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COLGATE-PALMOLIVE (PAKISTAN) LIMITED BALANCE SHEET AS AT JUNE 30, 2012 Note ASSETS NON-CURRENT ASSETS Property, plant and

equipment Intangible assets Long term loans Long term security deposits CURRENT ASSETS Stores and spares Stock in trade Trade debts Loans and advances Trade deposits and short term prepayments Other receivables Profit receivable from banks Taxation Short term investments - available for sale Cash and bank balances TOTAL ASSETS EQUITY AND LIABILITIES SHARE CAPITAL AND RESERVES Authorised share capital Issued, subscribed and paid-up share capital Reserves Surplus on revaluation of investments LIABILITIES NON-CURRENT LIABILITIES Deferred taxation Long term deposits CURRENT LIABILITIES Trade and other payables Accrued mark-up TOTAL LIABILITIES CONTINGENCIES AND COMMITMENTS TOTAL EQUITY AND LIABILITIES 19 20 458,872 14,748 473,620 1,867,778 23 1,867,801 2,341,421 7,895,647 354,473 13,945 368,418 1,667,916 124 1,668,040 2,036,458 6,410,133 17 17 18 400,000 363,295 5,187,742 3,189 5,554,226 400,000 315,909 4,057,766 4,373,675 4 5 6 7 2,863,125 6,341 9,452 10,712 2,889,630 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 2,680,784 18,775 13,528 9,181 2,722,268 36,353 2,370,938 321,073 92,674 22,925 50,473 13 174,573 618,843 3,687,865 6,410,133 2012 2011 (Rupees in '000)

8 9 10 11 12 13 14 15 16

21

23

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

Chief financial officer

Chief executive

Chief executive

Director

COLGATE-PALMOLIVE (PAKISTAN) LIMITED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED JUNE 30, 2012

Note

2012 2011 (Rupees in '000) 23,327,820 (3,464,671) (1,154,438) 18,708,711 18,132,057 (2,778,948) (215,807) (986,882) 14,150,420 (9,989,856) 4,160,564 (2,115,193) (157,749) (164,081) 72,573 1,796,114 (11,933) 1,784,181 (616,801) 1,167,380

Turnover Sales tax Special excise duty Trade discounts Net turnover Cost of sales Gross profit Selling and distribution costs Administrative expenses Other operating expenses Other operating income Profit from operations Finance cost Profit before taxation Taxation Profit after taxation Other comprehensive income for the year Surplus on investments categorised as 'available for sale' Deferred Tax 24

(13,298,699) 5,410,012 (2,825,054) (182,596) (206,472) 62,192 2,258,082 (17,587) 2,240,495 (620,860) 1,619,635

25 26 27 28

29

30

3,536 (347) 3,189 1,622,824 31 44.58

1,167,380 32.13

Total comprehensive income for the year Earnings per share (rupees) - restated

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

Chief financial officer

Chief executive

Chief executive

Director

COLGATE-PALMOLIVE (PAKISTAN) LIMITED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED JUNE 30, 2012

Issued, Capital Revenue reserves Surplus on Total subscribed reserve revaluation of and paid-up share General Unappropriated investments share capital premium reserve profit --------------------------------------------------(Rupees in '000)------------------------------------------------------Balance as at July 1, 2010 Comprehensive income for the year Net profit for the year ended June 30, 2011 Other comprehensive income Transfer to general reserve Total other comprehensive income Total comprehensive income for the year ended June 30, 2011 Transactions with owners Final dividend for the year ended June 30, 2010 (Rs 13.50 per share) Bonus shares issued at the rate of three shares for every twenty shares held Total transactions with owners Balance as at June 30, 2011 Comprehensive income for the year Net profit for the year ended June 30, 2012 Other comprehensive income Transfer to general reserve Total other comprehensive income Total comprehensive income for the year ended June 30, 2012 Transactions with owners Final dividend for the year ended June 30, 2011 (Rs 14 per share) Bonus shares issued at the rate of three shares for every twenty shares held Total transactions with owners Balance as at June 30, 2012 680,000 680,000 1,619,635 (680,000) (680,000) 3,189 1,619,635 3,189 740,000 740,000 (740,000) (740,000) 1,167,380 1,167,380 274,704 13,456 2,130,000 1,158,986 3,577,146

740,000

427,380

1,167,380

(370,851)

(370,851)

41,205 41,205 315,909

13,456

2,870,000

(41,205) (412,056) 1,174,310

(370,851) 4,373,675

680,000

939,635

3,189

1,622,824

(442,273)

(442,273)

47,386 47,386 363,295

13,456

3,550,000

(47,386) (489,659) 1,624,286

3,189

(442,273) 5,554,226

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

Chief financial officer

Chief executive

Chief executive

Director

COLGATE-PALMOLIVE (PAKISTAN) LIMITED CASH FLOW STATEMENT FOR THE YEAR ENDED JUNE 30, 2012

Note CASH FLOWS FROM OPERATING ACTIVITIES Cash generated from operations Finance costs paid Taxes paid Long term loans Long term security deposits Long term deposits Net cash inflow from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Fixed capital expenditure Purchase of intangible assets Purchase of short term investment Sale proceeds on disposal of property, plant and equipment Profit received on savings and term deposit accounts Profit received on a term deposit receipt Sale proceeds on disposal of short term investment Net cash outflow from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Long term loan Dividend paid Net cash outflow from financing activities Net increase / (decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year 32

2012 2011 (Rupees in '000)

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

(516,482) (2,955) (600,000) 14,709 31,934 325 350,496 (721,973)

(994,061) (5,795) (200,000) 9,415 48,267 3,087 210,220 (928,867)

(442,180) (442,180) 219,039 618,843 837,882

(625) (370,420) (371,045) (469,178) 1,088,021 618,843

16

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

Chief financial officer

Chief executive

Chief executive

Director

COLGATE-PALMOLIVE (PAKISTAN) LIMITED NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2012

1.

THE COMPANY AND ITS OPERATIONS Colgate-Palmolive (Pakistan) Limited (the Company) was initially incorporated in Pakistan on December 5, 1977 as a public limited company with the name of National Detergents Limited. The name of the Company was changed to Colgate-Palmolive (Pakistan) Limited on March 28, 1990 when the Company entered into a Participation Agreement with Colgate-Palmolive Company, USA. The Company is listed on the Karachi and Lahore Stock Exchanges. The registered office of the Company is situated at Lakson Square, Building No. 2, Sarwar Shaheed Road, Karachi, Pakistan. The Company is mainly engaged in the manufacture and sale of detergents, personal care and other related products.

2. 2.1

SIGNIFICANT ACCOUNTING INFORMATION AND POLICIES Accounting convention These financial statements have been prepared under the historical cost convention except for the recognition of certain employee retirement benefits at present value in accordance with the actuarial recommendations as referred to in note 2.13.

2.2

Statement of compliance These financial statements have been prepared in accordance with the requirements of the Companies Ordinance, 1984 (the Ordinance) and the approved accounting standards as applicable in Pakistan. Approved accounting standards comprise of such International Financial Reporting Standards (IFRSs) issued by the International Accounting Standards Board as are notified under the Ordinance and the requirements of and directives issued under that Ordinance. However, the requirements of and the directives issued under that Ordinance have been followed where those requirements are not consistent with the requirements of the IFRSs, as notified under the Ordinance. Standards, amendments to approved accounting standards and new interpretations becoming effective during the year ended June 30, 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.

2 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 Property, plant and equipment These assets are stated at cost less accumulated depreciation and accumulated impairment losses, if any, except for leasehold land and capital work in progress which are stated at cost. 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.

3 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. 2.7 Stock in trade Stock in trade is valued at the lower of cost and estimated net realisable value. Cost is determined as follows: Stages of stock in trade Raw and packing material Raw and packing material in bonded warehouse and in transit Work in process and finished goods Trading goods Basis of valuation - Moving average cost - Cost accumulated upto the balance sheet date - Cost of direct materials and appropriate portion of production - 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.

4 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 mark-up 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. 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.

5 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.

6 2.17 Financial instruments

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

7 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-forsale' financial assets, the cumulative loss is removed from equity and recognised in the profit and loss account. Impairment losses recognised in the profit and loss account on equity instruments are not reversed through the profit and loss account. 2.17.2 Financial liabilities All financial liabilities are recognised at the time when the Company becomes a party to the contractual provisions of the instrument. Financial liabilities, other than those at fair value through profit or loss, are measured at amortised cost using the effective yield method. A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expired. Where an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange and modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in respective carrying amounts is recognised in the profit and loss account. 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: 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.

8 3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS The preparation of financial statements in conformity with approved accounting standards requires the use of certain critical accounting estimates. It also requires management to exercise its 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); assumptions and estimates used in determining the useful lives and residual values of intangible assets (note 5); assumptions and estimates used in writing down items of stock in trade to their net realisable value (note 9); assumptions and estimates used in calculating the provision for impairment for trade debts (note 10); assumptions and estimates used in the recognition of deferred taxation (note 19); assumptions and estimates used in accounting for defined benefit plan (note 39); and assumptions and estimates used in disclosure and assessment of provision for contingencies (note 23).

b)

c)

d)

e) f) g)

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 2012 2011 (Rupees in '000) 2,711,483 151,642 2,863,125 2,088,144 592,640 2,680,784

Operating fixed assets Capital work in progress

4.1 4.2

9 4.1 Operating fixed assets

4.1.1 The following is a statement of operating fixed assets:


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

---------------------------------------------------------------------------------------------------------------------(Rupees in '000)--------------------------------------------------------------------------------------------At July 1, 2010 Cost Accumulated depreciation Net book value Year ended June 30, 2011 Additions Transfers from capital work in progress during the year (note 4.2.1) Transfers with in fixed assets Cost Depreciation Net book value Disposals (note 4.1.7) Cost Depreciation Net book value Write offs (note 4.1.3) Cost Depreciation Net book value Depreciation charge for the year (note 4.1.8) Net book value as at June 30, 2011 Year ended June 30, 2012 Additions Transfers from capital work in progress during the year (note 4.2.1) Transfers with in fixed assets Cost Depreciation Net book value Disposals (note 4.1.7) Cost Depreciation Net book value Write offs (note 4.1.3) Cost Depreciation Net book value Depreciation charge for the year (note 4.1.8) Net book value as at June 30, 2012 89,850 (49,662) 434,802 (183,098) 1,702,803 (9,283) 84,809 (7) 47 (8,590) 53,257 (24,235) 158,390 (25,022) 136,473 (19,828) 23,249 (5,284) 27,803 (325,009) 2,711,483 (7,986) 6,211 (1,775) (137) 118 (19) (867) 750 (117) (3,068) 2,894 (174) (400) 235 (165) (12,458) 10,208 (2,250) (14,890) 8,234 (6,656) (640) 456 (184) (15,530) 8,690 (6,840) (2,254) 1,525 (729) 2,254 (1,525) 729 15,798 167,521 7,275 6,053 24,613 44,205 18,713 4,093 288,271 71,636 (21,295) 442,720 (98,804) 1,204,278 (5,048) 68,873 (7) 54 (4,579) 46,710 (10,024) 78,045 (21,307) 123,946 (13,382) 24,722 (4,199) 27,160 (178,645) 2,088,144 (518) 409 (109) (1,701) 1,389 (312) (17) 12 (5) (1,048) 933 (115) (2,529) 2,055 (474) (732) 635 (97) (522) 420 (102) (7,067) 5,853 (1,214) (13,218) 6,975 (6,243) (250) 191 (59) (46) 2 (44) (13,514) 7,168 (6,346) 7,502 (4,050) 3,452 (8,235) 4,269 (3,966) 134 (120) 14 (1,386) 338 (1,048) 1,985 (437) 1,548 305,320 412,093 31,278 26,099 26,943 2,298 4,466 3,351 811,848 30,663 587 73,031 1,013 2,308 7,321 19,011 8,312 2,184 144,430 40,973 40,973 264,174 (109,409) 154,765 1,269,279 (447,043) 822,236 66,268 (24,647) 41,621 154 (93) 61 28,030 (5,033) 22,997 99,474 (44,147) 55,327 225,052 (94,865) 130,187 51,158 (25,676) 25,482 36,243 (11,821) 24,422 2,080,805 (762,734) 1,318,071

18,214

25,946

516,606

17,963

9,084

79,355

1,999

669,167

10
Leasehold Factory land building on leasehold land Plant and machinery Electric Gas fittings and installation installation Furniture and fixtures Tools and equipment Vehicles Computers and accessories Office equipment Total

---------------------------------------------------------------------------------------------------------------------(Rupees in '000)---------------------------------------------------------------------------------------------

At June 30, 2011 Cost Accumulated depreciation Net book value 71,636 71,636 577,065 (134,345) 442,720 1,744,467 (540,189) 1,204,278 98,676 (29,803) 68,873 154 (100) 54 55,389 (8,679) 46,710 129,823 (51,778) 78,045 233,143 (109,197) 123,946 62,954 (38,232) 24,722 43,195 (16,035) 27,160 3,016,502 (928,358) 2,088,144

Annual rates of depreciation (%) 2011 At June 30, 2012 Cost Accumulated depreciation Net book value 89,850 89,850

10

10

10

10

15

15

20

33

15

618,809 (184,007) 434,802

2,418,354 (715,551) 1,702,803

123,777 (38,968) 84,809

154 (107) 47

70,526 (17,269) 53,257

235,178 (76,788) 158,390

262,458 (125,985) 136,473

77,959 (54,710) 23,249

48,887 (21,084) 27,803

3,945,952 (1,234,469) 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.

11 4.1.6 No impairment relating to operating fixed assets has been recognised in the current year. 4.1.7 The following operating fixed assets with a net book value exceeding Rs 50,000 were disposed of during the year:
Particulars Mode of disposal Cost Accumulated depreciation Net book Sale proceeds / Gain / value receivable from (loss) insurance company Particulars of purchasers

--------------------------------------------------------(Rupees in '000)-------------------------------------------------------Vehicles Maturity of company's car scheme --do---do---do---do---do---do---do---do-Maturity of company's maintained car scheme --do-846 1,060 490 504 674 320 320 320 1,336 504 649 526 115 401 294 215 215 215 978 303 197 534 375 103 380 105 105 105 358 201 538 863 375 240 451 105 105 105 601 500 341 Mohsin Fatmi, company 329 Adeel Jafri, company Employee of of of of of of the the the the the the

Ex-Employee Employee Employee Employee Employee

Shoukat Fareed, company

137 Hassan Imam, company 71 Zainab Kaleem, company Shoaib Ansari, company

Muhammad Yaseen Khan, Employee of the company Shamshad Ahmed Khan, Employee of the company

243 Ashraf Kapraywala, Ex-Employee of the company 299 Kamran Qamar, Ex-Employee of the company 81 Saad Mehmood Khan, Ex- Employee of the company 17 Mohammad Atif Zain, Employee of the company 344 Monis Siddiqui, company Employee of the

499

170

329

410

--do--

524

21

503

520

--do--

835

628

207

551

--do--

240

150

90

217

127 Shehzad Qamar, Employee company

of the

Bid

1,005

576

429

955

526 Khalid Hussain Wassan, Plot No. 528-A, 9th Street, Phase VII EXT, DHA, Karachi 577 Lakson Investment Limited Lakson Square Builidng No. 2, Sarwar Shaheed Road Karachi 625 Rehman Laskar Khail, Noshera 640 Rehman Laskar Khail, Noshera 299 Ali Diamond Pirani C-21, Noor Apartment,FI-7,Block-E,N.Nazimabad, Karachi 369 Zubair Ahmed House No. 302, Block-8, Azizabad, Karachi 83 Century Insurance Co. Ltd, Lakson Square Building No. 3, Sarwar Shaheed Road Karachi 377 2 9 5,496 --do---do---do--

--do--

793

170

623

1,200

--do---do---do--

239 239 560

164 179 391

75 60 169

700 700 468

--do--

1,437

981

456

825

Insurance claim

399

112

287

370

--do-Computers & Accessories Insurance claim --do--

1,269 85 85 14,583

406 33 14 7,906

863 52 71 6,677

1,240 54 80 12,173

Others Items having net book value of less than Rs 50,000 each Various 947 784 163 2,536 2,373 Various

2012 2011

15,530 13,514

8,690 7,168

6,840 6,346

14,709

7,869 3,069

9,415

12 4.1.8 Depreciation charge for the year has been allocated as follows: Note 2012 2011 (Rupees in '000) 281,172 27,722 16,115 325,009 142,310 22,568 13,767 178,645

Cost of sales Selling and distribution costs Administrative expenses

24.1 25 26

4.2

Capital work in progress

4.2.1 The following is a statement of capital work in progress: Leasehold Factory Plant and Electric Other land building machinery fittings and assets on installation leasehold land Total

-------------------------------------------- (Rupees in '000) -----------------------------------------Balance as at July 1, 2010 Capital expenditure incurred during the year Capital expenditure charged off during the year Transfers Transfers to operating fixed assets (note 4.1.1) Balance as at June 30, 2011 Capital expenditure incurred during the year Capital expenditure charged off during the year Transfers Transfers to operating fixed assets (note 4.1.1) Balance as at June 30, 2012 161,953 362,866 20,779 9,449 555,047

10,000

137,594

604,033

26,459

71,545

849,631

(144) 21,650

(16,688)

(36) -

(10) (4,962)

(190) -

10,000

(305,320) 15,733

(412,093) 538,118

(31,278) 15,924

(63,157) 12,865

(811,848) 592,640

8,214

29,706

165,187

6,006

19,098

228,211

(1,158)

(57,983)

(42) 59,141

(42) -

(18,214) -

(25,946) 18,335

(516,606) 128,716

(17,963) 3,967

(90,438) 624

(669,167) 151,642

13 5. INTANGIBLE ASSETS Note Goodwill Trade mark Computer Total software ----------------- (Rupees in '000) ----------------43,500 (43,500) 52,590 (20,435) 32,155 96,090 (63,935) 32,155

At July 1, 2010 Cost Accumulated amortisation Net book value Year ended June 30, 2011 Additions Amortisation for the year Net book value as at June 30, 2011 Year ended June 30, 2012 Additions Amortisation for the year Net book value as at June 30, 2012 At June 30, 2011 Cost Accumulated amortisation Net book value At June 30, 2012 Cost Accumulated amortisation Net book value 5.1 5.3 5.3

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

43,500 (43,500) -

58,000 (39,225) 18,775

101,500 (82,725) 18,775

43,500 (43,500) -

60,955 (54,614) 6,341

104,455 (98,114) 6,341

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. Computer softwares are being amortised over a useful life of 3 years. Amortisation charge for the year has been allocated as follows: Note 2012 2011 (Rupees in '000) 440 14,949 15,389 5,286 13,889 19,175

5.2 5.3

Selling and distribution costs Administrative expenses

25 26

14 6. LONG TERM LOANS Note Considered good - due from executives - due from other employees Recoverable within one year 2012 2011 (Rupees in '000) 3,600 15,110 18,710 (9,258) 9,452 6,282 18,006 24,288 (10,760) 13,528

6.1, 6.2 & 6.3 6.2 11

6.1

Reconciliation of carrying amount of loans to executives: Opening balance as at July 1, 2011 / 2010 Disbursements Repayments Closing balance as at June 30 6,282 185 (2,867) 3,600 9,206 1,850 (4,774) 6,282

6.2

These loans are interest free and have been given to executives and other employees of the company for purchase of house, vehicles or for personal use in accordance with their terms of employment. These loans are to be repaid over a period of two to five years in equal monthly installments. Any outstanding loan due from an employee at the time of leaving the service of the company is adjustable against final settlement of staff provident fund. The maximum aggregate amount of loans due from executives at the end of any month during the year was Rs 5.946 million (2011: Rs 10.084 million ). Long term loans have been carried at cost as the effect of carrying these balances at amortised cost would not be material. LONG TERM SECURITY DEPOSITS Note 2012 2011 (Rupees in '000) 10,712 9,181

6.3

6.4

7.

Long term security deposits 7.1

7.1 & 7.2

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. 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.

7.2

15 8. STORES AND SPARES Note 2012 2011 (Rupees in '000) 33,905 31,047 64,952 26,819 9,534 36,353

Stores Spares

8.1 24.1.3

8.1 9.

This includes spares in transit amounting to Rs 6.131 million (2011: Rs 0.576 million). STOCK IN TRADE Note Raw materials - in hand - in bonded warehouse - in transit 24.1.1 Packing materials - in hand - in transit - with third parties 24.1.2 Work in process Finished goods - in hand - in transit Trading goods - in hand - in transit 24.1 2012 2011 (Rupees in '000) 1,070,231 83,551 665,041 1,818,823 203,022 1,323 246 204,591 185,395 810,209 358,175 397,096 1,565,480 173,704 18,194 91 191,989 68,132

553,583 11 553,594 82,767 7,501 90,268 2,852,671

412,069 341 412,410 129,664 3,263 132,927 2,370,938

10.

TRADE DEBTS Considered good - due from related parties - others Considered doubtful - others Less: Provision for impairment 10.3 & 10.5 10.1 & 10.2 50,747 441,690 492,437 30,943 523,380 30,943 492,437 718 320,355 321,073 30,594 351,667 30,594 321,073

16 10.1 Trade debts include the following amounts due from related parties: 2012 2011 (Rupees in '000) Merit Packaging Limited Rollins Indutries (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 41 49,288 109 1,124 4 169 1 11 50,747 25 23 555 4 3 99 9 718

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 Note 2012 2011 (Rupees in '000) 30,594 349 30,943 21,628 8,966 30,594

Balance as at July 1, 2011 / 2010 Provision made during the year Balance as at June 30

27

10.4 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: 2012 2011 (Rupees in '000) Upto 1 month 1 to 6 months More than 6 months 25,080 34,161 16,839 76,080 12,789 24,083 43,297 80,169

10.5 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: 2012 2011 (Rupees in '000) One year to five years Five years and over 23,731 7,212 30,943 23,382 7,212 30,594

17 11. LOANS AND ADVANCES Note 2012 2011 (Rupees in '000)

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

2,309 6,949 9,258 9,411 73,675 92,344

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

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 Television Media Network (Private) Limited Century Publication (Private) Limited 917 1,039 1,956 393 611 1,992 2,996 2012 2011 (Rupees in '000)

12.

TRADE DEPOSITS AND SHORT TERM PREPAYMENTS Security deposits Prepayments 4,885 15,313 20,198 5,780 17,145 22,925

13.

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 & 13.2 6,426 5,421 8,720 369 20,936 7,930 500 41,439 604 50,473

18 13.1 Other receivables include the following amounts due from related parties: 2012 2011 (Rupees in '000) Century Insurance Company Limited Clover Pakistan Limited Tetley Clover (Private) Limited Rollins Industries (Private) Limited 639 5,778 9 6,426 134 742 7,054 7,930

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). PROFIT RECEIVABLE FROM BANKS 2012 2011 (Rupees in '000) Profit on savings and term deposit accounts Profit on a term deposit receipt 29 29 3 10 13

14.

15.

SHORT TERM INVESTMENTS - AVAILABLE FOR SALE 2012 2011 No. of units Balance as at July 1, 2011 / 2010 Purchases Bonus Redemption Balance as at June 30, 2012 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 15.1 251,793 255,329 3,536 -

These represent investments made during the year in Lakson Money Market Fund, a related party of the Company. CASH AND BANK BALANCES Note 2012 2011 (Rupees in '000)

16.

With banks on: - Current accounts - Savings accounts Cheques in hand Cash in hand

16.1

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).

19 17. 17.1 SHARE CAPITAL 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

Issued, subscribed and paid-up capital 2012 2011 Number of shares 5,882,353 5,882,353 Ordinary shares of Rs 10 each fully paid in cash 25,708,512 Ordinary shares of Rs 10 each issued as fully paid bonus shares (note 17.3) 31,590,865 2012 2011 (Rupees in '000) 58,824 58,824

30,447,142 36,329,495 17.3

304,471 363,295

257,085 315,909

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. RESERVES 2012 2011 (Rupees in '000) Capital reserve - Share premium reserve Revenue reserve - General reserve - Unappropriated profit 13,456 13,456

18.

3,550,000 1,624,286 5,187,742

2,870,000 1,174,310 4,057,766

19.

DEFERRED TAXATION Credit / (debit) balances arising in respect of timing differences relating to: Accelerated tax depreciation allowance Provision for compensated absences Short term investments - available for sale Provision for impairment of trade debts Other

474,746 (5,789) 347 (10,626) 194 458,872

370,329 (5,148) (10,708) 354,473

20.

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

14,243 500 5 14,748

13,440 500 5 13,945

20.1

These deposits are interest free and are not refundable during the subsistence of relationship with the company.

20 21. TRADE AND OTHER PAYABLES Note 2012 2011 (Rupees in '000) 554,043 342,285 554,124 31,159 85,940 78,500 120,327 82,136 5,447 2,698 11,119 1,867,778 485,428 332,395 596,214 19,801 7,792 63,999 95,821 36,412 9,545 2,605 17,904 1,667,916

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 21.2

21.3

21.4

21.1

These balances include the following amounts due to related parties: Reliance Chemicals (Private) Limited Rollins Industries(Private) Limited Princeton Travels (Private) Limited Merit Packaging Limited Century Paper & Board Mills Limited Television Media Network (Private) Limited Clover Pakistan Limited Tetley Clover (Private) Limited 49 10,524 145 3,880 33,903 8,443 354 1,206 58,504 603 11,460 24,212 84 36,359

21.2

These balances include the following amounts due to related parties: Century Paper & Board Mills Limited Rollins Indutries(Private) Limited Clover Pakistan Limited Merit Packaging Limited 62 1,176 42 1,280 580 995 1,575

21.3

Workers' profits participation fund Balance at the beginning of the year Allocation for the year Less: Payments during the year Balance at the end of the year 95,821 120,327 216,148 95,821 120,327 94,709 95,821 190,530 94,709 95,821

27

21.4

These balances include the following amounts due to related parties: 2012 2011 (Rupees in '000) Colgate-Palmolive Pakistan Limited Employees Contributory Provident Fund Trust Colgate-Palmolive (Hong Kong) Limited 327 327 3,397 299 3,696

21 22. 22.1 SHORT TERM RUNNING FINANCES The company has arranged short-term borrowing facilities from various banks on mark-up basis to the extent of Rs 1,040 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. The mark-up on short-term running finance facilities ranges between 12.67% to 14.04% (2011: 14.27% to 16.00% ) per annum. 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. CONTINGENCIES AND COMMITMENTS Contingencies

22.2 22.3

23. 23.1

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).

22 24. COST OF SALES Note 2012 2011 (Rupees in '000)

Opening stock of finished goods (including trading goods) Cost of goods manufactured Purchases of trading goods

24.1

545,337 11,370,804 2,026,420 13,942,561 643,862 13,298,699

398,517 8,468,757 1,667,919 10,535,193 545,337 9,989,856

Less: Closing stock of finished goods (including trading goods) 24.1 Cost of goods manufactured Opening stock of work in process Raw materials consumed Packing materials consumed Stores and spares consumed Salaries, wages and other benefits Staff retirement gratuity Provident fund Power and fuel Repairs and maintenance Rent, rates and taxes Insurance Laboratory expenses Cartage Depreciation Other manufacturing expenses Less: Closing stock of work in process

68,132 24.1.1 & 24.2 7,964,119 24.1.2 & 24.2 2,208,011 39,869 24.1.3 424,195 11,447 39.8 7,690 278,210 23,656 8,884 24,839 4,753 168,769 281,172 4.1.8 42,453 11,556,199 185,395 9 11,370,804

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

24.1.1 Raw materials consumed Opening stock Purchases Less: Closing stock 9 1,565,480 8,217,462 9,782,942 1,818,823 7,964,119 773,992 6,628,126 7,402,118 1,565,480 5,836,638

24.1.2 Packing materials consumed Opening stock Purchases Less: Closing stock 9 191,989 2,220,613 2,412,602 204,591 2,208,011 109,329 1,867,521 1,976,850 191,989 1,784,861

24.1.3 Stores and spares consumed Opening stock Purchases Less: Closing stock 8 36,352 68,469 104,821 64,952 39,869 18,805 47,437 66,242 36,353 29,889

23 24.2 Cost of sales includes amounts written off during the year in respect of the following: Note - Raw materials - Packing materials - Finished Goods 25. SELLING AND DISTRIBUTION COSTS Salaries, wages and other benefits Staff retirement gratuity Provident fund Travelling and conveyance Repairs and maintenance Vehicle running expenses Advertising and sales promotion Royalty on sale of licensed products Postage, telephone and internet charges Rent, rates and taxes Printing and stationery Subscription and membership Legal and professional Freight Electricity Insurance Security service charges Depreciation Amortisation Other expenses Less: Recovery from related parties 26. ADMINISTRATIVE EXPENSES Salaries, wages and other benefits Staff retirement gratuity Provident fund Travelling and conveyance Repairs and maintenance Vehicle running expenses Postage, telephone and internet charges Rent, rates and taxes Printing and stationery Subscription and membership Legal and professional Electricity Insurance Security service charges Depreciation Amortisation Others Less: Recovery from related parties 39.8 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 39.8 239,091 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 2,825,054 204,768 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 2012 2011 (Rupees in '000) 15,263 1,746 1,190

4.1.8 5.3

4.1.8 5.3

24 27. OTHER OPERATING EXPENSES Note Workers profits participation fund Workers welfare fund Auditors remuneration Property, plant and equipment - written off Donations Provision for impairment - trade debts Net exchange loss Auditors remuneration Audit fee Fee for half yearly review and other certifications Out of pocket expenses 600 650 317 1,567 480 470 107 1,057 2012 2011 (Rupees in '000) 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

21.3 27.1 4.1.1 27.2 10.3

27.1

27.2

Donations include the following in which a director is interested: Name of director Interest in donee Name and address of donee 300 600

Mr. Iqbal Ali Lakhani

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

Note: Spouse of Mr. Iqbal Ali Lakhani is the Program Chief Executive of the donee organisation Mr. Zulfiqar Ali Lakhani (See note below) Zulfiqar & Fatima Foundation, 9 - Khayabane-Ghazi, DHA, Phase-V, Karachi. 14,400 13,200

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 Lakhani, Mr. Amin IDPs through Hasanali Mohammed Lakhani Karabahi Foundation. and Mr. Iqbal Ali Lakhani Note: The above mentioned directors are trustees of the Hasanali Karabahi Foundation. Mr. Iqbal Ali Lakhani (See note below) Pakistan Business Council, M-02, Mezzanine Floor, Beaumont Plaza, 10 Beaumont Road, Karachi.

1,750

1,500

525

Note: Mr. Iqbal Ali Lakhani is a common director.

25 Note Name of director Sultan Ali Lakhani Interest in donee Name and address of donee 2,023 2012 2011 (Rupees in '000)

(See note below) Express Helpline Trust, Plot No. 5, Expressway, Off. Korangi Road, Karachi.

Note: Mr Sultan Ali Lakhani is the trustee of donee organization. 28. OTHER OPERATING INCOME Income from financial assets / liabilities Profit on savings and term deposit accounts Profit on a term deposit receipt Profit on short term investment Gain on disposal of short term investments Liabilities no longer payable written back Income from non-financial assets Insurance commission Gain on disposal of property, plant and equipment Sale of scrap Sales tax refund 29. FINANCE COST Markup on: - Long term loan - Short term borrowings Guarantee commission Bank commission and other charges 30. TAXATION Current - for the year - for prior years' Deferred 30.1 Reconciliation between the average effective tax rate and the applicable tax rate. 2012 2011 Percentage Applicable tax rate Tax effect of income that is not taxable in determining tax liability Tax effect of income assessed under presumptive tax regime Tax effect of income tax provision relating to prior year Tax effect of expenses that are not allowable in determining taxable income Tax effect of surchage Tax credits 35.00 (0.04) (0.91) (2.69) (0.02) (3.63) 27.71 35.00 (0.09) (1.51) 0.08 1.09 34.57 577,052 (60,244) 104,052 620,860 472,892 1,436 142,473 616,801 3,696 309 13,582 17,587 7 622 363 10,941 11,933 31,931 344 63 2,289 16 9,608 7,869 9,787 285 62,192 45,080 3,063 295 10,220 3,069 4,662 3,069 3,115 72,573

4.1.7

26 2012 2011 (Rupees in '000) 31. EARNINGS PER SHARE (Rupees in '000) Profit after taxation 1,619,635 1,167,380

(Number of shares) Weighted average number of ordinary shares outstanding during the year - restated 36,329,495 36,329,495

Earnings per share - restated 31.1 32.

(Rupees) 44.58

32.13

There are no dilutive potential ordinary shares outstanding as at June 30, 2012 and 2011. CASH GENERATED FROM OPERATIONS Note 2012 2011 (Rupees in '000) 2,240,495 1,784,181

Profit before taxation Adjustment for non-cash charges and other items: Depreciation and amortisation expense Gain on sale of property, plant and equipment Provision for impairment - trade debts Profit on savings and term deposit accounts Profit on a term deposit receipt 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

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

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

32.1

Working capital changes (Increase) in current assets: Stores and spares Stock in trade Trade debts Loans and advances Trade deposits and short term prepayments Other receivables Increase in current liabilities: Trade and other payables 180,509 (484,205) 658,889 (463,248) (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)

27 33. PROPOSED DIVIDEND The Board of Directors at their meeting held on _________, 2012 have proposed a cash dividend of Rs _____ per share (2011: Rs 14 per share) for the year ended June 30, 2012, amounting to Rs _____ million (2011: Rs 442.273 million), bonus issue of ______ million shares (2011: 4.739 million shares) at the rate of _____ shares for every ______ shares held (2011: three shares for every twenty shares held) and transfer to general reserve of Rs ____ million (2011: Rs 680 million) subject to the approval of members at the annual general meeting to be held on ____________, 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 Note Relationship with the company 2012 2011 (Rupees in '000)

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

34.3

Associate Associate Associate Related party Associate Associate Associate Associate Associate Associate Associate

307 13,452 40 861,136 25,699 31 20 8 127 29 900,849

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

Associate Associate Associate Associate Subsidiary of CP-USA Subsidiary of CP-USA Joint venture company Subsidiary of CP-USA Subsidiary of CP-USA Associate Associate Associate Associate Common Director 34.3 Related party Associate Associate Associate Associate Associate Associate

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 3,457,521

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

28 Note Rent, allied and other charges Hasanali Karabhai Foundation Rollins Industries (Private) Limited SIZA Services (Private) Limited Reliance Chemicals (Private) Limited Century Paper & Board Mills Limited Relationship with the company 2012 2011 (Rupees in '000) 15,712 5,400 734 2,296 24,142 15,064 710 2,179 233 18,186

Associate 34.3 Related party Associate Associate Associate

Purchase of short term investments Lakson Investments Limited

Associate

600,000

200,000

Sale proceeds on redemtion of short term investments Lakson Investments Limited Associate Profit on short term investments Lakson Investments Limited Royalty charges Colgate-Palmolive Company USA Sale of property, plant and equipment Lakson Investments Limited Century Insurance Company Limited Clover Pakistan Limited Contribution to staff retirement benefits Colgate-Palmolive (Pakistan) Limited Employees Contributory Provident Fund Colgate-Palmolive (Pakistan) Limited Employees Gratuity Fund Donations Special Olympics Pakistan Hasanali Karabhai Foundation Zulfiqar & Fatima Foundation Pakistan Business Council Express Helpline Trust

350,496

210,219

Associate

63

296

Joint venture company

78,500

63,999

Associate Associate Associate

1,200 1,200

25 25

Employees fund Employees fund

18,576 19,282 37,858 300 1,750 14,400 525 16,975

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

27.2 27.2 27.2 27.2 27.2

Related party Associate Associate Common Director Related party

Compensation paid to key management personnel Short-term employee benefits including compensated absences Post employment benefits Insurance claims received Century Insurance Company Limited Insurance commission income Century Insurance Company Limited

Key management personnel --do--

30,116 3,577 33,693 7,424

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

Associate

Associate

9,608

4,662

29 Note Purchase of property, plant and equipment Tetley Clover (Private) Limited Cyber Internet (Private) Limited Lakson Business Solution Clover Pakistan Limited Lakson Investments Limited Relationship with the company Associate Associate Associate Associate Associate 2012 2011 (Rupees in '000) 1,070 725 616 2,876 5,287 82 32,287 65 32,434

Dividend paid Colgate-Palmolive Company USA Century Insurance Company Limited Premier Fashions (Private) Limited Rollins Industries (Private) Limited SIZA (Private) Limited SIZA Services (Private) Limited SIZA Commodities (Private) Limited

Joint venture company Associate Associate 34.3 Related party Associate Associate Associate

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

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.

30 35. 35.1 REMUNERATION OF CHIEF EXECUTIVE, DIRECTOR AND EXECUTIVES The aggregate amount charged in these financial statements for remuneration, including certain benefits to the chief executive, the director and executives of the company, are as follows: Chief Executive Director Executives 2012 2011 2012 2011 2012 2011 -----------------------------(Rupees in '000)---------------------------Managerial remuneration Bonus / commission Staff retirement gratuity Provident fund Housing Utilities Motor vehicles Others 5,382 1,614 1,025 1,016 9,037 1 5,382 1,614 899 608 8,503 1 2,508 402 694 226 1,129 263 260 5,482 1 2,279 367 578 206 1,026 212 237 4,905 1 100,245 21,120 1,950 8,439 44,354 12,096 14,727 202,931 97 85,711 12,238 1,652 6,949 36,592 9,500 11,085 163,727 77

Number of persons 35.2

Chief executive, a working director and the executives of the company are also provided with company maintained cars. FINANCIAL INSTRUMENTS BY CATEGORY 2012 2011 (Rupees in '000) FINANCIAL ASSETS Loans and receivables at amortised cost Long term loans Long term security deposits Trade debts Loans and advances Trade deposits Other receivables Profit receivable from banks Short term investments - available for sale Cash and bank balances

36.

9,452 10,712 492,437 9,258 4,885 6,795 29 255,329 837,882 1,626,779

13,528 9,181 321,073 20,659 5,780 8,430 13 618,843 997,507

FINANCIAL LIABILITIES Financial liabilities at amortised cost Long term deposits Trade and other payables Accrued mark-up

14,748 1,548,216 23 1,562,987

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

31 37. 37.1 FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES The companys activities expose it to certain financial risks. Such financial risks emanate from various factors that include, but not limited to, market risk, credit risk and liquidity risk. The companys overall risk management focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the companys financial performance. Risks measured and managed by the company are explained in notes 37.1.1, 37.1.2 and 37.1.3 below:

37.1.1 Credit risk and concentration of credit risk Credit risk represents the accounting loss that would be recognised at the reporting date if counter parties fail completely to perform as contracted. Credit risk arises from cash and cash equivalents, derivative financial instruments and deposits with banks and financial institutions, as well as credit exposures to customers, including trade receivables and committed transactions. Out of the total financial assets of Rs 1,626.779 million (2011: Rs 997.507 million million), the financial assets that are subject to credit risk amounted to Rs 1,626.153 million (2011: Rs Rs 997.249 million). The maximum exposure to credit risk as at June 30, 2012, along with comparative is tabulated below: Financial assets 2012 2011 (Rupees in '000) Long term loans Long term security deposits Trade debts Loans and advances Trade deposits Other receivables Profit receivable from banks Short term investments - available for sale Cash and bank balances 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

The bank balances along with credit ratings are tabulated below: Credit ratings A-1+ A-1 A2 A3 F1+ 2012 2011 (Rupees in '000) 807,949 6,127 465 814,541 551,396 10,324 1,362 1,127 564,209

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.

32 The breakup of amount due from customers other than related parties as stated in note 10 is presented below: 2012 2011 (Rupees in '000) 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. Financial liabilities in accordance with their contractual maturities are presented below: Non-interest / mark-up bearing Maturity within Maturity after Total one year one year -------------------------(Rupees in '000)------------------------------------------------- June 30, 2012-----------------------Financial liabilities Long term deposits Trade and other payables Accrued mark-up 1,548,216 23 1,548,239 14,748 14,748 14,748 1,548,216 23 1,562,987

------------------------- June 30, 2011-----------------------Financial liabilities Long term deposits Trade and other payables Accrued mark-up 1,508,090 124 1,508,214 13,945 13,945 13,945 1,508,090 124 1,522,159

33 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. 38.1.5 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.

34 38. 38.1 ENTITY-WIDE INFORMATION The company constitutes of a single reportable segment, the principal classes of products of which are Personal Care, Home Care and Others. Information about products The company's principal classes of products accounted for the following percentages of sales: 2012 21% 75% 4% 100% 2011 24% 73% 3% 100%

38.2

Personal Care Home Care Others

38.3

Information about geographical areas The company does not hold non-current assets in any foreign country. Revenues from external customers attributed to foreign countries in aggregate are not material.

38.4

Information about major customers The company does not have transactions with any external customer which amount to 10 percent or more of the entity's revenues.

39. 39.1

DEFINED BENEFIT PLAN (Staff Retirement Gratuity) The disclosures made in notes 39.2 to 39.14 are based on the information included in the actuarial valuation report as of June 30, 2012. 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 2011 Percentage - Discount rate - per annum compound - Expected rate of increase in salaries - per annum - Expected rate of return on plan assets - per annum 13 12 13 14 13 14

39.2

39.3

Mortality rate The rates assumed were based on the EFU 61-66 mortality table.

39.4

The amounts recognised in the balance sheet are as follows: Note 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 39.6 2012 2011 (Rupees in '000) 166,037 138,647 27,390 (23,716) (3,674) 135,044 107,068 27,976 (22,465) (5,511) -

35 39.5 Movement in defined benefit obligation 2012 2011 (Rupees in '000) 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 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 Movement in net liability in the balance sheet is as follows: Charge for the year Contributions made during the year to the fund Closing balance of net liability 39.8 Charge for the year has been allocated as under: Cost of sales Selling and distribution costs Administrative expenses 24.1 25 26 11,447 3,834 4,001 19,282 39.9 The following amounts have been charged to income in respect of the gratuity plan: 2012 2011 (Rupees in '000) 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 Net unrecognised actuarial (gains)/losses at July 1, 2011 / 2010 Actuarial loss on obligations Actuarial loss/(gain) on assets Subtotal Actuarial gain/(loss) recognised Unrecognised actuarial (gain) / loss as at June 30 22,465 804 1,136 24,405 (689) 23,716 22,615 3,990 (3,269) 23,336 (871) 22,465 12,840 18,906 1,837 689 (14,990) 19,282 13,854 11,059 13,551 1,836 871 (9,955) 17,362 13,224 10,366 3,253 3,743 17,362 39.8 19,282 (19,282) 17,362 (17,362) 107,068 14,990 (1,136) 19,282 (1,557) 138,647 82,962 9,955 3,269 17,362 64 (6,544) 107,068 135,044 12,840 18,906 804 (1,557) 166,037 112,924 11,059 13,551 3,990 64 (6,544) 135,044

36 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)----------------------------166,037 (138,647) 27,390 135,044 (107,068) 27,976 112,924 (82,962) 29,962 90,954 (57,899) 33,055 72,505 (49,149) 23,356

As at June 30 Present value of defined benefit obligation Fair value of plan assets Deficit Experience adjustment: Gain / (loss) on plan assets (as percentage of plan assets) Loss on obligations (as a percentage of obligation) 39.12 Plan assets comprise of the following:

(0.82) 0.48

3.05 2.95

3.98 2.82

(8.32) 5.83

(4.46) 4.75

2012 (Rs in '000) Shares and units of mutual funds Debt Cash 40,998 95,210 2,439 138,647 Percentage 29.57 68.67 1.76 100.00

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

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. Expected contribution to post employment benefit plan for the year ending June 30, 2013 is Rs 20.467 million (2012: Rs Rs 19.281 million million). PLANT CAPACITY AND ACTUAL PRODUCTION 2012 2011 (Quantities in tons) Capacity Production The under utilisation of capacity was due to market constraints. 232,460 158,164 208,460 135,426

39.14

40.

37 41. DATE OF AUTHORISATION FOR ISSUE These financial statements were authorised for issue on ______________________ by the board of directors of the company.

Chief financial officer

Chief executive

Chief executive

Director

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