (6,544) 135,044

90,954 9,431 10,914 3,186 (1,561) 112,924

82,962 9,955 3,269 17,362 64 (6,544) 107,068 17,362 (17,362) -

57,899 6,948 3,305 16,371 (1,561) 82,962 16,371 (16,371) -

10,366 3,253 3,743 17,362

9,958 2,973 3,440 16,371 9,431 10,914 1,837 1,137 (6,948) 16,371 10,253

The following amounts have been charged to income in respect of the gratuity plan: Current service cost Interest cost Past service cost non vested Actuarial loss charge Expected return on plan assets Actual return on plan assets 11,059 13,551 1,836 871 (9,955) 17,362 13,224

39.10 Unrecognised actuarial losses Net unrecognised actuarial (gains)/losses at July 1, 2010 / 2009 Actuarial loss/(gain) on obligations Actuarial loss/(gain) on assets Subtotal Actuarial gain/(loss) recognised 54 Unrecognised actuarial (gain) / loss as at June 30 22,615 3,990 (3,269) 23,336 (871) 22,465 23,871 3,186 (3,305) 23,752 (1,137) 22,615

39.11 Amounts for the current period and previous four annual periods of the fair value of plan assets, present value of the defined benefit obligation and the deficit arising thereon are as follows: 2011 As at June 30 Present value of defined benefit obligation Fair value of plan assets Deficit Experience adjustment: Gain / (loss) on plan assets (as percentage of plan assets) Loss on obligations (as a percentage of obligation) 2010 2009 (Rupees in 000) 2008 2007

135,044 (107,068) 27,976

112,924 (82,962) 29,962

90,954 (57,899) 33,055

72,505 (49,149) 23,356

62,378 (42,781) 19,597

3.05 2.95

3.98 2.82

(8.32) 5.83

(4.46) 4.75

8.28 5.94

39.12 Plan assets comprise of the following:

2011 (Rupees in 000) Percentage 11,550 78,679 16,839 107,068 10.79 73.49 15.72 100.00

2010 (Rupees in 000) Percentage 10,447 2,055 70,460 82,962 12.59 2.48 84.93 100.00

Shares and units of mutual funds Debt Cash

39.13 The expected return on plan assets is based on the market expectations and depends upon the asset portfolio of the company, at the beginning of the period, for returns over the entire life of related obligation. 39.14 Expected contribution to post employment benefit plan for the year ending June 30, 2012 is Rs 19.281 million (2011: Rs 17.362 million). 40. PLANT CAPACITY AND ACTUAL PRODUCTION 2011 2010 (Quantities in tons) Capacity Production The underutilisation of capacity was due to market constraints. 41. DATE OF AUTHORISATION FOR ISSUE These financial statements were authorised for issue on July 28, 2011 by the board of directors of the company. 208,460 135,426 144,460 117,344

Zulfiqar Ali Lakhani Chief Executive

Tasleemuddin Ahmed Batlay Director

55

PATTERN OF SHAREHOLDING
Held by the Shareholders as at June 30, 2011 Incorporation Number K-5010 OF 1997-78 CUIN Registration NO.005832 No of shareholders 338 159 68 84 6 5 1 1 1 1 1 2 1 1 1 1 1 1 1 674 Categories of shareholders Directors, Chief Executive Officer, and their spouses and minor children Associated Companies, undertakings and related parties NIT and ICP Banks, Development Financial Institutions, Non Banking Financial Institutions Insurance Companies Modarabas and Mutual Funds Shareholders holding 10% General Public a. Local b. Foreign From 1 101 501 1,001 5,001 10,001 15,001 25,001 30,001 40,001 90,001 105,001 240,001 1,655,001 2,475,001 2,915,001 5,110,001 8,920,001 9,475,001 Total Shareholdings 100 500 1,000 5,000 10,000 15,000 20,000 30,000 35,000 45,000 95,000 110,000 245,000 1,660,000 2,480,000 2,920,000 5,115,000 8,925,000 9,480,000 To Shares Shares Shares Shares Shares Shares Shares Shares Shares Shares Shares Shares Shares Shares Shares Shares Shares Shares Shares Total shares held 6,413 39,253 43,566 171,757 40,308 57,574 16,102 28,184 32,218 43,180 92,923 214,882 240,764 1,656,185 2,478,352 2,918,779 5,111,580 8,921,591 9,477,252 31,590,863 shares held 357,042 21,102,802 410 8,904 11,621 1,942 23,510,423 549,587 9,570,176 Percentage 1.13 66.80 0.001 0.21 0.04 0.006 74.42 1.74 30.29

Zulfiqar Ali Lakhani Chief Executive

Some of the shareholders are reflected in more than one category.

56

DETAILS OF PATTERN OF SHAREHOLDING AS PER REQUIREMENTS OF CODE OF CORPORATE GOVERNANCE


a) ASSOCIATED COMPANIES, UNDERTAKINGS AND RELATED PARTIES 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. b) M/s. SIZA (Pvt) Limited M/s. SIZA Services (Pvt) Limited M/s. SIZA Commodities (Pvt) Limited M/s. Premier Fashions (Pvt) Limited M/s. Century Insurance Company Limited Mrs. Gulbanoo Lakhani Mr. Sultan Ali Lakhani Mrs. Shaista Sultan Ali Lakhani Mr. Babar Ali Lakhani Mr. Bilal Ali Lakhani Mr. Danish Ali Lakhani Miss Sanam Iqbal Lakhani Mrs. Natasha Lakhani Miss Anushka Zulfiqar Lakhani Miss Anika Amin Lakhani SHARES HELD 2,478,352 8,921,591 2,918,779 5,111,580 11,621 1,656,185 518 354 1,661 623 380 326 126 288 418

NIT AND ICP 1. National Bank of Pakistan, Trustee Deptt. 2. Investment Corporation of Pakistan 257 153

c)

DIRECTORS, CEO AND THEIR SPOUSES AND MINOR CHILDREN 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Mr. Iqbal Ali Lakhani Chairman/Director Mr. Zulfiqar Ali Lakhani Director/Chief Executive Mr. Amin Mohammed Lakhani Director Mr. Tasleemuddin Ahmed Batlay Director Mr. A. Aziz H. Ebrahim Director Mr. Jerome Graham Webb Nominee of Colgate-Palmolive Company, USA Mr. Derrick Samuel Nominee of Colgate-Palmolive Company, USA Mrs. Ronak Iqbal Lakhani W/o. Iqbal Ali Lakhani Mrs. Fatima Lakhani W/o. Zulfiqar Ali Lakhani Mrs. Saira Amin Lakhani W/o. Amin Mohammed Lakhani 3,556 1,032 3,466 1,290 106,322 240,764 205 407 28,184 NIL

d) e) f)

EXECUTIVES PUBLIC SECTOR COMPANIES AND CORPORATIONS BANKS, DEVELOPMENT FINANCIAL INSTITUTIONS, NON-BANKING FINANCIAL INSTITUTIONS, INSURANCE COMPANIES, MODARABAS AND MUTUAL FUNDS: [Other than those reported at a(5)] SHAREHOLDERS HOLDING 10% OR MORE M/s. Colgate-Palmolive Co., USA. [Other than those reported at a(2)& a(4)]

10,846

g)

9,477,252

h)

INDIVIDUALS AND OTHER THAN THOSE MENTIONED ABOVE

614,327 31,590,863 57

OPERATING AND FINANCIAL HIGHLIGHTS


BALANCE SHEET Property,plant and equipment Intangible assets Long term loans and security deposits Current assets Current liabilities TOTAL ASSETS EMPLOYED REPRESENTED BY Equity Paid-up capital Reserves Surplus on revaluation of investments Non-Current liabilities Liabilities against assets subject to finance leases Long term loans,deposits and deferred taxation 315,909 4,057,766 4,373,675 274,704 3,302,442 3,577,146 238,873 2,461,338 2,700,211 191,098 1,950,245 201 2,141,544 152,879 1,553,776 455 1,707,110 122,303 1,175,286 1,367 1,298,956 2010-2011 2,680,784 18,775 22,709 2,722,268 3,687,865 1,668,040 2,019,825 4,742,093 2009-2010 1,873,118 32,155 23,597 1,928,870 2,877,700 1,011,144 1,866,556 3,795,426 2008-2009 2007-2008 (Rupees in 000) 1,168,256 42,074 24,935 1,235,265 2,705,155 1,072,926 1,632,229 2,867,494 963,240 14,715 21,513 999,468 2,138,856 834,290 1,304,566 2,304,034 2006-2007 864,837 17,400 17,706 899,943 1,750,582 818,450 932,132 1,832,075 2005-2006 739,281 23,200 11,534 774,015 1,337,476 699,948 637,528 1,411,543

1,085 368,418 368,418 4,742,093 218,280 218,280 3,795,426 167,283 167,283 2,867,494 162,490 162,490 2,304,034 124,965 124,965 1,832,075 111,502 112,587 1,411,543

PROFIT AND LOSS ACCOUNT Turnover Less : Sales tax & sed : Trade discounts Net turnover Cost of sales Gross profit Administrative,selling and distribution cost Other operating expenses Other operating income Profit from operations Finance costs Profit before taxation Taxation Profit after taxation 18,132,057 2,994,755 986,882 3,981,637 14,150,420 9,989,856 4,160,564 (2,272,942 ) (164,081 ) 72,573 (2,364,450 ) 1,796,114 11,933 1,784,181 616,801 1,167,380 14,583,936 2,260,329 794,297 3,054,626 11,529,310 7,699,401 3,829,909 (1,988,119 ) (156,206 ) 89,644 (2,054,681 ) 1,775,228 11,036 1,764,192 612,553 1,151,639 13,994,706 2,148,237 581,792 2,730,029 11,264,677 8,482,756 2,781,921 (1,527,738 ) (112,508 ) 53,297 (1,586,949 ) 1,194,972 48,867 1,146,105 396,139 749,966 8,976,538 1,323,402 461,773 1,785,175 7,191,363 5,035,128 2,156,235 (1,114,421 ) (119,189 ) 118,259 (1,115,351 ) 1,040,884 19,875 1,021,009 341,716 679,293 7,445,820 1,036,767 424,373 1,461,140 5,984,680 4,054,746 1,929,934 (1,018,144 ) (61,795 ) 61,411 (1,018,528 ) 911,406 14,801 896,605 291,854 604,751 6,286,355 878,335 357,067 1,235,402 5,050,953 3,390,485 1,660,468 (853,001 ) (59,527 ) 34,702 (877,826 ) 782,642 13,309 769,333 270,478 498,855

58

OPERATING AND FINANCIAL HIGHLIGHTS-CONTINUED


2010-2011 FINANCIAL RATIOS RATE OF RETURN Pre tax return on equity Post tax return on equity Return on average capital employed Interest cover PROFITABILITY Gross profit margin - restated Operating profit to sales - restated Pre tax profit to sales - restated Post tax profit to sales - restated LIQUIDITY Current Ratio Quick ratio FINANCIAL GEARING Debt equity ratio Gearing ratio CAPITAL EFFICIENCY Debtors turnover Inventory turnover Total assets turnover Property, plant and equipment turnover INVESTMENT MEASURES PER ORDINARY SHARE Earnings per share - restated Dividend cash (including proposed) Dividend payout (including bonus) Dividend yield Price earning ratio - restated Break-up value - restated Market value - low Market value - high Market value - year end Market capitalization -restated Dividend - Cash Dividend - Bonus shares Rs Rs % % times Rs Rs Rs Rs Rs in Mn % % 36.95 14 42 2 20.82 138.45 556.01 1,008.18 769.25 24,301 140 15 36.45 13.50 36 3 16.09 113.23 277.26 658.99 586.40 18,525 135 15 23.74 11.50 41 5 11.79 85.47 261.74 689.90 280.00 8,845 115 15 21.50 10.00 35 2 29.06 67.79 430 825 624.79 19,738 100 25 19.14 16.00 47 4 24.55 54.04 325.00 480.00 470.00 14,848 160 25 15.79 16.00 57 5 21.91 41.12 175.00 371.15 346.00 10,930 160 25 days days times times 8 67 2 5 10 58 2 6 11 46 3 9 9 65 2 7 9 63 2 7 8 62 2 7 ratio times 0:100 0.47 0:100 0.34 0:100 0.46 0:100 0.47 1:99 0.55 1:99 0.63 ratio ratio 2.2:1 0.8:0 2.8:1 1.5:1 2.5:1 1.5:1 2.6:1 1.3:1 2.1:1 1.2:1 1.9:1 1.0:1 % % % % 29 13 13 8 33 15 15 10 25 11 10 7 30 14 14 9 32 15 15 10 33 15 15 10 % % % times 41 27 27 151 49 32 35 161 42 28 29 24 48 32 33 52 53 35 37 62 59 38 40 59 2009-2010 2008-2009 2007-2008 2006-2007 2005-2006

59

FORM OF PROXY
I/We of a member of COLGATE-PALMOLIVE (PAKISTAN) LIMITED hereby appoint of or failing him of who is/are also member/s of Colgate-Palmolive (Pakistan) Limited to act as my/our proxy and to vote for me/us and on my/our behalf at the Annual General Meeting of the shareholders of the Company to be held on the 12th day of September 2011 and at any adjournment thereof.

Signed this Folio No.

day of CDC Participant ID No. CDC Account/ Sub-Account No.

2011. No. of Shares held Signature over Revenue Stamp

Witness 1 Signature Name CNIC No. Address

Witness 2 Signature Name CNIC No. Address

Notes:

1. 2. 3.

The proxy must be a member of the Company. The signature must tally with the specimen signature/s registered with the Company. If a proxy is granted by a member who has deposited his/her shares in Central Depository Company of Pakistan Limited, the proxy must be accompanied with participants ID number and CDC account/sub-account number alongwith attested photocopies of Computerized National Identity Card (CNIC) or the Passport of the beneficial owner. Representatives of corporate members should bring the usual documents required for such purpose. The instrument of Proxy properly completed should be deposited at the Registered Office of the Company not less that 48 hours before the time of the meeting.

4.

Fold Here

AFFIX CORRECT POSTAGE

Company Secretary COLGATE-PALMOLIVE (PAKISTAN) LIMITED Lakson Square, Building No. 2, Sarwar Shaheed Road, Karachi.74200. Phone: 35698000
Fold Here
Fold Here Fold Here Fold Here Fold Here