Colgate Pakistan Financial Report 2012

CONTENTS
Company Information
Core Values
Our Equities and Initiatives
Notice of Annual General Meeting
Financial Summary
10
Directors Report
11
Statement of Value Added
16
Statement of Compliance with the Code of Corporate Governance
17
Review Report to the Members on Statement of Compliance with

best Practices of Code of Corporate Governance
19
Auditors Report to the Members
20
Balance Sheet
21
Profit and Loss Account
22
Statement of Changes in Equity
23
Cash Flow Statement
24
Notes to and Forming Part of the Financial Statements
25
Pattern of Shareholding
55
Operating and Financial Highlights
57
Form of Proxy
1
COMPANY INFORMATION
BOARD OF DIRECTORS
Iqbal Ali Lakhani
Amin Mohammed Lakhani
Tasleemuddin Ahmed Batlay
Jerome Graham Webb
Derrick Samuel (upto 26 April, 2012)
Mukul Deoras (from 26 April, 2012)
A. Aziz H. Ebrahim
Zulfiqar Ali Lakhani
Chairman
Chief Executive
ADVISOR
Sultan Ali Lakhani
AUDIT COMMITTEE
Iqbal Ali Lakhani
Amin Mohammed Lakhani
Chairman
HUMAN RESOURCE &

REMUNERATION COMMITTEE
Iqbal Ali Lakhani
A. Aziz H. Ebrahim
COMPANY SECRETARY
Mansoor Ahmed
AUDITORS
A. F. Ferguson & Co.
Chartered Accountants
INTERNAL AUDITORS
BDO Ebrahim & Co.
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
2
Chairman
NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the 34th Annual General Meeting of COLGATE-PALMOLIVE (PAKISTAN) LIMITED
will be held on Monday, September 24, 2012 at 10:30 a.m. at Auditorium of Institute of Chartered Accountants of
Pakistan, Clifton, Karachi to transact the following business:
ORDINARY BUSINESS
1. To receive, consider and adopt the audited financial statements for the year ended June 30, 2012 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 @ 20% i.e. in the proportion of one share for every five 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, to increase the authorized capital of the Company from Rs. 400,000,000 to Rs. 750,000,000 divided
into 75,000,000 ordinary shares of Rs. 10 each and if thought fit to pass a special resolution in the matter.
5. To consider, subject to declaration of the final dividend as above, capitalization of a sum of Rs. 72,658,980 by way
of issue of 7,265,898 fully paid bonus shares of Rs.10 each and if thought fit to pass an ordinary resolution in the
matter.
Statement under section 160 of the Companies Ordinance, 1984 in the above matters containing draft of the resolutions
to be passed pertaining to items No. 4 and 5 is annexed.
By Order of the Board
KARACHI: August 13, 2012
MANSOOR AHMED
Company Secretary
NOTES:
1. The share transfer books of the Company will remain closed from September 18, 2012 to September 24, 2012, 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 17, 2012 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.
8
7. Form of Proxy is enclosed herewith.
STATEMENT UNDER SECTION 160 OF THE COMPANIES ORDINANCE, 1984

PERTAINING TO ITEM NO. 4
At present the authorized capital of the Company is Rs.400,000,000 and the paid-up capital is Rs.363,294,920. The
Board of Directors recommends to increase the authorized capital to Rs.750,000,000 in order to facilitate increase in
the paid-up capital as and when required to do so, and if thought fit by the members to pass the following resolution
as a special resolution:
"RESOLVED THAT the authorized capital of the Company be and is hereby increased to Rs.750,000,000 by
creation of 35,000,000 new ordinary shares of Rs.10 each and that clause V of the Memorandum of Association
and Article 3 of the Articles of Association of the Company be and are hereby amended accordingly.
PERTAINING TO ITEM NO.5
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 @ 20% for the year ended June 30, 2012. 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.72,658,980 out of the profit for the year ended June 30, 2012 be capitalized and applied in making
payment in full of 7,265,898 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
24, 2012 @ 20% i.e. in the proportion of one share for every five 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, 2012;
ii)
in the event of any member holding less than five shares or a number of shares which is not an exact multiple
of five, 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;
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 dividend and bonus shares as
ordinary shareholders.
FINANCIAL SUMMARY
Year Ended June 30, 2012
Gross sales
Rs in million
25,000
Shareholders' equity
Rs in million
23,328
6,000
Earnings Per Share

Rupees
5,554
45.00
44.58
40.00
20,000
5,000
18,132
4,000
15,000
35.00
4,374
31.70
32.13
30.00
3,577
25.00
14,584
3,000
10,000
20.00
15.00
2,000
10.00
5,000
5.00
1,000
2010
2011
2012
2010
2011
2010
2012
2011
2012
Year ended June 30

Rupees in million except EPS
Gross Sales
Operating Income
Net Profit After Tax
Earnings per share - restated (Rs.)
Shareholders' Equity
10
2010
2011
% Change
2012
% Change
14,584
1,775
1,152
31.70
3,577
18,132
1,796
1,167
32.13
4,374
24.3%
1.2%
1.3%
1.4%
22.3%
23,328
2,258
1,620
44.58
5,554
28.7%
25.7%
38.8%
38.7%
27.0%
DIRECTORS REPORT
The Directors of your company are pleased to present the Annual Report with the audited financial statements of the
Company for the year ended June 30, 2012.
Financial Performance at a Glance
Net profits of the Company increased by 38.74% to PKR 1.62 billion as compared to PKR 1.17billion last year backed
by strong top-line growth of 28.66%. Earnings per Share also increased by 38.75% to PKR 44.58 as compared to PKR
32.13 last year. Net Sales for the year closed at PKR 18.71 billion as compared to PKR 14.15 billion last year. The
revenue growth was achieved through steady volume growth generated by timely media spending,effective in-store
promotions, and relevant brand activations. Careful price adjustments, where necessary, were also made to protect
margins from increase in raw material prices.
Gross Profit margin decreased to 28.92% as compared to 29.40% last year primarily due to increase in raw and packing
material costs. During the year under review, cost of goods sold increased by 33.12% to PKR 13.30 billion as compared
to PKR 9.99 billion last year.
Despite the dampening effect of increase in raw material prices on our margins, we were able to increase our spending
on media and sales promotions to further consolidate our market position. Our media and promotions spending increased
by 43.08% to PKR 1.60 billion as compared to PKR 1.12 billion last year. Other than media and promotion spending,
our sales and distribution expenses and administrative expenses increased by 22.84% & 15.75% respectively, which
we consider to be in line with growth in our operations, general price inflation, increase in oil prices and other expenses.
Financial Position at a Glance
Cash and Cash Equivalents increased by 35.39% closing at PKR 0.84 billion as compared to PKR 0.62 billion as of
the same date last year. Net assets of the Company also increased by 26.99% closing at PKR 5.55 billion compared
to PKR 4.37 billion as of same date last year.
A brief financial analysis is presented as under:
2011-12
Rs. in million
2010-11
Rs. in million
Gross Revenue
23,328
18,132
28.66 %
Net Revenue
18,709
14,150
32.21 %
Gross Profit
5,410
4,161
30.03%
Gross Profit %
28.9%
29.4%
- 50 bps
Operating Profit
2,258
1,796
25.72 %
Profit After Tax
1,620
1,167
38.74 %
Profit After Tax (% of Sales)
8.7%
8.2%
50 bps
Earnings per Share
44.58
32.13
38.75 %
Operating Results
Increased By
11
Profit and Appropriations
Profit After Tax

Un-appropriated profit brought forward
Profit available for appropriation
2011-12
Rs. in thousand
1,619,635
4,651
1,624,286
Appropriations:
Proposed Cash Dividend
@ 140% i.e. Rs. 14.00 per share
(2011: @ 140% i.e. Rs. 14 per share)
508,613
Reserve for proposed issue of bonus shares

@ 20% i.e. 4 shares for every 20 shares
(2011: @ 15% i.e. 3 shares for every 20 shares)
Transfer to General Reserve
Un-appropriated profit carried forward
72,659
1,040,000
3,014
Keynote on Business Performance

Our strategy of driving growth with innovative new products is key to our profitable growth. A major insight which
strengthened Brite's equity in the market was the development of Brite Antibacterial, a detergent powder formulated
to be highly effective in removing germs from clothes. Offering both added value and convenience, this first of its kind
detergent has been well accepted by trade and consumers this year.
We also revitalized our Lemon Max range to meet the growing consumer needs for quality products further reinforcing
our leadership position in an increasingly competitive dishwashing category. Other brands in our Home Care category
such as Brite Maximum Power, Bonus Active and Bonus Tristar also continue to grow in volume and market share.
Furthermore, our leadership in Toothpastes is strengthened with continuous improvement by engaging with our consumers
through initiatives in oral health education and community outreach programs such as " Bright Smiles Bright Futures "
and Oral Health Month in which we partnered with dental professionals and retailers.
All these initiatives were well supported by an effective mix of advertising, brand activations and PR activities that
maximized our reach to consumers thus generating trial of our products.
Your Company also continued its investment behind increasing its distribution network to make our products available
to consumers in both urban and rural markets which contributed towards improving their standard of living. We remained
focused in providing our retail partners and shoppers the best service and value to deliver incremental growth.
Human Resource Management
Our commitment to excellence plays a significant role in our ability to be successful. This commitment enables us to
continue investing behind talent development of our people across all functional departments. They are provided with
a learning environment that encourages and fosters new ideas, initiatives and teamwork. In addition, our global elearning program, sharing of best practices and exposure to international training programs are aimed at increasing
the skills and competencies of our people to equip them to lead in delivering sustainable growth. We are proud to
recognize Colgate people's efforts in supporting our shared goal of becoming the Best Place to Work.
12
In making a difference, we focus on promoting women's participation in the corporate sector and Colgate Women
Network is an excellent example of this. Although it is a fairly recent addition, it has already provided immense opportunities
to women at Colgate to help them balance their professional and personal lives.
Corporate Social Responsibility
We are committed to enhancing the quality of life for people in the communities we serve. Our focus remains on
improving oral hygiene in Pakistan as we understand that good oral health is the key contributor to overall good health.
Our global health education program (Bright Smiles, Bright Futures) has reached over 5.5 million children since its
inception in urban and rural Pakistan. Our mobile dental units are reaching out to people with no access to dental care
services to examine their oral health and educate them about good oral hygiene practices to prevent from dental ailments.
The Dental Health Month that we organize in various cities and villages in Pakistan is partnering with the Dental
Profession to build the awareness of oral hygiene every year.
For over a decade we have been partnering with hundreds of schools across Pakistan to engage thousands of children
into a global art contest based on the theme 'My Bright Smile'. The contest not only provides the children an opportunity
to showcase their talent on an international level but also to learn about good oral hygiene practices. A record breaking
46,500 artworks from these highly talented children were received this year.
To demonstrate our company's beliefs in contributing back to our community and in reducing our impact on environment
Earth Hour was observed.
As part of the Earth Day celebrations a charity drive was also held in which employees of the company donated clothes,
toys and books for less fortunate members of the community.
The Company also made donations amounting to PKR 16.99 million for health, education & social welfare projects.
Recognition
For the 7th time, Company's achievements and overall performance have been recognized by the Management
Association of Pakistan and was awarded 'Corporate Excellence Award' at the 28th 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 7th consecutive time that the Company has been
presented with 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.
Future Outlook
High commodity prices, weakening Pak Rupee, worsening energy crises and poor law & order situation will exert more
pressure on product margins. Coupled with intensifying competition and ever changing market dynamics, the Company
will experience more pressures on the business in the coming year.
We are however confident about the future prospects of our Company as the demand for consumer products has been
resilient and is expected to increase further in the years to come as we see a growing middle class in Pakistan and
an ever increasing awareness of consumer products amongst the masses. We are working internally to become more
efficient in everything by becoming more cost effective and are looking to consolidate our position in existing markets
and explore new avenues. We cherish our strong footprint in the markets that we serve and are fully prepared to win
on the ground, despite intense competition.
Financial & Corporate 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).
13
Following are the statements on Corporate and Financial Reporting Framework:
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 on 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.
Summary of key operational and Financial data for the last six years annexed in this annual report.
Information about taxes and levies is given in the notes to and forming part of financial statements.
The valuation of investment made by the staff retirement funds based on their respective accounts are as follows:
2011-12
Rs. in million
CPPL Staff Provident Fund
CPPL Staff Gratuity Fund
336.958
138.647
The Board held four (4) meetings during the year. Attendance by each Director was as follows:
Directors Name
Mr. Iqbal Ali Lakhani
Mr. Zulfiqar Ali Lakhani
Mr. Amin Mohammed Lakhani
Mr. Tasleemuddin Ahmed Batlay
Mr. A. Aziz H. Ebrahim
Mr. Jerome Graham Webb - Nominee of CP - USA
Mr. Derrick Samuel (upto April 26, 2012) - Nominee of CP - USA
Mr. Mukul Deoras (From April 26, 2012) - Nominee of CP - USA
The Audit Committee held meetings during the year. Attendance by each member was as follows:
Member's Name
Attendance
4
4
1
3
4
3
3
1
Attendance
4
2
4
The revised terms and conditions of the Chief Executive and a Director of the Company were
approved by the Board for the current term of three years ending on 10 March 2014 as under:
Remuneration
14
: Gross aggregate annual sum not exceeding Rs.27 million

during the term of his tenure upto 10 March 2014
(This will include house rent allowance).
Perquisites and allowances

Bonuses
Electricity, Gas, Water and
Telephone at residence
: As may be determined from year to year and

approved by the Board.
: Bills at actual.
Conveyance
: Company maintained car with driver.
Provident Fund, Medical, Leave

and Retirement Benefits
: As per Company's policy, rules and regulations in force from

time to time.
Mr. Tasleemuddin A. Batlay

Remuneration
: Gross aggregate annual sum not exceeding Rs.8.50 million during the
term of his tenure upto 10 March 2014 (This include house rent allowance).
Perquisites and allowances

Conveyance, Provident Fund,
: Perquisites and allowances, as per Company's policy, rules and regulations
Bonuses, Medical, Leave,
in force from time to time.
Utilities at Residence, Telephone
and Retirement Benefits
Mr. Zulfiqar Ali Lakhani - the Chief Executive and Mr.Tasleemuddin A. Batlay - Director of the Company and
being shareholders of the Company have interest to the extent of remuneration and avail perquisites, benefits
and allowances to which they are entitled.
Auditors
The Auditors, Messrs A. F. Ferguson & Co., Chartered Accountant, retire at the conclusion of the 34th
Annual General Meeting. Being eligible, they have offered themselves for re-appointment.
Pattern of Shareholding
A statement showing pattern of shareholdings of the Company and additional information as at june,30 2012 is included
in the report.
The Board has determined threshold under clause xvi(I) of CCG-2012 in respect of trading of Companys shares by
executives and employees who are drawing annual basic salary of Rs. 1.5 million or more.
Acknowledgement
We take the 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 30, 2012
IQBAL ALI LAKHANI

Chairman
15
STATEMENT OF VALUE ADDED

Year Ended June 30
2012
2011
(Rs. in million)
Wealth Generated
Total revenue net of discount and allowances
22,236
17,218
Bought-in-material and services
15,398
11,610
6,838
5,608
791
638
4,086
3,612
581
17
489
12
1,363
857
6,838
5,608
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
59.8%
60.0%
50.0%
40.0%
19.9%
30.0%
11.6%
8.5%
20.0%
0.2%
10.0%
0.0%
16
To Government
Depreciation &
Retained Profit
To Employees
To Shareholders
To Lenders
STATEMENT OF COMPLIANCE WITH THE

CODE OF CORPORATE GOVERNANCE
FOR THE YEAR ENDED JUNE 30, 2012
This statement is being presented to comply with the Code of Corporate Governance contained in Regulation No. 35
of listing regulations of Karachi & 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 CCG in the following manner:
1.
The Company encourages representation of independent non-executive Directors and Directors representing
minority interests on its Board of Directors. At present the Board includes:
Category
Independent Directors
Names
---
Executive Directors
M/s. Zulfiqar Ali Lakhani and Tasleemuddin A. Batlay
Non-Executive Directors
M/s. Iqbal Ali Lakhani, Amin Mohammed Lakhani,

A. Aziz H. Ebrahim, Jerome Graham Webb and Mukul Deoras
The condition of clause 1(b) of the CCG in relation to independent director will be applicable after election of next
Board of Directors of the Company in March 2014.
2.
The Directors have confirmed that none of them is serving as a Director in more than seven listed companies,
including this Company.
3.
All the resident Directors of the Company are registered as taxpayers and none of them has defaulted in payment
of any loan to a banking company, a DFI or an NBFI.
4.
A casual vacancy occurring on the Board on April 26, 2012 was filled up within 30 days.
5.
The Company has prepared a "Code of Conduct" and has ensured that appropriate steps have been taken
to disseminate it throughout the Company along with its supporting policies and procedures.
6.
The Board has developed a vision/mission statement, overall corporate strategy and significant policies of the
Company. A complete record of particulars of significant policies along with the dates on which they were approved
or amended has been maintained.
7.
All the powers of the Board have been duly exercised and decisions on material transactions, including appointment
and determination of remuneration and terms and conditions of employment of the CEO and executive Director
have been taken by the Board.
8.
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,
along with agenda and working papers, were circulated at least seven days before the meetings. The minutes
of the meetings were appropriately recorded and circulated.
9.
In accordance with the criteria specified on clause (xi) of CCG, majority of Directors of the Company are exempted
from the requirement of directors' training program and rest of the Directors to be trained within specified time.
17
10. During the year, the Board has approved appointment of CFO including their remuneration and terms and conditions
of employment. 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 CCG and fully
describes the salient matters required to be disclosed.
12. The financial statements of the Company were duly endorsed by CEO and CFO before approval of the board.
13. The Directors, CEO and Executives do not hold any interest in the shares of the Company other than that disclosed
in the pattern of shareholding.
14. The Company has complied with all the corporate and financial reporting requirements of the CCG.
15. The Board has formed an Audit Committee. It comprises three members at present two of whom are nonexecutive Directors including the Chairman of the Committee. The condition of clause 1(b) of the CCG in relation
to independent director will be applicable on election of next Board of Directors of the Company.
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 formed an HR and Remuneration Committee. It comprises three members, of whom two are nonexecutive directors and the chairman of the committee is a non executive director.
18. The Board has outsourced internal audit function of the Company to a firm of Chartered Accountants, who are
considered suitably qualified and experienced for the purpose and are conversant with the policies and procedure
of the Company.
19. The statutory auditors of the Company have confirmed that they have been given a satisfactory rating under the
quality control review program of the 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 the Institute of Chartered Accountants of Pakistan.
20. The statutory auditors or the persons associated with them have not been appointed to provide other services
except in accordance with the listing regulations and the auditors have confirmed that they have observed IFAC
guidelines in this regard.
21. The 'closed period', prior to the announcement of interim/final results, and busines decisions, which may materially
affect the market price of Company's securities, was determined and intimated to directors, employees and stock
exchange(s).
22. Material/price sensitive information has been disseminated among all market participants at once through stock
exchange(s).
23. We confirm that all other material principles enshrined in the CCG have been complied with.
Karachi: July 30, 2012

18

Chief Executive

Director
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, 2012 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 (x) 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, 2012.
Karachi, July 30, 2012
A.F. FERGUSON & CO.

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
19
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, 2012 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)
in our opinion, proper books of account have been kept by the company as required by the Companies Ordinance,
1984;
(b)
in our opinion(i)
the balance sheet and profit and loss account together with the notes thereon have been drawn up in
conformity with the Companies Ordinance, 1984, and are in agreement with the books of account and are
further in accordance with accounting policies consistently applied;
(ii)
the expenditure incurred during the year was for the purpose of the company's business; and
(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, 2012 and of the profit, its changes in equity
and cash flows for the year then ended; and
(d)
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.
Karachi, July 30, 2012
A.F. FERGUSON & CO.

Audit Engagement Partner: Saad Kaliya
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>
20
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
BALANCE SHEET
AS AT JUNE 30, 2012
Note
2012
2011
(Rupees in 000)
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
Short term investments - available for sale
Cash and bank balances
4
5
6
7
2,863,125
6,341
9,452
10,712
2,889,630
2,680,784
18,775
13,528
9,181
2,722,268
8
9
10
11
12
13
14
64,952
2,852,671
492,437
92,344
20,198
20,936
29
369,239
255,329
837,882
5,006,017
7,895,647
36,353
2,370,938
321,073
92,674
22,925
50,473
13
174,573
618,843
3,687,865
6,410,133
15
16
TOTAL ASSETS
EQUITY AND LIABILITIES
SHARE CAPITAL AND RESERVES
Authorised share capital
17
400,000
400,000
Issued, subscribed and paid-up share capital

Reserves
Surplus on revaluation of investments
17
18
363,295
5,187,742
3,189
5,554,226
315,909
4,057,766
4,373,675
19
20
458,872
14,748
473,620
354,473
13,945
368,418
21
1,867,778
23
1,867,801
2,341,421
1,667,916
124
1,668,040
2,036,458
7,895,647
6,410,133
LIABILITIES
NON-CURRENT LIABILITIES
Deferred taxation
Long term deposits
CURRENT LIABILITIES
Trade and other payables
Accrued mark-up
TOTAL LIABILITIES
CONTINGENCIES AND COMMITMENTS
23
TOTAL EQUITY AND LIABILITIES

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

Chief Executive

Director
21
PROFIT AND LOSS ACCOUNT

Note
2012
2011
(Rupees in 000)
Turnover
23,327,820
18,132,057
Sales tax
(3,464,671)
(2,778,948)
Special excise duty
(215,807)
Trade discounts
(1,154,438)
Net turnover
18,708,711
14,150,420
(13,298,699)
(9,989,856)
5,410,012
4,160,564
Cost of sales
24
Gross profit
(986,882)
Selling and distribution costs
25
(2,825,054)
(2,115,193)
Administrative expenses
26
(182,596)
(157,749)
Other operating expenses
27
(206,472)
(164,081)
Other operating income
28
62,192
72,573
2,258,082
1,796,114
Profit from operations

Finance cost
29
Profit before taxation
(17,587)
2,240,495
Taxation
30
Profit after taxation
(620,860)
1,619,635
(11,933)
1,784,181
(616,801)
1,167,380
Other comprehensive income for the year

Surplus on investments categorised as 'available for sale'
3,536
Deferred Tax
(347)
3,189
Total comprehensive income for the year
Earnings per share (rupees) - restated
31

Chief Executive
1,622,824
1,167,380
44.58
32.13
22

Director
STATEMENT OF CHANGES IN EQUITY

Issued,
subscribed
and paid-up
share capital
Capital
reserve share
premium
Revenue reserves
General
reserve
Surplus on
Unappropriated revaluation of
investments
profit
Total
(Rupees in 000)
Balance as at July 1, 2010
274,704
13,456
2,130,000
1,158,986)
3,577,146)
1,167,380)
1,167,380)
Transfer to general reserve
740,000
(740,000)
Total other comprehensive income
740,000
(740,000)
Total comprehensive income for the

year ended June 30, 2011
740,000
427,380)
1,167,380)
(370,851)
(370,851)
Bonus shares issued at the rate of three

shares for every twenty shares held
41,205
(41,205)
Total transactions with owners
41,205
(412,056)
(370,851)
315,909
13,456
2,870,000
1,174,310)
4,373,675)
Net profit for the year ended June 30, 2012
1,619,635)
1,619,635)
Other comprehensive income
3,189
Transfer to general reserve
680,000
(680,000)
Total other comprehensive income
680,000
(680,000)
Total comprehensive income for the

year ended June 30, 2012
680,000
939,635)
3,189
1,622,824)
(442,273)
(442,273)
Bonus shares issued at the rate of three

shares for every twenty shares held
47,386
(47,386)
Total transactions with owners
47,386
(489,659)
(442,273)
363,295
13,456
3,550,000
1,624,286)
3,189
5,554,226)
Comprehensive income for the year

Net profit for the year ended June 30, 2011
Other comprehensive income
Transactions with owners

Final dividend for the year ended June 30, 2010
(Rs 13.50 per share)
Balance as at June 30, 2011

Comprehensive income for the year
3,189)
Transactions with owners

Final dividend for the year ended June 30, 2011
(Rs 14 per share)

Chief Executive

Director
23
CASH FLOW STATEMENT

Note
2012
2011
(Rupees in 000)
CASH FLOWS FROM OPERATING ACTIVITIES

Cash generated from operations
Finance costs paid
Taxes paid
Long term loans
Long term deposits
Net cash inflow from operating activities
32
2,109,006
(17,688)
(711,474)
4,076
(1,531)
803
1,383,192
1,485,828
(11,867)
(650,926)
2,249
(2,215)
7,665
830,734
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
(516,482)
(2,955)
(600,000)
14,709
31,934
325
350,496
(994,061)
(5,795)
(200,000)
9,415
48,267
3,087
210,220
Net cash outflow from investing activities
(721,973)
(928,867)
Long term loan

Dividend paid
(442,180)
(625)
(370,420)
Net cash outflow from financing activities
(442,180)
(371,045)
Net increase / (decrease) in cash and cash equivalents
219,039
(469,178)
Cash and cash equivalents at the beginning of the year
618,843
1,088,021
837,882
618,843
CASH FLOWS FROM INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
Cash and cash equivalents at the end of the year
16
24

Chief Executive

Director
NOTES TO AND FORMING PART OF THE

FINANCIAL STATEMENTS
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.
SIGNIFICANT ACCOUNTING INFORMATION AND POLICIES
2.1
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, 2012:
There are certain new standards, amendments and International Financial Reporting Interpretations Committee
(IFRIC) interpretations that became effective during the year and are mandatory for accounting periods beginning
on or after July 1, 2011 but are considered not to be relevant or have any significant effect on the 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:
The following standards, ammendments and interpretations to existing standards have been published and are
mandatory for the Company's accounting period beginning on or after July 1, 2012 or later periods:
IAS 19, 'Employee benefits' (effective for periods beginning on or after January1, 2013). The impact on the
Company will be as follows: to eliminate the corridor approach and recognise all acturial gains and losses in other
comprehensive income as they occur; to immediately recognise all past service costs; and to replace interest
cost and expected return on plan assets with a net interest amount that is calculated by applying the discount
rate to the net defined liability / (asset). The Company is yet to assess the full impact of the amendments.
There are other amendments to the standards and new interpretations that are mandatory for accounting periods
beginning on or after July 1, 2012 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

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.
25
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.
26
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
Basis of valuation
Raw and packing material

Raw and packing material in bonded
warehouse and in transit
Work in process and finished goods
- Moving average cost
Trading goods
- 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.
27
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.
- Gains / (losses) arising on sale of investments are included in income currently and are recognised on the
date when the transaction takes place.
- Unrealised gains / (losses) arising on revaluation of securities classified as 'available for sale' are included
in other comprehensive income in the period in which they arise.
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.
28
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.
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. 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
29
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.
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

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:
3.
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.
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 judgment in the process of
applying the companys accounting policies. Estimates and judgments are continually evaluated and are based
on historic experience and other factors, including expectation of future events that are believed to be reasonable
under the circumstances. In the process of applying the company's accounting policies, the management has
made the following estimates and judgments which are significant to the financial statements:
a)
Assumptions and estimates used in determining the recoverable amount, residual values and useful lives
of property, plant and equipment (note 4);
b)
assumptions and estimates used in determining the useful lives and residual values of intangible assets
(note 5);
c)
assumptions and estimates used in writing down items of stock in trade to their net realisable value (note
9);
d)
assumptions and estimates used in calculating the provision for impairment for trade debts (note 10);
e)
assumptions and estimates used in the recognition of deferred taxation (note 19);
f)
assumptions and estimates used in accounting for defined benefit plan (note 39); and
g)
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
Operating fixed assets

Capital work in progress
30
4.1
4.2
2012
2011
(Rupees in 000)
2,711,483
151,642
2,088,144
592,640
2,863,125
2,680,784
4.1
Operating fixed assets
4.1.1 The following is a statement of operating fixed assets:

Factory
Electric
Leasehold building on Plant and fittings and
Gas
Furniture Tools and
Computers and Office
leasehold machinery installation installation and fixtures equipment Vehicles accessories equipment
land
land
Total
-------------------------------------------------------------------------(Rupee'000)---------------------------------------------------------------------At July 1, 2010

Cost
Accumulated depreciation
Net book value
40,973
40,973
264,174) 1,269,279) 66,268)

(109,409) (447,043) (24,647)
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)
Year ended June 30, 2011

587)
73,031)
1,013)
2,308)
7,321)
19,011)
8,312)
2,184)
144,430)
305,320)
412,093)
31,278)
26,099)
26,943)
2,298)
4,466)
3,351)
811,848)
7,502)
(4,050)
3,452)
(8,235)
4,269)
(3,966)
134)
(120)
14)
(518)
409)
(109)
(1,701)
1,389)
(312)
(17)
12)
(5)
(21,295) (98,804)
442,720) 1,204,278)
(5,048)
68,873)
Additions
30,663
Transfers from capital work in progress
during the year (note 4.2.1)
Transfers with in fixed assets
Cost
Depreciation
Net book value
(1,386)
338)
(1,048)
1,985)
(437)
1,548)
Disposals (note 4.1.7)

Cost
Depreciation
Net book value
(13,218)
6,975)
(6,243)
(250)
191)
(59)
(46)
2)
(44)
(13,514)
7,168)
(6,346)
(732)
635)
(97)
(522)
420)
(102)
(7,067)
5,853)
(1,214)
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
71,636
(1,048)
933)
(115)
(7)
54)
(4,579)
46,710)
(2,529)
2,055)
(474)
(10,024) (21,307)
78,045) 123,946)
(13,382)
24,722)
(4,199) (178,645)
27,160) 2,088,144)

Additions
Transfers from capital work in progress
during the year (note 4.2.1)
18,214
15,798)
167,521)
7,275)
6,053)
24,613)
44,205)
18,713 )
4,093)
288,271)
25,946)
516,606)
17,963)
9,084)
79,355)
1,999)
669,167)
2,254)
(1,525)
729)
(640)
456)
(184)
(15,530)
8,690)
(6,840)
(400)
235)
(165)
(12,458)
10,208)
(2,250)
Transfers with in fixed assets

-
(7,986)
6,211)
(1,775)
(137)
118)
(19)
(867)
750)
(117)
(49,662) (183,098)
434,802) 1,702,803)
(9,283)
84,809)
Cost
Depreciation
Net book value
Write offs (note 4.1.3)

Cost
Depreciation
Net book value
Cost
Depreciation
Net book value
(2,254)
1,525)
(729)
Disposals (note 4.1.7)
Depreciation charge for the year

(note 4.1.8)
89,850
(7)
47)
(14,890)
8,234)
(6,656)
(8,590) (24,235) (25,022)

53,257) 158,390) 136,473)
(3,068)
2,894)
(174)
(19,828)
23,249)
(5,284) (325,009)
27,803) 2,711,483)
31
Factory
Electric
Leasehold building on Plant and fittings and
Gas
Furniture Tools and
Computers and Office
leasehold machinery installation installation and fixtures equipment Vehicles accessories equipment
land
land
Total
-------------------------------------------------------------------------(Rupee'000)---------------------------------------------------------------------At June 30, 2011

Cost
Net book value
71,636 577,065) 1,744,467)

-
98,676)
154)
(134,345) (540,189) (29,803)
(100)
(8,679)
(51,778) (109,197)
54)
46,710)
78,045) 123,946)
71,636 442,720) 1,204,278)
68,873)
55,389) 129,823) 233,143)
62,954)
43,195) 3,016,502)
(38,232) (16,035)
24,722)
(928,358)
27,160) 2,088,144)
Annual rates of depreciation (%)

2011
10
10
10
10
15
15
20
33
15
At June 30, 2012

Cost
Net book value
89,850 618,809) 2,418,354) 123,777)
154)
(184,007) (715,551) (38,968)
(107)
89,850 434,802) 1,702,803)
84,809)
47)
70,526) 235,178) 262,458)

(17,269)
(76,788) (125,985)
53,257) 158,390) 136,473)
77,959)
48,887) 3,945,952)
(54,710) (21,084) (1,234,469)

23,249)
27,803) 2,711,483)
Annual rates of depreciation (%)

2012
10
10
10
10
15
15
20
33
15
4.1.2 Included in fixed assets are few items having cost of Rs 22.332 million (2011: Rs 29.045 million) held by related
parties and of Rs 43.614 million (2011: Rs 42.375 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 12.458 million (2011: Rs
7.067 million) and net book value of Rs 2.250 million (2011: Rs 1.214 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 No impairment relating to operating fixed assets has been recognised in the current year.
4.1.5 The following operating fixed assets with a net book value exceeding Rs 50,000 were disposed of during the
year:
32
Particulars
Mode of disposal
Vehicles
Maturity Of Company's Car Scheme
Cost
Accumulated Net book

depreciation value
Sale proceeds / Gain /

receivable from (loss)
insurance company
----------------------- (Rupees in 000) -----------------------
846
649
197
538
341
Mohsin Fatmi,
Employee of the company
--do--
1,060
526
534
863
329
Adeel Jafri,
Ex-Employee of the company
--do--
490
115
375
375
Shoukat Fareed,
--do--
504
401
103
240
137
Hassan Imam,
--do--
674
294
380
451
71
Zainab Kaleem,
--do--
320
215
105
105
Shoaib Ansari,
--do--
320
215
105
105
Muhammad Yaseen Khan,

--do--
320
215
105
105
Shamshad Ahmed Khan,

--do--
1,336
978
358
601
243
Ashraf Kapraywala,
Maturity of Company's Maintained

Car Scheme
504
303
201
500
299
Kamran Qamar,
--do--
499
170
329
410
81
Saad Mehmood Khan,

Ex- Employee of the company
--do--
524
21
503
520
17
Mohammad Atif Zain,

--do--
835
628
207
551
344
Monis Siddiqui,
--do--
240
150
90
217
127
Shehzad Qamar,
1,005
576
429
955
526
Khalid Hussain Wassan,

Plot No. 528-A, 9th Street,
Phase VII EXT, DHA, Karachi
793
170
623
1,200
577
Lakson Investment Limited

Lakson Square Builidng No. 2,
Sarwar Shaheed Road Karachi
239
164
75
700
625
Rehman Laskar Khail, Noshera
239
179
60
700
640
Rehman Laskar Khail, Noshera
--do--
560
391
169
468
299
Ali Diamond Pirani C-21, Noor Apartment,

FI-7,Block-E,N.Nazimabad, Karachi
--do--
1,437
981
456
825
369
Zubair Ahmed House No. 302,

Block-8, Azizabad, Karachi
399
112
287
370
83
Century Insurance Co. Ltd,

Lakson Square Building No. 3,
Sarwar Shaheed Road Karachi
1,269
406
863
1,240
377
--do--
85
33
52
54
--do---do--
Bid
--do---do---do--
Insurance claim
--do-Computer &
Accessories
Particulars of purchasers
Insurance claim
85
14
71
80
14,583
7,906
6,677
12,173
5,496
947
784
163
2,536
2,373
2012
15,530
8,690
6,840
14,709
7,869
2011
13,514
7,168
6,346
9,415
3,069
--do-Others
Items having net Various
book value of
less than Rs.
50,000 each
Various
33
4.1.6 Depreciation charge for the year has been allocated as follows:
Note
Cost of sales
4.2
2012
2011
(Rupees in 000)
24.1
281,172
142,310
25
27,722
22,568
26
16,115
13,767
325,009
178,645
Capital work in progress
4.2.1 The following is a statement of capital work in progress:
Leasehold
Land
Electric
fittings
and
installation
(Rupees in 000)
Plant
and
machinery
Other
assets
Total
161,953)
362,866)
20,779)
9,449)
555,047)
Capital expenditure incurred

during the year
10,000)
137,594)
604,033)
26,459)
71,545)
849,631)
Capital expenditure charged

off during the year
(144)
(36)
(10)
(190)
Transfers
21,650)
(16,688)
(4,962)
Transfers to operating
fixed assets (note 4.1.1)
(305,320)
(412,093)
(31,278)
(63,157)
(811,848)
Balance as at July 1, 2010
10,000)
15,733)
538,118))
15,924)
12,865)
592,640)
Capital expenditure incurred

during the year
8,214)
29,706)
165,187)
6,006)
19,098)
228,211)
(42)
Capital expenditure charged

off during the year
Transfers
Transfers to operating
fixed assets (note 4.1.1)
34
Factory
building on
leasehold
land
(42)
(1,158)
(57,983)
59,141)
(18,214)
(25,946)
(516,606)
(17,963)
(90,438)
(669,167)
18,335)
128,716)
3,967)
624)
151,642)
5.
INTANGIBLE ASSETS
Note
At July 1, 2010
Cost
Accumulated amortisation
Net book value
Goodwill
43,500
(43,500)
-

Additions
Amortisation for the year
5.3

Additions
Amortisation for the year
5.3
Computer
software
(Rupees in 000)
Total
52,590
(20,435)
32,155
96,090
(63,935)
32,155
5,795
37,950
(19,175)
18,775
5,795
37,950
(19,175)
18,775
2,955
21,730
(15,389)
6,341
2,955
21,730
(15,389)
6,341
At June 30, 2011

Cost
Net book value
43,500
(43,500)
-
58,000
(39,225)
18,775
101,500
(82,725)
18,775
At June 30, 2012

Cost
Net book value
43,500
(43,500)
-
60,955
(54,614)
6,341
104,455
(98,114)
6,341
5.1
Goodwill includes amount paid on acquisition of the brand Sparkle from Transpak Corporation Limited and 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.
5.2
Computer softwares are being amortised over a useful life of 3 years.
5.3
Amortisation charge for the year has been allocated as follows:

Note
6.
6.1
2012
2011
(Rupees in 000)
25
26
440
14,949
15,389
5,286
13,889
19,175
Considered good
- due from executives
- due from other employees
6.1, 6.2 & 6.3

6.2
Recoverable within one year
11
3,600
15,110
18,710
(9,258)
6,282
18,006
24,288
(10,760)
9,452
13,528
6,282
185
(2,867)
3,600
9,206
1,850
(4,774)
6,282
LONG TERM LOANS
Reconciliation of carrying amount of loans to executives:

Opening balance as at July 1, 2011 / 2010
Disbursements
Repayments
Closing balance as at June 30
35
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.
6.3
The maximum aggregate amount of loans due from executives at the end of any month during the year was Rs
5.946 million (2011: Rs 10.084 million ).
6.4
Long term loans have been carried at cost as the effect of carrying these balances at amortised cost would not
be material.
Note
7.
LONG TERM SECURITY DEPOSITS

7.1 & 7.2
10,712
9,181
7.1
This includes amount of Rs 4.410 million (2011: Rs 4.410 million) representing amount deposited with Water and
Power Development Authority (WAPDA) for enhancement in electricity load for detergent unit at Kotri.
7.2
This includes a Term Deposit Receipt (TDR) amounting to Rs 1.7 million (2011: 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% (2011: 7.226%) per annum and shall mature on
September 1, 2012 at which time the management intends to rollover the TDR.
8.
STORES AND SPARES

Stores
Spares
8.1
33,905
31,047
26,819
9,534
24.1.3
64,952
36,353
24.1.1
1,070,231
83,551
665,041
1,818,823
810,209
358,175
397,096
1,565,480
24.1.2
203,022
1,323
246
204,591
173,704
18,194
91
191,989
24.1
185,395
68,132
553,583
11
553,594
412,069
341
412,410
82,767
7,501
90,268
2,852,671
129,664
3,263
132,927
2,370,938
8.1
This includes spares in transit amounting to Rs 6.131 million (2011: Rs 0.576 million).
9.
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
36
2012
2011
(Rupees in 000)
Note
10.
TRADE DEBTS
Considered good
- due from related parties
- others
10.1 & 10.2
Considered doubtful
- others
Less: Provision for impairment
10.1
10.3 & 10.5
2012
2011
(Rupees in 000)
50,747
441,690
492,437
718
320,355
321,073
30,943
523,380
30,943
492,437
30,594
351,667
30,594
321,073
41
49,288
109
1,124
4
169
1
11
50,747
25
23
555
4
3
99
9
718
Trade debts include the following amounts due from related parties:
Merit Packaging Limited
Rollins Industries (Private) 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
10.2
The maximum aggregate amount of receivable due from related parties at the end of any month during the year
was Rs 93.180 million (2011: Rs 53.269 million).
10.3
Provision for impairment

Balance as at July 1, 2011 / 2010
Provision made during the year
Balance as at June 30
10.4
27
25,080
34,161
16,839
76,080
12,789
24,083
43,297
80,169
As at June 30, 2012, trade receivables of Rs 30.943 million (2011: Rs 30.594 million) were impaired and provided
for. The ageing of these receivables is as follows:
One year to five years
Five years and over
11.
21,628
8,966
30,594
As at June 30, 2012, trade receivables of Rs 76.080 million (2011: Rs 80.169 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
10.5
30,594
349
30,943
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
23,731
7,212
30,943
23,382
7,212
30,594
2,309
6,949
9,258
3,017
7,743
10,760
9,411
73,675
92,344
9,899
72,015
92,674
37
11.1
Advances to employees are provided to meet business expenses and are settled as and when the expenses are
incurred.
Note
11.2
Advances include the following amounts due from related parties:

Century Insurance Company Limited
Century Publication (Private) Limited
12.
393
611
1,992
2,996
4,885
15,313
20,198
5,780
17,145
22,925
6,426
5,421
8,720
369
20,936
7,930
500
41,439
604
50,473
639
5,778
9
6,426
134
742
7,054
7,930
OTHER RECEIVABLES
Receivable from related parties
Value Added Tax claimable
Special excise duties claimable
Claims receivable from an insurance company
Sales tax refundable
Others
13.1
917
1,039
1,956
TRADE DEPOSITS AND SHORT TERM PREPAYMENTS

Security deposits
Prepayments
13.
2012
2011
(Rupees in 000)
13.1 & 13.2
Other receivables include the following amounts due from related parties:
Clover Pakistan Limited
13.2
The maximum aggregate amount receivable from related parties at the end of any month during the year was
Rs 21.891 million (2011: Rs 20.938 million).
14.
PROFIT RECEIVABLE FROM BANKS

Profit on savings and term deposit accounts
Profit on a term deposit receipt
15.
SHORT TERM INVESTMENTS - AVAILABLE FOR SALE
Balance as at July 1, 2011 / 2010

Purchases
Bonus
Redemption
29
29
3
10
13
2012
2011
No. of Units
5,968,430
52,190
(3,488,661)
2,531,959
1,976,497
94,073
(2,070,570)
-
2012
2011
(Rupees in 000)
Carrying value
Market value
Unrealised gain
38
251,793
255,329
3,536
15.1
These represent investments made during the year in Lakson Money Market Fund, a related party of the Company.
16.
CASH AND BANK BALANCES

With banks on:
- Current accounts
- Savings accounts
Note
16.1
Cheques in hand
Cash in hand
2012
2011
(Rupees in 000)
269,089
545,452
814,541
22,715
626
837,882
140,060
424,149
564,209
54,376
258
618,843
16.1
The range of rates of profit on these savings accounts is between 6% to 11.75% per annum (2011: 5% to 11.75%
per annum).
17.
SHARE CAPITAL
17.1
Authorised Capital
2012
2011
Number of shares
40,000,000
17.2
40,000,000 Ordinary shares of Rs 10 each
2012
2011
(Rupees in 000)
400,000
400,000
58,824
58,824
Issued, subscribed and paid-up capital

5,882,353
5,882,353 Ordinary shares of Rs 10 each

fully paid in cash
30,447,142
Ordinay shares of Rs 10 each

25,708,512 issued as fully paid bonus shares (note 17.3)
304,471
257,085
36,329,495
31,590,865
363,295
315,909
17.3
These shares include 4,738,630 bonus shares of Rs 10 each (2011: 4,120,547 bonus shares of Rs 10 each)
issued by the company during the current year.
18.
RESERVES
Capital reserve
- Share premium reserve
Revenue reserve
- General reserve
- Unappropriated profit
19.
13,456
13,456
3,550,000
1,624,286
5,187,742
2,870,000
1,174,310
4,057,766
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
Other
20.
474,746
(5,789)
347
(10,626)
194
458,872
370,329
(5,148)
(10,708)
354,473
14,243
500
5
14,748
13,440
500
5
13,945
LONG TERM DEPOSITS

Security deposits obtained from:
- Distributors
- Transporters
- Others
39
20.1
These deposits are interest free and are not refundable during the subsistence of relationship with the company.
Note
21.
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
21.1
21.1
21.2
21.3
21.4
Less: Payments during the year

Balance at the end of the year
603
11,460
24,212
84
36,359
62
1,176
42
1,280
580
995
1,575
27
95,821
120,327
216,148
95,821
120,327
94,709
95,821
190,530
94,709
95,821
327
327
3,397
299
3,696
These balances include the following amounts due to related parties:

Colgate-Palmolive Pakistan Limited Employees
Contributory Provident Fund Trust
Colgate-Palmolive (Hong Kong) Limited
40
49
10,524
145
3,880
33,903
8,443
354
1,206
58,504
Workers' profits participation fund

Balance at the beginning of the year
Allocation for the year
21.4
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

Century Paper & Board Mills Limited
21.3
554,043
342,285
554,124
31,159
85,940
78,500
120,327
82,136
5,447
2,698
11,119
1,867,778

Reliance Chemicals (Private) Limited
Rollins Industries(Private) Limited
Princeton Travels (Private) Limited
21.2
2012
2011
(Rupees in 000)
22.
SHORT TERM RUNNING FINANCES
22.1
The company has arranged short-term borrowing facilities from various banks on mark-up basis to the extent of
Rs 1,040 million (2011: 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 30, 2012 to March 31, 2013. 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.
22.2
The mark-up on short-term running finance facilities ranges between 12.67% to 14.04% (2011: 14.27% to
16.00% ) per annum.
22.3
The facilities for opening letters of credit and guarantee as at June 30, 2012 aggregated Rs 4,110 million and
Rs 40 million (2011: Rs 3,781.175 million and Rs 30 million) respectively of which the amounts remaining
unutilised at the year end were Rs 3,347.827 million and Rs 10.454 million (2011: Rs 2,954.091 million and Rs
9 million) respectively.
23.
CONTINGENCIES AND COMMITMENTS
23.1
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 0.804 million (2011:
Rs 1.541 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 360.031 million (2011: Rs 382.324 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 29.547 million (2011: Rs 21 million).
23.2
Commitments
23.2.1 Commitments in respect of capital expenditure amount to Rs 222.852 million (2011: Rs 101.898 million).
23.2.2 Outstanding letters of credit and acceptances amount to Rs 500.560 million (2011: Rs 759.004 million).
23.2.3 Outstanding duties leviable on clearing of stocks amount to Rs 12.612 million (2011: 16.027 million).
Note
24.
2012
2011
(Rupees in 000)
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
545,337
11,370,804
2,026,420
398,517
8,468,757
1,667,919
13,942,561
643,862
10,535,193
545,337
13,298,699
9,989,856
41
Note
24.1
2012
2011
(Rupees in 000)
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: Closing stock of work in process
24.1.1 & 24.2

24.1.2 & 24.2
24.1.3
39.8
4.1.8
24.1.1 Raw materials consumed

Opening stock
Purchases
Less: Closing stock
68,132
7,964,119
2,208,011
39,869
424,195
11,447
7,690
278,210
23,656
8,884
24,839
4,753
168,769
281,172
42,453
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
11,556,199
185,395
8,536,889
68,132
11,370,804
8,468,757
1,565,480
8,217,462
773,992
6,628,126
9,782,942
1,818,823
7,402,118
1,565,480
7,964,119
5,836,638
191,989
2,220,613
109,329
1,867,521
2,412,602
204,591
1,976,850
191,989
2,208,011
1,784,861
36,352
68,469
18,805
47,437
104,821
64,952
66,242
36,353
39,869
29,889
24.1.2 Packing materials consumed

Opening stock
Purchases
Less: Closing stock
24.1.3 Stores and spares consumed

Opening stock
Purchases
Less: Closing stock
24.2
Cost of sales includes amounts written off during the year in respect of the following:
- Raw materials
42
15,263
- Packing materials
1,746
- Finished Goods
1,190
Note
25.
SELLING AND DISTRIBUTION COSTS

Provident fund
Travelling and conveyance
Vehicle running expenses
Advertising and sales promotion
Royalty on sale of licensed products
Postage, telephone and internet charges
Printing and stationery
Subscription and membership
Legal and professional
Freight
Electricity
Insurance
Security service charges
Depreciation
Amortisation
Other expenses
39.8
4.1.8
5.3
Less: Recovery from related parties

26.
39.8
4.1.8
5.3
Less: Recovery from related parties
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
90,279
4,001
3,492
5,422
8,852
9,338
3,276
4,664
1,867
4,526
1,689
2,734
7,523
4,117
16,115
14,949
484
183,328
732
182,596
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
120,327
45,724
1,567
2,250
16,995
349
19,260
206,472
95,821
36,412
1,057
1,214
17,343
8,966
3,268
164,081
600
650
317
1,567
480
470
107
1,057
OTHER OPERATING EXPENSES

Workers profits participation fund
Workers welfare fund
Auditors remuneration
Property, plant and equipment - written off
Donations
Provision for impairment - trade debts
Net exchange loss
27.1
239,091
3,834
7,394
41,777
3,350
109,771
1,602,710
78,500
12,147
20,112
4,044
3,682
929
624,728
8,672
15,302
6,079
27,722
440
25,873
2,836,157
11,103
2,825,054
ADMINISTRATIVE EXPENSES
Provident fund
Travelling and conveyance
Vehicle running expenses
Postage, telephone and internet charges
Printing and stationery
Subscription and membership
Legal and professional
Electricity
Insurance
Security service charges
Depreciation
Amortisation
Others
27.
2012
2011
(Rupees in 000)
21.3
27.1
4.1.1
27.2
10.3
Auditors remuneration
Audit fee
Fee for half yearly review and other certifications
Out of pocket expenses
43
Note
27.2
2012
2011
(Rupees in 000)
Donations include the following in which a director is interested:

Name of director
Interest
in donee
Name and address of donee
(See note below) Special Olympics Pakistan, 205,

Sunset Tower, Sunset Boulevard,
DHA, Phase-II, Karachi.
300
600
14,400
13,200
1,750
1,500
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.
(See note below) Pakistan Business Council, M-02

Mezzanine Floor, Beaumont Plaza,
10 Beaumont Road, Karachi.
525
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.
2,023
31,931
344
63
2,289
16
45,080
3,063
295
10,220
3,069
9,608
7,869
9,787
285
62,192
4,662
3,069
3,115
72,573
Note: Mr Sultan Ali Lakhani is the trustee of donee organization.

28.
OTHER OPERATING INCOME

Income from financial assets / liabilities
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
Sales tax refund
44
4.1.7
Note
29.
FINANCE COST
Markup on:
- Long term loan
- Short term borrowings
Guarantee commission
Bank commission and other charges
30.
Reconciliation between the average effective tax rate and the applicable tax rate.
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 expenses that are not allowable in determining taxable income
Tax effect of surchage
Tax credits
31.
EARNINGS PER SHARE
577,052
(60,244)
104,052
620,860
472,892
1,436
142,473
616,801
2012
2011
Percentage
35.00
(0.04)
(0.91)
(2.69)
(0.02)
(3.63)
27.71
1,619,635
35.00
(0.09)
(1.51)
0.08
1.09
34.57
1,167,380
(Number of shares)
Weighted average number of ordinary shares outstanding

during the year - restated
36,329,495
Earnings per share - restated
32.
7
622
363
10,941
11,933
2012
2011
(Rupees in 000)
31.1
3,696
309
13,582
17,587
TAXATION
Current
- for the year
- for prior years'
Deferred
30.1
2012
2011
(Rupees in 000)
44.58
36,329,495
(Rupees)
32.13
There are no dilutive potential ordinary shares outstanding as at June 30, 2012 and 2011.
2012
2011
(Rupees in 000)
CASH GENERATED FROM OPERATIONS

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
Gain 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
Working capital changes
2,240,495
32.1
340,398
(7,869)
349
(31,931)
(344)
(2,289)
17,587
19,260
15,263
2,250
42
(484,205)
2,109,006
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
45
32.1
2012
2011
(Rupees in 000)
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:
33.
(28,599)
(496,996)
(171,713)
330
2,727
29,537
(664,714)
(17,548)
(1,051,637)
(13,260)
13,543
(6,953)
(46,282)
(1,122,137)
180,509
(484,205)
658,889
(463,248)
PROPOSED DIVIDEND
The Board of Directors at their meeting held on July 30, 2012 have proposed a cash dividend of Rs 14 per share
(2011: Rs 14 per share) for the year ended June 30, 2012, amounting to Rs 508.613 million (2011: Rs 442.273
million), bonus issue of 7.266 million shares (2011: 4.739 million shares) at the rate of one share for every five
shares held (2011: three shares for every twenty shares held) and transfer to general reserve of Rs 1.040 million
(2011: Rs 680 million) subject to the approval of members at the annual general meeting to be held on September
24, 2012.
34.
RELATED PARTY DISCLOSURES
34.1
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
Televison Media Network (Private) Limited
Lakson Business Solution Limited
46
Note Relationship with

the Company
Associate
Associate
Associate
34.3 Related party
Associate
Associate
Associate
Associate
Associate
Associate
Associate
2012
2011
(Rupees in 000)
307
13,452
40
861,136
25,699
31
20
8
127
29
-
371
15,143
113
571,202
6,937
17
721
15
99
21
1
900,849
594,640

the Company
Purchase of goods, services received and

reimbursement of expenses
Century Publication (Private) Limited
Colgate-Palmolive China
Colgate-Palmolive (Vietnam) Limited
Colgate-Palmolive Company USA
Colgate-Palmolive (Hong Kong) Limited
Colgate-Palmolive (Thailand) Limited
Lakson Business Solution Limited
Princeton Travels (Private) Limited
Pakistan Business Council
34.3
SIZA (Private) Limited
Sybird (Private) Limited
103,030
374,591
16,399
3,287
63,234
97,046
167,593
311
16,506
8,578
1,947
91,291
18,053
1,000
2,433,347
88
303
35
3,111
1,162
56,609
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
3,457,521
2,800,037
15,712
5,400
734
2,296
24,142
15,064
710
2,179
233
18,186
Associate
600,000
200,000
Sale proceeds on redemption of short term investments

Lakson Investments Limited
Associate
350,496
210,219
63
296
78,500
63,999
1,200
1,200
25
25
Rent, allied and other charges

Reliance Chemicals (Private) Limited
Purchase of short term investments
Associate
Associate
Associate
Associate
Subsidiary of CP-USA
Joint venture company
Associate
Associate
Associate
Associate
Common Director
Related party
Associate
Associate
Associate
Associate
Associate
Associate
2012
2011
(Rupees in 000)
Associate
34.3 Related party
Associate
Associate
Associate
Profit on short term investments

Associate
Royalty charges
Sale of property, plant and equipment

Associate
Associate
47

the Company
Contribution to staff retirement benefits

Colgate-Palmolive (Pakistan) Limited Employees
Contributory Provident Fund
Colgate-Palmolive (Pakistan) Limited
Employees Gratuity Fund
Employees fund
18,576
15,834
Employees fund
19,282
37,858
17,362
33,196
Donations
Special Olympics Pakistan
Zulfiqar & Fatima Foundation
Pakistan Business Council
Express Helpline Trust
Related party
Associate
Associate
Common Director
Related party
300
1,750
14,400
525
-
600
1,500
13,200
2,023
16,975
17,323
30,116
3,577
33,693
27,492
3,049
30,541
27.2
27.2
27.2
27.2
27.2
Compensation paid to key management personnel

Short-term employee benefits including
compensated absences
Key management personnel
Post employment benefits
--do-Insurance claims received
Associate
7,424
1,870
Insurance commission income

Associate
9,608
4,662
Purchase of property, plant and equipment

Cyber Internet (Private) Limited
Lakson Business Solution
Associate
Associate
Associate
Associate
Associate
1,070
725
616
2,876
5,287
82
32,287
65
32,434
132,682
163
71,562
18
34,697
124,902
40,863
404,887
111,255
136
60,006
15
29,094
104,732
34,264
339,502
Dividend paid
Premier Fashions (Private) Limited
SIZA (Private) Limited
SIZA Commodities (Private) Limited
48
2012
2011
(Rupees in 000)

Associate
Associate
34.3 Related party
Associate
Associate
Associate
34.2
The related party status of outstanding balances as at June 30, 2012 are included in trade debts (note 10),
loans and advances (note 11), other receivables (note 13) and trade and other payables (note 21).
34.3
Rollins Industries (Private) Limited is a third party whose manufacturing process is dependent on the company.
35.
REMUNERATION OF CHIEF EXECUTIVE, DIRECTOR AND EXECUTIVES
35.1
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:
Chief Executive
2012
2011
Managerial remuneration
Bonus / commission
Provident fund
Housing
Utilities
Motor vehicles
Others
Director
2012
2011
(Rupees in 000)
2012
Executives
2011
5,382
1,614
1,025
1,016
-
5,382
1,614
899
608
-
2,508
402
694
226
1,129
263
260
2,279
367
578
206
1,026
212
237
100,245
21,120
1,950
8,439
44,354
12,096
14,727
85,711
12,238
1,652
6,949
36,592
9,500
11,085
9,037
8,503
5,482
4,905
202,931
163,727
97
77
Number of persons
35.2
Chief executive, a working director and the executives of the company are also provided with company maintained
cars.
36.
FINANCIAL INSTRUMENTS BY CATEGORY

FINANCIAL ASSETS
Loans and receivables at amortised cost
Long term loans
Trade debts
Loans and advances
Trade deposits
Other receivables
FINANCIAL LIABILITIES
Financial liabilities at amortised cost
Long term deposits
Accrued mark-up
2012
2011
(Rupees in 000)
9,452
10,712
492,437
9,258
4,885
6,795
29
255,329
837,882
13,528
9,181
321,073
20,659
5,780
8,430
13
618,843
1,626,779
997,507
14,748
1,548,216
23
13,945
1,508,090
124
1,562,987
1,522,159
37.
FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES
37.1
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 1,626.779 million (2011: Rs 997.507 million), the financial
assets that are subject to credit risk amounted to Rs 1,626.153 million (2011: Rs 997.249 million).
49
The maximum exposure to credit risk as at June 30, 2012, along with comparative is tabulated below:
Financial assets
Long term loans
Trade debts
Loans and advances
Trade deposits
Other receivables
2012
2011
(Rupees in 000)
9,452
10,712
492,437
9,258
4,885
6,795
29
255,329
837,256
1,626,153
13,528
9,181
321,073
20,659
5,780
8,430
13
618,585
997,249
807,949
6,127
465
814,541
551,396
10,324
1,362
1,127
564,209
The bank balances along with credit ratings are tabulated below:
Credit ratings
A-1+
A-1
A2
A3
F1+
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
256,380
216,253
472,633
233,434
117,515
350,949
Out of Rs 472.633 million (2011: 350.949 million), the company has provided Rs 30.943 million (2011: 30.594
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.
50
Financial liabilities in accordance with their contractual maturities are presented below :
Non- interest/mark-up bearing
Maturity within
one year
Maturity after
one year
Total
(Rupees in 000)
June 30, 2012
Financial liabilities
Long term deposits
14,748
1,548,216
1,548,216
23
23
Accrued mark-up
1,548,239

Accrued mark-up
14,748
1,562,987
June 30, 2011
Financial liabilities
Long term deposits
14,748
13,945
13,945
1,508,090
1,508,090
124
124
1,508,214
13,945
1,522,159
37.1.3 Market Risk

Currency Risk
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, 2012, 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 27 million (2011:
approximately Rs 30 million ). This will mainly result due to foreign exchange gains / losses on translation of
USD-denominated 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, 2012 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 effects of changes in fair value of such investments made
by company, on the future profits are not considered to be material.
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, 2012 the net fair value of all financial assets and financial liabilities are estimated to approximate
their carrying values.
51
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, 2012 and 2011, the company had surplus cash reserves to meet its requirements and there was
no net debt position.
38.
ENTITY-WIDE INFORMATION
38.1
The company constitutes of a single reportable segment, the principal classes of products of which are Personal
Care, Home Care and Others.
38.2
Information about products

The company's principal classes of products accounted for the following percentages of sales:
2012
Personal Care
Home Care
Others
38.3
2011
21%
75%
4%
24%
73%
3%
100%
100%
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

The company does not have transactions with any external customer which amount to 10 percent or more of
the entity's revenues.
39.
DEFINED BENEFIT PLAN (Staff Retirement Gratuity)
39.1
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, 2012.
39.2
The actuarial valuation of gratuity plan was carried out as at June 30, 2012. The projected unit credit method
using the following significant assumptions was used for this valuation:
2012
39.3
2011
- Discount rate - per annum compound
13
14
- Expected rate of increase in salaries - per annum
12
13
- Expected rate of return on plan assets - per annum
13
14
Mortality rate
The rates assumed were based on the EFU 61-66 mortality table.
52
Percentage
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
39.5
39.6
112,924
11,059
13,551
3,990
64
(6,544)
135,044
107,068
14,990
(1,136)
19,282
(1,557)
138,647
82,962
9,955
3,269
17,362
64
(6,544)
107,068
39.8
19,282
(19,282)
-
17,362
(17,362)
-
24.1
25
26
11,447
3,834
4,001
19,282
10,366
3,253
3,743
17,362
12,840
18,906
1,837
689
(14,990)
19,282
11,059
13,551
1,836
871
(9,955)
17,362
13,854
13,224
Net unrecognised actuarial

(gains)/losses at July 1, 2011 / 2010
Actuarial loss on obligations
Actuarial loss/(gain) on assets
Subtotal
Actuarial gain/(loss) recognised
22,465
804
1,136
24,405
(689)
22,615
3,990
(3,269)
23,336
(871)
Unrecognised actuarial (gain) / loss as at June 30
23,716
22,465
Charge for the year has been allocated as under:

Cost of sales
39.9
135,044
12,840
18,906
804
(1,557)
166,037
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
135,044
107,068
27,976
(22,465)
(5,511)
-
Movement in fair value of plan assets

Fair value as at July 1, 2011 / 2010
Expected return on plan assets
Actuarial (loss) / gain
Company contributions
Transfer of an employee
Benefits paid
Fair value as at June 30
39.7
166,037
138,647
27,390
(23,716)
(3,674)
-
Movement in defined benefit obligation

Present value of defined benefit
obligation as at July 1, 2011 / 2010
Current service cost
Interest cost
Actuarial losses
Transfer of an employee
Benefits paid
Present value as at June 30
39.6
2012
2011
(Rupees in 000)
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
39.10 Unrecognised actuarial losses
53
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:
2012
2011
2010
2009
2008
(Rupees in 000)
As at June 30
Present value of defined
benefit obligation
Fair value of plan assets
166,037
(138,647)
135,044
(107,068)
112,924
(82,962)
90,954
(57,899)
72,505
(49,149)
27,390
27,976
29,962
33,055
23,356
(0.82)
3.05
3.98
(8.32)
(4.46)
0.48
2.95
2.82
5.83
4.75
Deficit
Experience adjustment:
Gain / (loss) on plan assets
(as percentage of plan assets)
Loss on obligations
(as a percentage of obligation)
39.12 Plan assets comprise of the following:
2012
(Rupees in 000) Percentage
Shares and units of mutual funds

Debt
Cash
2011
(Rupees in 000)
Percentage
40,998
95,210
2,439
29.57
68.67
1.76
11,550
78,679
16,839
10.79
73.49
15.72
138,647
100.00
107,068
100.00
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, 2013 is Rs 20.467 million
(2012: Rs 19.281 million).
40.
PLANT CAPACITY AND ACTUAL PRODUCTION

2012
2011
(Quantities in tons)
Capacity
232,460
208,460
Production
158,164
135,426
The under utilisation of capacity was due to market constraints.

41.
DATE OF AUTHORISATION FOR ISSUE

These financial statements were authorised for issue on July 30, 2012 by the board of directors of the company.

Chief Executive
54

Director
PATTERN OF SHAREHOLDING
Held by the Shareholders as at June 30, 2012
Incorporation Number K-5010 OF 1997-78

CUIN Registration NO.005832
No. of
shareholders
From
334
149
72
90
11
6
1
1
1
1
1
2
1
1
1
1
1
1
1
1
101
501
1,001
5,001
10,001
15,001
30,001
40,001
45,001
95,001
120,001
275,001
1,900,001
2,420,001
4,425,001
6,310,001
9,180,001
10,895,001
676
Total
Shareholdings
100
500
1,000
5,000
10,000
15,000
20,000
35,000
45,000
50,000
100,000
125,000
280,000
1,905,000
2,425,000
4,430,000
6,315,000
9,185,000
10,900,000
To
Total
shares held
Shares
Shares
Shares
Shares
Shares
Shares
Shares
Shares
Shares
Shares
Shares
Shares
Shares
Shares
Shares
Shares
Shares
Shares
Shares
7,073
38,077
48,681
181,289
67,594
77,461
18,517
32,411
41,256
49,657
95,188
247,114
276,878
1,904,612
2,421,220
4,425,227
6,314,104
9,184,294
10,898,839
36,329,492
Categories of shareholders
shares held
Percentage
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
410,594
24,309,4554
48
1.13
66.91
-
27,324
2,125
30,822,464
0.08
0.01
84.84
680,704
10,898,842
1.87
30.00

Chief Executive
Some of the shareholders are reflected in more than one category.
55
DETAILS OF PATTERN OF SHAREHOLDING

AS PER REQUIREMENTS OF CODE OF
CORPORATE GOVERNANCE
i)
ASSOCIATED COMPANIES, UNDERTAKINGS AND RELATED PARTIES

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
ii)
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

Chairman/Director
Director/Chief Executive
Director
Director
Mr. A. Aziz H. Ebrahim
Director
Mr. Jerome Graham Webb
Nominee of Colgate-Palmolive Company, USA
Mr. Mukul Deoras
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
iv)
EXECUTIVES
v)
PUBLIC SECTOR COMPANIES AND CORPORATIONS
vi)
BANKS, DEVELOPMENT FINANCE INSTITUTIONS,

NON-BANKING FINANCE COMPANIES,
INSURANCE COMPANIES, TAKAFUL,
MODARABAS AND PENSION FUNDS AND:
[Other than those reported at i(5)]
4,089
1,186
3,985
1,483
122,270
276,878
235
468
30
NIL
27,772
SHAREHOLDERS HOLDING 5% OR MORE

M/s. Colgate-Palmolive Co., USA
[Other than those reported at i(1), i(2), i(3), i(4) & i(6)]
viii)
2,125
DIRECTORS AND THEIR SPOUSES AND MINOR CHILDREN

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
vii)
6,314,104
9,184,294
2,421,220
4,425,227
13,364
1,904,612
41,256
407
2,183
716
743
374
144
331
480
MUTUAL FUND
CDC - Trustee and Index Tracker Fund
iii)
SHARES HELD
INDIVIDUALS AND OTHER THAN THOSE

MENTIONED ABOVE
10,898,839
680,677
36,329,492
56
OPERATING AND FINANCIAL HIGHLIGHTS

BALANCE SHEET
2011-2012
2010-2011
2009-2010
2008-2009
(Rupees in 000)

Intangible assets
Long term loans and security deposits
2,863,125
6,341
20,164
2,889,630
2,680,784
18,775
22,709
2,722,268
1,873,118
32,155
23,597
1,928,870
Current assets
Current liabilities
5,006,017
1,867,801
3,138,216
6,027,846
3,687,865
1,668,040
2,019,825
4,742,093
363,295
5,187,742
3,189
5,554,226
2007-2008
2006-2007
1,168,256
42,074
24,935
1,235,265
963,240
14,715
21,513
999,468
864,837
17,400
17,706
899,943
2,877,700
1,011,144
1,866,556
3,795,426
2,705,155
1,072,926
1,632,229
2,867,494
2,138,856
834,290
1,304,566
2,304,034
1,750,582
818,450
932,132
1,832,075
315,909
4,057,766
274,704
3,302,442
238,873
2,461,338
4,373,675
3,577,146
2,700,211
191,098
1,950,245
201
2,141,544
152,879
1,553,776
455
1,707,110
473,620
473,620
6,027,846
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
Turnover
23,327,820
18,132,057
14,583,936
13,994,706
8,976,538
7,445,820
Less : Sales tax & sed

: Trade discounts
Net turnover
3,464,671
1,154,438
4,619,109
18,708,711
2,994,755
986,882
3,981,637
14,150,420
2,260,329
794,297
3,054,626
11,529,310
2,148,237
581,792
2,730,029
11,264,677
1,323,402
461,773
1,785,175
7,191,363
1,036,767
424,373
1,461,140
5,984,680
Cost of sales
Gross profit
13,298,699
5,410,012
9,989,856
4,160,564
7,699,401
3,829,909
8,482,756
2,781,921
5,035,128
2,156,235
4,054,746
1,929,934
Administrative,selling and distribution cost

Other operating expenses
Other operating income
(3,007,650 )
(206,472 )
62,192
(3,151,930 )
2,258,082
17,587
2,240,495
620,860
1,619,635
(2,272,942 )
(164,081 )
72,573
(2,364,450 )
1,796,114
11,933
1,784,181
616,801
1,167,380
(1,988,119 )
(156,206 )
89,644
(2,054,681 )
1,775,228
11,036
1,764,192
612,553
1,151,639
(1,527,738 )
(112,508 )
53,297
(1,586,949 )
1,194,972
48,867
1,146,105
396,139
749,966
(1,114,421 )
(119,189 )
118,259
(1,115,351 )
1,040,884
19,875
1,021,009
341,716
679,293
(1,018,144 )
(61,795 )
61,411
(1,018,528 )
911,406
14,801
896,605
291,854
604,751
TOTAL ASSETS EMPLOYED

REPRESENTED BY
Equity
Paid-up capital
Reserves
Surplus on revaluation of investments
Non-Current liabilities
Long term loans, deposits and
deferred taxation
PROFIT AND LOSS ACCOUNT
Profit from operations

Finance costs
Taxation
57
OPERATING AND FINANCIAL

HIGHLIGHTS-CONTINUED
2011-2012
2010-2011
2009-2010
2008-2009
2007-2008
2006-2007
%
%
%
times
40
29
30
128
41
27
27
151
49
32
35
161
42
28
29
24
48
32
33
52
53
35
37
62
%
%
%
%
29
12
12
9
29
13
13
8
33
15
15
10
25
11
10
7
30
14
14
9
32
15
15
10
ratio
ratio
2.7:1
1.1:0
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
ratio
times
0:100
0.42
0:100
0.47
0:100
0.34
0:100
0.46
0:100
0.47
1:99
0.55
days
days
times
times
10
72
2
7
8
67
2
5
10
58
2
6
11
46
3
9
9
65
2
7
9
63
2
7
Rs
Rs
%
%
times
Rs
Rs
Rs
Rs
Rs in Mn
%
%
44.58
14
36
2
21.98
152.88
534.83
979.99
979.99
35,603
140
20
32.13
14
42
2
23.94
120.39
556.01
1,008.18
769.25
27,946
140
15
31.70
13.50
36
3
18.50
98.46
277.26
658.99
586.40
21,304
135
15
20.64
11.50
41
5
13.56
74.32
261.74
689.90
280.00
10,172
115
15
18.70
10.00
35
2
33.41
58.95
430
825
624.79
22,698
100
25
16.65
16.00
47
4
28.23
46.99
325.00
480.00
470.00
17,075
160
25
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
58
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 24th day of September 2012 and at any adjournment thereof.
Signed this
Folio
No.
day of
CDC Participant
ID No.
2012.
CDC Account/
Sub-Account No.
No. of
Shares held
Signature over
Revenue Stamp
Witness 1
Witness 2
Signature
Signature
Name
Name
CNIC No.
CNIC No.
Address
Address
Notes:
1.
The proxy must be a member of the Company.
2.
The signature must tally with the specimen signature/s registered with the Company.
3.
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.
4.
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.
Fold Here
AFFIX
CORRECT
POSTAGE
Fold Here
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

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CONTENTS

Our Equities and Initiatives

Notice of Annual General Meeting

Statement of Value Added

Statement of Compliance with the Code of Corporate Governance

Review Report to the Members on Statement of Compliance with

Auditors Report to the Members

Profit and Loss Account

Statement of Changes in Equity

Cash Flow Statement

Notes to and Forming Part of the Financial Statements

Operating and Financial Highlights

HUMAN RESOURCE &

NOTICE OF ANNUAL GENERAL MEETING

KARACHI: August 13, 2012

7. Form of Proxy is enclosed herewith.

STATEMENT UNDER SECTION 160 OF THE COMPANIES ORDINANCE, 1984

Earnings Per Share

Year ended June 30

Profit After Tax

Profit After Tax (% of Sales)

Earnings per Share

Profit and Appropriations

Profit After Tax

Reserve for proposed issue of bonus shares

Keynote on Business Performance

Following are the statements on Corporate and Financial Reporting Framework:

The Company has maintained proper books of accounts.

There are no doubts on the Company's ability to continue as a going concern.

: Gross aggregate annual sum not exceeding Rs.27 million

Perquisites and allowances

: As may be determined from year to year and

: Company maintained car with driver.

Provident Fund, Medical, Leave

: As per Company's policy, rules and regulations in force from

Mr. Tasleemuddin A. Batlay

Perquisites and allowances

On behalf of Board of Directors

Karachi: July 30, 2012

IQBAL ALI LAKHANI

STATEMENT OF VALUE ADDED

Bought-in-material and services

STATEMENT OF COMPLIANCE WITH THE

M/s. Zulfiqar Ali Lakhani and Tasleemuddin A. Batlay

M/s. Iqbal Ali Lakhani, Amin Mohammed Lakhani,

Karachi: July 30, 2012

Zulfiqar Ali Lakhani

Tasleemuddin Ahmed Batlay

A. F. FERGUSON & CO.

Karachi, July 30, 2012

A.F. FERGUSON & CO.

A. F. FERGUSON & CO.

AUDITORS' REPORT TO THE MEMBERS

Karachi, July 30, 2012

A.F. FERGUSON & CO.

Audit Engagement Partner: Saad Kaliya

Issued, subscribed and paid-up share capital

TOTAL EQUITY AND LIABILITIES

Zulfiqar Ali Lakhani

Tasleemuddin Ahmed Batlay

PROFIT AND LOSS ACCOUNT

Special excise duty

Selling and distribution costs

Other operating expenses