Annual Report July 2008

5
11
Over Two Decades of Excellence
13
15
17
19
21
23
NOTICE OF MEETING
NOTICE IS HEREBY GIVEN that the 30th Annual General Meeting of COLGATE-PALMOLIVE (PAKISTAN) LIMITED will be held on Thursday September 18, 2008 at 11:00 a.m. at Avari Towers Hotel, Fatima Jinnah Road, Karachi to transact the following business: ORDINARY BUSINESS 1. 2. To receive, consider and adopt the audited financial statements for the year ended June 30, 2008 together with the Directors and Auditors Reports thereon. To declare final dividend in cash @ 100% i.e. Rs.10/- per share of Rs.10/- each and by way of issue of fully paid bonus shares @ 25% i.e. in the proportion of one share for every four shares held by the members as recommended by the Board of Directors. To appoint auditors and fix their remuneration. STATEMENT UNDER SECTION 160 OF THE COMPANIES ORDINANCE, 1984 Pertaining to item No. 4 The Board of Directors has recommended to the members of the Company to declare final dividend in cash @ 100% and by way of issue of fully paid bonus shares @ 25% for the year ended June 30, 2008. Subject to approval of the Board of Directors recommendation as above, the resolution as under will be considered to be passed by the members as an ordinary resolution: RESOLVED THAT: i) a sum of Rs.47,774,460 out of the profit for the year ended June 30, 2008 be capitalized and applied in making payment in full of 4,777,446 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 18, 2008 @ 25% i.e. in the proportion of 1 share for every 4 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, 2008; ii) in the event of any member holding less than 4 shares or a number of shares which is not an exact multiple of 4, 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 with in regard to the distribution of the said new shares as they think fit. Pertaining to item No. 5 At present the authorized share capital of the Company is Rs. 200,000,000 and the paid-up capital is Rs.191,097,860. The Board of Directors recommends to increase the authorized share capital to Rs. 400,000,000 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 an ordinary resolution: RESOLVED THAT the authorized share capital of the Company be and is hereby increased to Rs. 400,000,000 divided into 40,000,000 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. The Directors are interested in the business to the extent of their entitlement of bonus shares as ordinary shareholders.
3.
SPECIAL BUSINESS 4. 5. To consider, subject to declaration of the final dividend as above, to capitalize a sum of Rs.47,774,460 by way of issue of 4,777,446 fully paid bonus shares of Rs.10/- each and if thought fit to pass an ordinary resolution in the matter. To consider increase in authorized share capital of the Company from Rs.200,000,000 to Rs.400,000,000 divided into 40,000,000 ordinary shares of Rs.10/- each and if thought fit to pass an ordinary resolution in the matter.
A statement under section 160 of the Companies Ordinance, 1984 in the above matters togetherwith draft of the ordinary resolutions to be passed pertaining to item Nos. 4 & 5 is annexed. By Order of the Board MANSOOR AHMED KARACHI: August 19, 2008 Company Secretary NOTES: 1. The share transfer books of the Company will remain closed from September 12, 2008 to September 18, 2008, both days inclusive. Transfers received in order by the Shares Registrar of the Company M/s. FAMCO Associates (Private) Limited, State Life Building No.2-A, 4th Floor, I.I.Chundrigar Road, Karachi upto September 11, 2008 will be considered in time for entitlement of the bonus shares and dividend. A member who has deposited his/her shares into Central Depository Company of Pakistan Limited, must bring his/her participants ID number and account/sub-account number alongwith original Computerized National Identity Card (CNIC) or original Passport at the time of attending the meeting. 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. Forms of proxy to be valid must be properly filled-in/executed and received at the Companys Registered Office not later than 48 hours before the time of the meeting. Members are requested to notify the Shares Registrar of the Company promptly of any change in their addresses. 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. Form of Proxy is enclosed herewith.
2.
3. 4. 5. 6. 7.
25
FINANCIAL SUMMARY
Year Ended June 30, 2008
Gross sales Rs in million

9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 2006 2007 6,286 7,446
8,977
Shareholders' equity Rs in million 2,500 2,142 2,000 1,707 1,299 40.00 35.00 30.00
Earnings Per Share Rupees 35.55 31.65 26.10
1,500
25.00 20.00
1,000
15.00 10.00 5.00
500
2008
2006
2007
2008
2006 2007 2008
Year ended June 30 Rupees in million except EPS Gross Sales Operating Income Net Profit After Tax Earnings per share (Rs.) Shareholders' Equity 2006 6,286 783 499 26.10 1,299 2007 7,446 911 605 31.65 1,707 % Change 18.5% 16.3% 21.2% 21.3% 31.4% 2008 8,977 1,041 679 35.55 2,142 % Change 20.6% 14.3% 12.2% 12.3% 25.5%
STATEMENT OF V ALUE ADDED

Year ended June 30 2008 2007 (Rs in million) 8,529 5,740 2,789 Wealth Distributed T Employees o Salaries, benefits and other costs T Government o Income tax, sales tax T Providers of Capital o Dividend to shareholders Mark up/interest expenses on borrowed funds Retained for Reinvestment and Growth Depreciation and Retained Profits 7,032 4,722 2,310
Wealth Generated Total revenue net of discount and allowances Bought-in-material and services
319 1,665 239 20 546 2,789
275 1,329 283 15 408 2,310
60% %
60.0% 50.0% 40.0% 19% 30.0% 20.0% 10.0% 0.0% To Government Depreciation & Retained Profit To Employees To Shareholders To Lenders 11% 9% 1%
BALANCE SHEET
as at June 30, 2008
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, short term prepayments and 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 20,000,000 ordinary shares of Rs 10 each Issued, subscribed and paid-up share capital Reserves Surplus on revaluation of investments LIABILITIES NON-CURRENT LIABILITIES Long term loan Deferred taxation Long term deposits CURRENT LIABILITIES Trade and other payables Accrued mark-up Current maturity of long term loan Short term borrowings TOTAL LIABILITIES CONTINGENCIES AND COMMITMENTS TOTAL EQUITY AND LIABILITIES The annexed notes 1 to 42 form an integral part of these financial statements. 19 20 21 22 23 19 24 25 17 18 15 200,000 191,098 1,950,245 201 2,141,544 200,000 152,879 1,553,776 455 1,707,110 5 6 7 8 9 10 11 12 13 14 15 16 2008 (Rupees in '000) 2007
966,355 11,600 18,551 2,962 999,468 14,085 1,006,364 177,983 95,412 57,741 2,291 11,842 180,201 592,937 2,138,856 3,138,324
864,837 17,400 14,185 3,521 899,943 16,742 777,851 144,263 37,763 30,670 119 27,023 295,455 420,696 1,750,582 2,650,525
3,125 154,900 4,465 162,490 786,145 700 2,500 44,945 834,290 996,780 3,138,324
5,625 115,242 4,098 124,965 623,463 3,506 2,500 188,981 818,450 943,415 2,650,525
ZULFIQAR ALI LAKHANI

Chief Executive
TASLEEMUDDIN A. BATLAY
Director
35
PROFIT AND LOSS ACCOUNT

for the year ended June 30, 2008
Note 2008 (Rupees in '000) 2007
STATEMENT OF CHANGES IN EQUITY

Issued, subscribed and paid-up share capital Capital reserve share premium Revenue reserves General reserve Unappropriated profit Surplus on revaluation of investments Total
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 costs Profit before taxation Taxation Profit after taxation Earnings per share (Rupees) - restated 26
8,976,538 (1,249,907) (73,495) (521,208) 7,131,928 (5,035,128) 2,096,800 (981,933) (73,053) (74,839) 73,909 1,040,884 (19,875) 1,021,009 (341,716) 679,293 35.55
7,445,820 (1,036,767) (474,629) 5,934,424 (4,054,746) 1,879,678 (907,481) (60,407) (61,795) 61,411 911,406 (14,801) 896,605 (291,854) 604,751 31.65
(Rupees in '000) Balance as at July 1, 2006 Profit for the year ended June 30, 2007 Final dividend for the year ended June 30, 2006 (Rs 16 per share) Bonus shares issued at the rate of one share for every four shares held Transfer to general reserve Gain realised during the year ended June 30, 2007 on disposal of investments Balance as at June 30, 2007 Balance as at July 1, 2007 Profit for the year ended June 30, 2008 Final dividend for the year ended June 30, 2007 (Rs 16 per share) Bonus shares issued at the rate of one share for every four shares held Transfer to general reserve Gain realised during the year ended June 30, 2008 on disposal of investments Balance as at June 30, 2008 122,303 30,576 152,879 152,879 38,219 191,098 13,456 13,456 13,456 13,456 660,000 270,000 930,000 930,000 320,000 1,250,000 501,830 604,751 (195,685) (30,576) (270,000) 610,320 610,320 679,293 (244,605) (38,219) (320,000) 686,789 1,367 (912) 455 455 (254) 201 1,298,956 604,751 (195,685) (912) 1,707,110 1,707,110 679,293 (244,605) (254) 2,141,544
27 28 29 30
31
32
33
The appropriations from profits are set out in the statement of changes in equity. The annexed notes 1 to 42 form an integral part of these financial statements.
The annexed notes 1 to 42 form an integral part of these financial statements.

Chief Executive
Director

Chief Executive
Director
37
CASH FLOW STATEMENT

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 Sale proceeds on disposal of property, plant and equipment Profit on savings accounts Profit on a term deposit account Profit on short term investments received Sale proceeds on disposal of short term investments Purchase of short term investments Net cash outflow due to investing activities CASH FLOWS FROM FINANCING ACTIVITIES Long term loan Liabilities against assets subject to finance leases Repayments of short term borrowings Short term borrowings Dividend paid Net cash outflow due to financing activities Net increase in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year The annexed notes 1 to 42 form an integral part of these financial statements. 16 (2,500) (188,981) 44,945 (244,239) (390,775) 172,241 420,696 592,937 (54,064) (1,658) 188,981 (195,377) (62,118) 30,058 390,638 420,696 (251,449) 44,233 29,295 85 465,654 (330,000) (42,182) (213,993) 2,092 31,377 2,557 243,819 (370,027) (304,175) 34 919,796 (22,681) (286,877) (5,966) 559 367 605,198 847,583 (11,571) (431,496) (6,880) (1,538) 253 396,351 2008 (Rupees in '000) 2007
NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

1. 1.1 STATUS AND NATURE OF BUSINESS AND A SIGNIFICANT EVENT DURING THE YEAR Status and nature of business 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. 1.2 Significant event during the year On December 28, 2007, the stock godown at the factory of the company situated in Kotri was torched as a result of riots which led to destruction of certain raw and packing materials and finished goods. Further, the packing department of the factory situated over the stock godown was also affected by heat generated by the fire in the stock godown which damaged the electronic circuitry, central processing units and other electronic components of the machinery used in packing of detergents. The company had lodged insurance claims in respect of loss of stock in trade, damage to property, plant and equipment and consequential loss of profit. The claims in respect of stock in trade and consequential loss of profit have been settled during the year. Further, the claim against damage to property, plant and equipment has been acknowledged by the insurance company in July 2008 and a part payment has been received against the claim before June 30, 2008. 2. BASIS OF PREPARATION AND STATEMENT OF COMPLIANCE These financial statements have been prepared in accordance with the requirements of approved accounting standards as applicable in Pakistan, the Companies Ordinance, 1984 (the Ordinance) and the directives issued by the Securities and Exchange Commission of Pakistan (SECP). Approved accounting standards comprise of such International Financial Reporting Standards (IFRSs) as notified under the provisions of the Ordinance. However, the requirements of the Ordinance or directives issued by the SECP have been followed in case where their requirements are not consistent with the requirements of the approved accounting standards. Standards, interpretations and amendments to published approved accounting standards that are not yet effective: The following standards, amendments and International Financial Reporting Interpretations Committee (IFRIC) interpretations to existing standards have been published and are mandatory for accounting periods beginning on or after January 1, 2008: IFRS 7, 'Financial instruments: Disclosures' (effective from July 1, 2008) introduces new disclosures relating to financial instruments and does not have any impact on the classification and valuation of the financial instruments. IAS 23 (Amendment) 'Borrowing costs' (effective from January 1, 2009). It requires an entity to capitalise borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset (one that takes substantial period of time to get ready for use or sale) as part of the cost of that asset. On adoption of the above amendment, the option of immediately expensing those borrowing costs will be withdrawn. IFRIC Interpretation 14, 'IAS 19 - The limit on a defined benefit asset, minimum funding requirements and their interaction' (effective from January 1, 2008). IFRIC 14 provides guidance on assessing the limit in IAS 19 on the amount of surplus that can be recognised as an asset. It also explains how the pension asset or liability may be affected by a statutory or contractual minimum funding requirements. The management is in the process of assessing the impact of its adoption on the company's financial statements. Standards, amendments to published standards and new interpretations becoming effective in the year ended June 30, 2008 but not relevant:

Chief Executive
Director
There are certain new standards, amendments and interpretations that were mandatory for accounting period beginning on or after July 1, 2007 but are considered not to be relevant or have any significant effect on the company's operations and are, therefore, not disclosed in these financial statements.
39
3. 3.1
SIGNIFICANT ACCOUNTING POLICIES Accounting Convention These financial statements have been prepared under the historical cost convention except for recognition of certain staff retirement benefit at present value as referred to in note 3.13 and certain financial instruments that have been accounted for on the basis of their fair values as referred to in note 3.17.
3.3
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. 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 as specified in note 6.2 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.
3.2 3.2.1
Property, plant and equipment Owned These 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. Consistent with prior years, 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 reducing balance method and by applying rates (as stated in note 5.1.2) on the opening book value of the assets. 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 5.1.2. 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. The management estimates that the financial impact of changes in the residual values and the useful lives during the year ended June 30, 2008 is immaterial. 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 and assets so replaced, if any, are retired. Profit or loss on disposal of assets is recognised in income currently. 3.6
3.4
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.
3.5
Stores and spares Consistent with prior years, 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. Consistent with prior years, loose tools are charged to income as and when purchased as their inventory is generally not significant. 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 Finished goods Trading goods Basis of valuation - Moving average cost Cost accumulated upto the balance sheet date Cost of direct materials and appropriate portion of production overheads Cost of direct materials and appropriate portion of production overheads First in first out basis
3.2.2
Assets subject to finance leases The company accounts for property, plant and equipment held under finance leases by recording the asset and the related liability. These amounts are determined on the basis of discounted value of minimum lease payments or fair value whichever is lower. Financial charges are allocated to the accounting period in a manner so as to provide a constant periodic rate of charge on the outstanding liability. Depreciation is charged to income applying the reducing balance method at rates stated in note 5.1.2 below. 3.7
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. Trade debts and other receivables Trade debts and other receivables are carried at original invoice amount less an estimate for doubtful debts based on the review of outstanding debts. Accordingly, a provision is made against those debts having no movement during the current financial year and which are also considered as doubtful by the management. Debts, considered irrecoverable, are written off, as and when identified. 3.8 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 or minimum tax at the rate of 0.5 percent of turnover, whichever is higher.
3.2.3
Assets held under operating leases Lease rentals payable on assets held under operating leases are recognised in income currently.
3.2.4
Capital work in progress Consistent with prior years, all expenditures 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.
41
Deferred Consistent with prior years: - Deferred tax is recognised using the balance sheet liability method on all temporary differences between the carrying amounts of the assets and liabilities and their tax bases after adjusting for the impact of the temporary differences arising on account of the tax liability under the Final Tax Regime (FTR). - 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 profits 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. 3.9 Investments The management determines appropriate classification of its investments in accordance with the requirements of IAS 39: 'Financial Instruments: Recognition and Measurement' (IAS 39) at the time of purchase of investment and reevaluates this classification on a regular basis. The existing investment portfolio of the company has been categorised as 'available for sale'. 'Available for sale' financial assets are those financial assets that are not (a) loans and receivables originated by the company, (b) held to maturity investments, or (c) financial assets held for trading. Investments classified as 'available for sale' are initially recognised at cost and are subsequently remeasured to fair value. Surplus / deficit arising due to movement in fair values of 'available for sale' investments is transferred to equity. Investments are derecognised when the rights to receive cash flows from the investments have expired or have been transferred and the company has transferred substantially all risks and rewards of ownership. Impairment of investments is recognised when there is a permanent diminution in the value of the investments. 3.10 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. 3.11 Borrowing costs Consistent with prior years, borrowing costs are recognised as an expense in the period in which these are incurred. 3.12 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.
3.13
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 per cent 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.
3.14
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. Cumulative gain or loss previously recognised in equity on revaluation of fair values of 'available for sale' financial assets are recognised in income at the time of their derecognition. Insurance commission income is recognised as and when received.
3.15
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.
3.16
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.
3.17
Financial instruments All financial assets and liabilities are recognised at the time when the company becomes a party to the contractual provisions of the instruments. All financial assets and liabilities are initially measured at cost, which is the fair value of the consideration given and received respectively. Consistent with prior years, these financial assets and liabilities are subsequently measured at fair value, amortised cost or cost, as the case may be. The particular measurement methods adopted are disclosed in the individual policy statements associated with each item.
43
Consistent with prior years, 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. Financial liabilities are derecognised when they are extinguished i.e. when the obligations are discharged, cancelled or expired. Any gain or loss on the recognition and derecognition of the financial assets and liabilities is included in the income for the year in which it arises. 3.18 Off-setting of financial assets and financial liabilities A financial asset and a financial liability is set off 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. 3.19 Transactions with related parties The company enters into transactions with related parties for sale or purchase of goods and services on an arm's length basis. 3.20 Contingent liabilities Consistent with prior years 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. 4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS The preparation of financial statements in conformity with approved accounting standards requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the company's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are as follows: a) b) c) d) e) f) Assumptions and estimates used in determining the residual values and useful lives of property, plant and equipment (note 5); Assumptions and estimates used in writing down items of stock in trade to their net realisable value (note 10); Assumptions and estimates used in calculating the provision for doubtful debts (note 11); Assumptions and estimates used in the classification of investments (note 15); Assumptions and estimates used in the recognition of deferred taxation (note 20); and Assumptions and estimates used in accounting for defined benefit plan (note 39).
5.1 5.1.1
Operating fixed assets The following is a statement of operating fixed assets:

Factory Plant Leasehold building on and land leasehold machinery land Electric Furniture Tools fittings Gas and and and installation fixtures equipment installation (Rupees in '000) Vehicles Held under Computers Office owned finance and equipment lease accessories
Total
At July 1, 2006 Cost Accumulated depreciation Net book value Year ended June 30, 2007 Opening net book value Additions Transfers from capital work in progress during the year Transfers from finance lease Depreciation on transfers Disposals Cost Depreciation Net book value Write offs Cost Depreciation Net book value Depreciation charge for the year Closing net book value At June 30, 2007 Cost Accumulated depreciation Net book value At July 1, 2007 Cost Accumulated depreciation Net book value Year ended June 30, 2008 Opening net book value Additions Transfers from capital work in progress during the year Disposals Cost Depreciation Net book value Write offs Cost Depreciation Net book value Depreciation charge for the year Closing net book value
10,355 10,355 10,355 10,355 10,355 10,355 10,355 10,355 10,355 10,355 10,355 10,355
149,067 (57,054) 92,013 92,013 3,445 47,713 (518) 326 (192) (11,057) 131,922 199,707 (67,785) 131,922 199,707 (67,785) 131,922 131,922 11,041 12,921 (14,816) 141,068 223,669 (82,601) 141,068
639,383 (231,153) 408,230 408,230 11,014 68,957 (45,264) 442,937 719,354 (276,417) 442,937 719,354 (276,417) 442,937 442,937 113,578 124,172 (36,350) 10,083 (26,267) (7) 2 (5) (52,201) 602,214 920,747 (318,533) 602,214
50,555 (14,720) 35,835 35,835 1,705 6,789 (4,081) 40,248 59,049 (18,801) 40,248 59,049 (18,801) 40,248 40,248 5,517 3,371 (9,516) 2,751 (6,765) (3,846) 38,525 58,421 (19,896) 38,525
225 (124) 101 101 (10) 91 225 (134) 91 225 (134) 91 91 (9) 82 225 (143) 82
15,286 (9,201) 6,085 6,085 1,062 71 (262) 183 (79) (998) 6,141 16,157 (10,016) 6,141 16,157 (10,016) 6,141 6,141 1,119 7 (2,410) 726 (1,684) (15) 9 (6) (835) 4,742 14,858 (10,116) 4,742
50,367 (25,821) 24,546 24,546 5,598 2,306 (4,332) 28,118
87,934 (27,780) 60,154 60,154 22,586 2,571 (1,200) (1,431) 687 (744) (17,179) 66,188
2,571 (1,004) 1,567 1,567 (2,571) 1,200 (196) -
25,875 15,574 1,047,192 (16,921) (10,298) (394,076) 8,954 5,276 653,116 8,954 2,645 (290) 154 (136) (576) 500 (76) (3,172) 8,215 5,276 736 322 (104) 75 (29) (171) 135 (36) (856) 5,413 653,116 48,791 126,158 (1,825) 916 (909) (1,527) 1,144 (383) (87,145) 739,628
58,271 111,660 (30,153) (45,472) 28,118 66,188 58,271 111,660 (30,153) (45,472) 28,118 66,188 28,118 25,493 568 (9,002) 4,348 (4,654) (400) 241 (159) (5,590) 43,776 66,188 58,504 (8,581) 4,413 (4,168) (22,433) 98,091
27,654 16,357 1,218,789 (19,439) (10,944) (479,161) 8,215 5,413 739,628 27,654 16,357 1,218,789 (19,439) (10,944) (479,161) 8,215 5,413 739,628 8,215 11,143 (2,788) 1,892 (896) (1,324) 1,186 (138) (3,958) 14,366 5,413 3,498 469 (972) 546 (426) (395) 298 (97) (978) 7,879 739,628 229,893 141,508 (69,619) 24,759 (44,860) (2,141) 1,736 (405) (104,666) 961,098
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. Note 5. PROPERTY, PLANT AND EQUIPMENT Operating fixed assets Capital work in progress 5.1 5.2 961,098 5,257 966,355 739,628 125,209 864,837 2008 (Rupees in '000) 2007
At June 30, 2008 Cost Accumulated depreciation Net book value
74,930 161,583 (31,154) (63,492) 43,776 98,091
34,685 18,957 1,518,430 (20,319) (11,078) (557,332) 14,366 7,879 961,098
45
5.1.2
Depreciation on operating fixed assets is charged at the following rates: Factory building on leasehold land Plant and machinery Electric fittings and installation Gas installation Furniture and fixtures Tools and equipment Vehicles Computers and accessories Office equipment Annual rate of depreciation (%) 10 10 10 10 15 15 20 & 25 33 15 5.1.7 Depreciation charge for the year has been allocated as follows: Cost of sales Selling and distribution costs Administrative expenses 5.2 Capital work in progress The following is a statement of capital work in progress: Factory building on leasehold land
Note
2008
(Rupees in '000)
2007
26.1 27 28
80,921 20,497 3,248 104,666
69,085 15,560 2,500 87,145
5.1.3
Included in fixed assets are few items having cost of Rs 29.907 million (2007: Rs 30.116 million) held by related parties and of Rs 26.878 million (2007: Rs 13.831 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. 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 2.141 million (2007: Rs 1.527 million) and net book value of Rs 1.737 million (2007: Rs 0.383 million) have been retired from active use and have been written off in these financial statements. No impairment relating to operating fixed assets has been recognised in the current year. Disposals of property, plant and equipment having a net book value exceeding Rs 50,000, either individually or in aggregate, during the year are as follows:
Particulars Mode of disposal Cost Accumulted depreciation Sale Proceeds / Receivable from Insurance Company* (Rupees in '000) 69 300 309 551 1,642 959 3,830 83 70 153 65 39,968 167 470 325 575 1,990 1,140 4,667 86 85 171 15 39,968 Net book value Gain / (loss) Particulars of purchasers
5.1.4
Plant and machinery
Electric fittings and installation (Rupees in '000)
Other assets
Total
5.1.5 5.1.6
Balance as at July 1, 2006 Capital expenditure incurred during the year Transfer to operating fixed assets Balance as at June 30, 2007 Balance as at July 1, 2007 Capital expenditure incurred during the year Transfer to operating fixed assets Balance as at June 30, 2008
37,825 21,888 (47,713) 12,000 12,000 1,995 (12,921) 1,074
43,681 134,256 (68,957) 108,980 108,980 15,371 (124,172) 179
3,970 5,980 (6,789) 3,161 3,161 210 (3,371) -
689 3,078 (2,699) 1,068 1,068 3,980 (1,044) 4,004
86,165 165,202 (126,158) 125,209 125,209 21,556 (141,508) 5,257
Vehicles
Bid Bid Bid Bid Insurance claim Insurance claim
268 774 590 886 2,833 1,250 6,601
199 474 281 335 1,191 291 2,771 13 13 26 160 18,990
98 170 16 24 348 181 837 3 15 18 (50) -
Samiuddin House No. C-14, University Road, Sector 38A, Karachi Muhammad Taimur Dar Banglow No. 282, D'croz Road, Garden East, Karachi. Amjad Suhail House No. 692/17, Ancholi Society, F.B. Area, Karachi. Captain Jameel, House No. 357, Sharfabad, Karachi. Century Insurance Company Limited, Lakson Square, Building No. 3, Sarwar Shaheed Road, Karachi. Century Insurance Company Limited, Lakson Square, Building No. 3, Sarwar Shaheed Road, Karachi. Century Insurance Company Limited, Lakson Square, Building No. 3, Sarwar Shaheed Road, Karachi. Century Insurance Company Limited, Lakson Square, Building No. 3, Sarwar Shaheed Road, Karachi. United Business Systems Private Limited 43-L/4, Block 6, P.E.C.H.S., Karachi. Century Insurance Company Limited, Lakson Square, Building No. 3, Sarwar Shaheed Road, Karachi.
Computers and accessories
Insurance claim Insurance claim
96 83 179
Office equipment Fixed assets destroyed due to fire (note 1.2) Others Items having net book value of less than Rs 50,000 each 2008 2007
Trade-in Insurance claim
225 58,958
Various
3,656 69,619 1,825
2,812 24,759 916
844 44,860 909
4,380 44,233 *4,968 2,092
3,536 4,341 1,183
Various
47
Note 6. INTANGIBLE ASSETS At July 1, 2006 Cost Accumulated amortisation Net book value Year ended June 30, 2007 Opening net book value Additions Disposals Amortisation for the year Closing net book value At June 30, 2007 Cost Accumulated amortisation Net book value At July 1, 2007 Cost Accumulated amortisation Net book value Year ended June 30, 2008 Opening net book value Additions Disposals Amortisation for the year Closing net book value At June 30, 2008 Cost Accumulated amortisation Net book value 6.1 6.2 6.3 These represent amounts paid on acquisition of the brand "Sparkle" from Transpak Corporation Limited. Cosistent with prior years, goodwill is being amortised over the useful life of 10 years. 6.2 & 27 6.2 & 27
Goodwill (Rupees in '000)
Note 7. LONG TERM LOANS Considered good - due from executives - due from other employees Recoverable within one year 7.1, 7.2 & 7.3 7.2 12
2008 (Rupees in '000)
2007
43,500 (20,300) 23,200 23,200 23,200 (5,800) 17,400 43,500 (26,100) 17,400 43,500 (26,100) 17,400 17,400 17,400 (5,800) 11,600 43,500 (31,900) 11,600 7.1
972 25,787 26,759 (8,208) 18,551 1,573 352 (953) 972
1,573 19,220 20,793 (6,608) 14,185 2,636 570 (1,633) 1,573
Reconciliation of carrying amount of loans to executives: Opening balance as at July 1 Disbursements Repayments Closing balance as at June 30
7.2
These loans are interest free and have been given to executives and other employees of the company for purchase of house and vehicles and for personal use in accordance with their terms of employment. These loans are to be repaid over a period of five years in equal monthly installments. Vehicles purchased under this scheme are registered in the name of the company and the title is transferred when the loan is fully repaid. The remaining loans are 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 1.741 million (2007: Rs 2.924 million). Long term loans are being carried at cost because the effect of carrying these balances at amortised cost would not have been material. LONG TERM SECURITY DEPOSITS Long term security deposits 2,962 3,521
7.3 7.4 8.
8.1
This includes Term Deposit Receipt (TDR) amounting to Rs 1.7 million (2007: Rs 1.7 million) issued by a banking company. The TDR has been issued to provide security to a banking company for issue of guarantee against a lien on the TDR. The TDR carries profit at the rate of 5% (2007: 5%) per annum and shall mature on August 30, 2008 at which time the management intends to rollover the TDR. STORES AND SPARES Stores Spares 26.1.3 8,068 6,017 14,085 7,072 9,670 16,742
9.
The intangible assets include a trade mark costing Rs 1.500 million in respect of the brand "Sparkle" purchased on January 4, 2001. The trade mark was fully amortised during the year ended June 30, 2007. However, it is still in active use.
49
Note 10. STOCK IN TRADE Raw materials - in hand - in bonded warehouse - in transit 26.1.1 Packing materials - in hand - in transit - with third parties 26.1.2 Work in process Finished goods - in hand - in transit Trading goods - in hand - in transit 26.1 10.1
2008 (Rupees in '000)
2007 11.3 The movement in the provision for doubtful debts for the year is as follows: Balance at the beginning of the year Provision for the year Bad debt written off Balance at the end of the year 12. LOANS AND ADVANCES Considered good Current portion of long term loans - due from executives - due from other employees
Note
2008 (Rupees in '000) 5,955 1,338 (725) 6,568
2007
414,218 60,558 240,374 715,150 68,674 12,240 1,023 81,937 9,588 135,524 19,357 154,881 44,808 44,808 1,006,364
328,158 40,718 94,571 463,447 38,574 8,950 2,620 50,144 5,756 188,732 22,186 210,918 41,581 6,005 47,586 777,851
29
4,168 2,000 (213) 5,955
7 Advances - to employees - to contractors and suppliers - against letter of credit 12.1 12.2 12.1 12.2
964 7,244 8,208 7,682 40,909 38,613 95,412
1,018 5,590 6,608 7,827 21,730 1,598 37,763
Advances to employees are provided to meet business expenses and are settled as and when the expenses are incurred. Advances include the following amounts due from related parties: Rollins Industries (Private) Limited Colgate-Palmolive (Pakistan) Limited Employees Contributory Provident Fund Trust Century Insurance Company Limited 2,417 861 356 3,634 -
10.1 11.
This includes stocks carried at fair value less cost to sell amounting to Rs 5.605 million (2007: Rs 9.096 million). TRADE DEBTS Considered good - due from related parties - others Considered doubtful - others Less: Provision for doubtful debts 11.3 11.1 & 11.2 5,583 172,400 177,983 6,568 184,551 6,568 177,983 5,697 138,566 144,263 5,955 150,218 5,955 144,263 13.
TRADE DEPOSITS, SHORT TERM PREPAYMENTS AND OTHER RECEIVABLES Trade deposits and short term prepayments Security deposits Prepayments Other receivables Receivable from related parties Custom duty refundable Claims receivable from an insurance company Others 13.1 & 13.2 38,224 245 284 38,753 57,741 8,302 290 13,220 21,812 30,670 4,976 14,012 18,988 2,384 6,474 8,858
11.1
Trade debts include the following amounts due from related parties: Merit Packaging Limited Century Paper and Board Mills Rollins Industries (Private) Limited 11 33 5,539 5,583 1 5,696 5,697
11.2
The maximum aggregate amount of receivable due from related parties at the end of any month during the year was Rs 44.324 million (2007: Rs 11.202 million).
51
Note 13.1 Other receivables include the following amounts due from related parties: Century Insurance Company Limited Clover Pakistan Limited Colgate-Palmolive Philippine Tetley Clover (Private) Limited 13.2 13.3 13.3
2008
(Rupees in '000)
2007
17.
ISSUED, SUBSCRIBED AND PAID-UP SHARE CAPITAL 2008 2007 Number of shares 5,882,353 13,227,433 19,109,786 5,882,353 9,405,476 15,287,829 Ordinary shares of Rs 10 each fully paid in cash Ordinary shares of Rs 10 each issued as fully paid bonus shares 17.1 Note 2008 2007 (Rupees in '000) 58,824 132,274 191,098 58,824 94,055 152,879
34,683 1,090 6 2,445 38,224
6,600 761 6 935 8,302
The maximum aggregate amount receivable from related parties at the end of any month during the year was Rs 161.395 million (2007: Rs 9.315 million). This includes receivable from Century Insurance Company Limited amounting to Rs 4.968 million (2007: nil) which represents balance amount receivable against the insurance claim for fixed assets fully destroyed on December 28, 2007 and Rs 27.867 million (2007: nil) against repairs to fixed assets damaged on that date as fully explained in note 1.2. PROFIT RECEIVABLE FROM BANKS Profit on savings accounts Profit on a term deposit account 1,869 422 2,291 2008 2007 Number of units United Money Market Fund United Growth & Income Fund NAFA Cash Fund MCB Dynamic Cash Fund IGI Income Fund JS Income Fund (formerly UTP Income Fund) Atlas Income Fund KASB Liquid Fund AKD Income Fund BMA Chundrigar Road Savings Fund Surplus on revaluation of investments 7,431,077 141,070 97,466 240,616 38,224 96,974 194,455 927,592 454,240 448,258 7,234,273 338,636 245,990 53,802 27,532 90,432 2008 2007 50,000 50,000 80,000 35,000 25,000 30,000 15,000 10,000 295,000 455 295,455 19. 119 119 17.1 18.
These shares include 3,821,957 bonus shares of Rs 10 each (2007: 3,057,566 bonus shares of Rs 10 each) issued by the company during the year. RESERVES Capital reserve - Share premium reserve Revenue reserve - General reserve - Unappropriated profit LONG TERM LOAN Secured - From ABN Amro Bank N.V Less: Current maturity shown under current liabilities 19.1 13,456 1,250,000 686,789 1,950,245 5,625 2,500 3,125 13,456 930,000 610,320 1,553,776 8,125 2,500 5,625
14.
15.
SHORT TERM INVESTMENTS - available for sale
(Rupees in '000)
80,000 15,000 10,000 25,000 20,000 10,000 10,000 10,000 180,000 201 180,201
19.1
The company has obtained a loan from ABN Amro Bank N.V of Rs 10 million to finance the expansion of existing plant and machinery. This facility is secured against pari passu charge over fixed assets including immovable property of the company. Markup is charged at the rate of three month's KIBOR plus 110 bps per annum. The loan is repayable in sixteen equal quarterly installments of Rs 0.625 million each, which commenced from October 2006. DEFERRED TAXATION Credit / (debit) balances arising in respect of timing differences relating to: Accelerated tax depreciation allowance Provision for compensated absences Provision for doubtful debts
20.
16.
CASH AND BANK BALANCES With banks on: - Current accounts - Savings accounts - Term deposit account Cheques in hand Cash in hand 55,092 359,427 100,000 514,519 77,730 688 592,937 30,558 357,511 388,069 32,059 568 420,696
16.1 16.1
21.
LONG TERM DEPOSITS Security deposits obtained from: - Distributors - Transporters - Others
159,998 (2,799) (2,299) 154,900
119,812 (2,486) (2,084) 115,242
3,960 500 5 4,465
3,593 500 5 4,098
16.1
The rates of profit on these savings and term deposit account range between 0.75% to 13.60% and 14% respectively (2007: 0.75% to 11.80%) per annum.
21.1
These deposits are interest free and are not refundable during the subsistence of relationship with the company.
53
Note 22. 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 22.1 These balances include the following amounts due to related parties: 22.1
2008
(Rupees in '000)
2007 24. 297,260 102,629 99,098 7,105 26,819 21,253 47,737 13,300 1,625 1,281 5,356 623,463 SHORT TERM BORROWINGS Secured - From banks - Running finance facilities - Import credit facilities 24.1
Note
2008
(Rupees in '000)
2007
22.3
22.2
404,324 77,973 117,779 19,174 4,574 51,250 30,316 54,648 17,265 42 1,647 7,153 786,145
24.1 & 24.2 24.1 & 24.3
44,945 44,945
188,981 188,981
The company has arranged short-term borrowing facilities from various banks on mark-up basis to the extent of Rs 837 million (2007: Rs 712 million), which can be interchangeably utilised as running finance facilities or import credit facilities. These facilities had expired during the year and were renewed subsequently. The renewed facilities are available for various periods expiring between July 30, 2008 to March 31, 2009. The arrangements are secured by a joint hypothecation of stocks, stores and spares, trade debts, other current assets and second charge on moveable assets of the company. The mark-up on short-term running finance facilities ranges between 10.92% to 13.81% (2007: 10.03% to 11.63%) per annum. The import credit facility is priced at LIBOR plus 2% per annum (2007: LIBOR plus spread ranging between 0.7% to 1% per annum). The facilities for opening letters of credit and guarantee as at June 30, 2008 aggregate Rs 2,468.700 million and Rs 30 million respectively (2007: Rs 1,672 million and Rs 30 million respectively) of which the amounts remaining unutilised at the year end were Rs 2,092.745 million and Rs 15.400 million (2007: Rs 1,446.811 million and Rs 15.400 million) respectively. CONTINGENCIES AND COMMITMENTS Contingencies
24.2 24.3 24.4
Hasanali Karabhai Foundation Princeton Travels (Private) Limited Merit Packaging Limited Century Insurance Company Limited Rollins Industries (Private) Limited Century Publication (Private) Limited SIZA (Private) Limited Cyber Inernet Services (Private) Limited Century Paper & Board Mills Limited 22.2 These balances include the following amounts due to related parties: Colgate-Palmolive Pakistan Limited Employees Contributory Provident Fund Trust Reliance Chemicals (Private) Limited Colgate-Palmolive Thailand 22.3 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 23. ACCRUED MARK-UP Accrued markup on: - Long term loan - Short term borrowings 29
339 39 1,483 3,357 2,250 18 353 16,318 24,157
257 26 374 16,597 750 354 12,218 30,576
25. 25.1
19 1,029 1,048
533 920 1,453
25.1.1 As a result of recovery suit of Rs 31.455 million 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 favor of Octroi Contractor. KATI has filed an appeal in the High Court of Sindh whereas the Octroi Contractor has also filed an appeal requesting to enhance the amount of decree. Subsequently, the case has been 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 which is still awaited. If the appeal is dismissed 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. 25.1.2 The company has received a notice from the Honourable High Court of Sindh concerning an appeal filed by the Commissioner of Income Tax against a decision made in favour of the company by the Income Tax Appellate Tribunal (ITAT) for the assessment year 1991-92. The case is pending for regular hearing in the Honourable High Court of Sindh and the legal counsel of the company is of the opinion that the company has a good arguable case. 25.1.3 Cases have been filed against the company by some employees claiming approximately Rs 0.629 million (2007: Rs 0.939 million) in aggregate. Provision has not been made in these financial statements for the abovementioned 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 company's favour. 25.1.4 Post dated cheques have been issued to custom authorities as a security in respect of duties and taxes amounting Rs 59.595 million (2007: Rs 6.929 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.
47,737 54,648 102,385 47,737 54,648
41,284 47,737 89,021 41,284 47,737
110 590 700
154 3,352 3,506
25.1.5 Contingent liabilities in respect of indemnities given to the financial institutions for guarantees issued by them in the normal course of business aggregate Rs 14.600 million (2007: Rs 14.600 million).
55
25.2
Commitments 26.1.1 Raw materials consumed Opening stock Purchases Less: Cost of raw materials damaged due to fire Less: Closing stock 2007 433 433 26.1.2 Packing materials consumed Opening stock Purchases Less: Cost of packing materials damaged due to fire Less: Closing stock 26.1 26.1.4 10 258,504 4,118,167 882,330 5,259,001 24,184 199,689 5,035,128 167,209 3,388,991 757,050 4,313,250 258,504 4,054,746 26.1.3 Stores and spares consumed Opening stock Purchases Less: Closing stock
Note
2008
(Rupees in '000)
2007
25.2.1 Commitments in respect of capital expenditure amount to Rs 12.175 million (2007: Rs 13.155 million). 25.2.2 Outstanding letters of credit and acceptances amount to Rs 276.878 million (2007: Rs 129.204 million). 25.2.3 Outstanding duties leviable on clearing of stocks amount to Rs 18.864 million (2007: Rs 1.042 million). 25.2.4 Commitments for rentals under operating lease agreements in respect of vehicles are as under: Note Not later than one year Balance at the end of the year 26. COST OF SALES Opening stock of finished goods (including trading goods and by-products) Cost of goods manufactured Purchases of trading goods Less: Cost of finished goods and work in process damaged due to fire Less: Closing stock of finished goods (including trading good and by-products) 26.1 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 Gratuity Provident fund Power and fuel Repairs and maintenance Rent, rates and taxes Insurance Laboratory expenses Cartage Depreciation Other manufacturing expenses Less: Recovery from related parties Less: Closing stock of work in process 10 26.1.1 & 26.2 26.1.2 & 26.2 26.1.3 & 26.2 39.8 5,756 2,895,709 798,764 19,359 156,045 5,048 3,968 101,777 15,373 1,340 10,010 2,461 10,782 80,921 21,162 4,128,475 720 4,127,755 9,588 4,118,167 3,428 2,362,310 653,961 18,906 132,753 5,115 3,641 89,543 12,282 1,285 8,608 1,849 9,214 69,085 23,127 3,395,107 360 3,394,747 5,756 3,388,991 2008 (Rupees in '000) -
26.1.4 10
463,447 3,153,224 3,616,671 5,812 715,150 2,895,709 50,144 847,939 898,083 17,382 81,937 798,764
378,705 2,447,052 2,825,757 463,447 2,362,310 65,007 639,098 704,105 50,144 653,961
26.1.4 10
16,742 16,702 33,444 14,085 19,359
16,140 19,508 35,648 16,742 18,906
26.1.4 This represents insurance claim received from Century Insurance Company Limited against loss of stock due to fire at factory premises on December 28, 2007 as fully explained in note 1.2. 26.2 Cost of sales includes amounts written off during the year in respect of the following: - Raw materials - Packing materials - Finished goods - Stores and spares 810 2,898 1,752 18 2,290 1,613 381
5.1.7
57
Note 27. SELLING AND DISTRIBUTION COSTS Salaries, wages and other benefits 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 28. ADMINISTRATIVE EXPENSES Salaries, wages and other benefits 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 Others Less: Recovery from related parties 39.8 39.8
2008
(Rupees in '000)
2007 29. 87,071 1,910 2,856 20,907 832 38,343 468,858 22,372 5,001 5,900 1,414 570 206 232,386 1,694 4,650 1,642 15,560 5,800 12 917,984 10,503 907,481 OTHER OPERATING EXPENSES Workers' profits participation fund Workers' welfare fund - current year - prior year Auditors' remuneration Property, plant and equipment written off Donations Advances to employees written off Provision for doubtful debts 29.1 Auditors' remuneration Audit fee Fee for half yearly review and other certifications Out of pocket expenses Donations include the following in which a director is interested: Name of director Mr. Iqbal Ali Lakhani Interest in donee (See note below)
Note
2008
(Rupees in '000)
2007
5.1.7 6
98,399 1,885 3,336 20,577 3,228 46,195 483,611 31,912 6,237 9,889 1,992 342 731 243,709 2,312 6,004 1,779 20,497 5,800 190 988,625 6,692 981,933
22.3
54,648 17,265 41 17,306 721 405 391 30 1,338 74,839 240 295 186 721
47,737 13,300 (2,906) 10,394 731 383 550 2,000 61,795 240 275 216 731
29.1 29.2 11.3
29.2
Name and address of donee Special Olympics Pakistan, 205, Sunset Tower, Sunset Boulevard, DHA, Phase-II, Karachi
240
300
5.1.7
45,609 1,938 1,962 2,125 410 3,209 1,830 4,040 1,749 1,666 2,671 1,421 1,728 63 3,248 126 73,795 742 73,053
37,532 1,964 1,491 1,363 330 2,371 1,717 3,670 1,256 3,284 1,069 1,155 1,426 45 2,500 145 61,318 911 60,407
Note: Spouse of Mr. Iqbal Ali Lakhani is the Program Chief Executive of the donee organisation. 30. OTHER OPERATING INCOME Insurance commission Profit on savings accounts Profit on a term deposit account Profit on short term investments Profit on disposal of short term investments Gain on disposal of property, plant and equipment Sale of scrap Insurance claim against consequential loss of profit Exchange (loss) / gain Sales tax refund Profit on sale of material Others 3,455 31,045 507 20,654 4,341 639 55,737 (44,350) 524 247 1,110 73,909 3,307 22,222 7,063 2,159 8,792 1,183 248 1,107 7,604 7,386 340 61,411
5.1.6
59
2008 31. FINANCE COSTS Markup on: - Long term loan - Liabilities against assets subject to finance leases - Short term borrowings Guarantee commission Bank commission and other charges 32. TAXATION Current - for the year - for prior years Deferred 32.1 Reconciliation between the average effective tax rate and the applicable tax rate. 2008 Applicable tax rate Tax effect of expenses that are not allowable in determining taxable income Effect of income assessed under presumptive tax regime Tax effect of income tax provision relating to prior year Tax impact arising due to origination of temporary differences 33. EARNINGS PER SHARE
(Rupees in '000)
2007 34. 4,455 48 6,302 232 3,764 14,801 CASH GENERATED FROM OPERATIONS Profit before taxation
Note
2008
(Rupees in '000)
2007
1,021,009
896,605
751 14,408 258 4,458 19,875
Adjustment for non-cash charges and other items: Depreciation and amortisation expense Gain on sale of property, plant and equipment Provision for doubtful debts Advances to employees written off Profit on savings accounts Profit on a term deposit account Profit on short term investments Profit on disposal of short term investments Finance costs Exchange loss / (gain) Property, plant and equipment written off Working capital changes 34.1 Working capital changes (Increase) / decrease in current assets: Stores and spares Stock in trade Trade debts Loans and advances Trade deposits, short term prepayments and other receivables Increase in current liabilities: Trade and other payables 35. PROPOSED DIVIDEND The Board of Directors at the meeting held on August 19, 2008 have proposed for the year ended June 30, 2008 cash dividend of Rs 10 per share (2007: Rs 16 per share), amounting to Rs 191.098 million (2007: 244.606 million), bonus issue of 4.777 million shares (2007: 3.822 million shares) at the rate of one share for every four shares held (2007: one share for every four shares held) and transfer to general reserve of Rs 440 million (2007: Rs 320 million) subject to the approval of members at the annual general meeting to be held on September 18, 2008. 117,966 (221,130) 107,556 (116,625) 2,657 (228,513) (35,058) (56,079) (22,103) (339,096) (602) (163,502) (40,481) 211 (19,807) (224,181) 110,466 (4,341) 1,338 30 (31,045) (507) (20,654) 19,875 44,350 405 (221,130) 919,796 92,945 (1,183) 2,000 (22,222) (7,063) (2,159) (8,792) 14,801 (1,107) 383 (116,625) 847,583
300,600 1,458 39,658 341,716
283,000 (6,856) 15,710 291,854
34.1
Percentage
2007 35.00 (0.45) (0.99) (0.77) (0.24) 32.55 2007 604,751
35.00 (0.71) (0.28) 0.14 (0.68) 33.47 2008 (Rupees in '000)
Profit after taxation Weighted average number of ordinary shares outstanding during the year - restated
679,293 (Number of shares) 19,109,786 (Rupees)
19,109,786
Earnings per share - restated 33.1
35.55
31.65
A diluted earnings per share has not been presented as the company does not have any convertible instruments as at June 30, 2007 and 2008 which would have any effect on the earnings per share, if the option to convert is exercised.
61
36. 36.1
RELATED PARTY DISCLOSURES Disclosure of transactions between the company and related parties. The related parties comprise associated companies, staff retirement funds, directors and key management personnel. The company in the normal course of business carries out transactions with various related parties. Significant balances and transactions with related parties are as follows: Nature of transaction Sale of goods, services provided and reimbursement of expenses Century Paper & Boards Mills Limited Clover Pakistan Limited Lakson Tobacco Company Limited Merit Packaging Limited Rollins Industries (Private) Limited Tetley Clover (Private) 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 Colgate-Palmolive Company USA Colgate-Palmolive Hong Kong Colgate-Palmolive Thailand Colgate-Palmolive Turkey Cyber Internet Services (Private) Limited Lakson Tobacco Company Limited Lakson Business Solution (Formerly C.R.I.S.S.) Merit Packaging Limited Accuracy Surgicals (Private) Limited Princeton Travels (Private) Limited Rollins Industries (Private) Limited SIZA (Private) Limited SIZA Foods (Private) Limited Tetley Clover (Private) Limited Rent, allied and other charges Century Paper & Board Mills Limited Hasanali Karabhai Foundation SIZA Services (Private) Limited Reliance Chemicals (Private) Limited Associate Associate Associate Associate Associate Associate Associate Associate Subsidiary of CP-USA Subsidiary of CP-USA Joint venture company Subsidiary of CP-USA Subsidiary of CP-USA Subsidiary of CP-USA Associate Associate Associate Associate Associate Associate Related party Associate Associate Associate Associate Associate Associate Associate Related party Associate 266 10,436 51 294,127 2,048 306,928 115 10,090 1,105 40 254,116 1,657 267,123 Note Relationship with the company 2008 (Rupees in '000) 2007
Nature of transaction Royalty charges Colgate-Palmolive Company USA Sale of property, plant and equipment Clover Pakistan Limited Tetley Clover (Private) Limited Rollins Industries (Private) Limited Contribution to staff retirement benefits Colgate-Palmolive (Pakistan) Limited Employees Contributory Provident Fund Trust Colgate-Palmolive (Pakistan) Limited Employees Gratuity Fund Donations Special Olympics Pakistan Compensation paid to key management personnel 34,270 118,278 8,661 1,532 87,937 10,651 41,936 791 6,886 160 4,792 119 7,752 6,092 1,054,975 19 100 1,384,951 181 8,219 402 1,723 10,525 26,668 89,132 11,069 993 68,122 11,524 24,330 125 8,574 5,254 124 404 45 6,312 930,816 9 100 6 1,183,607 294 6,960 344 1,875 9,473 Short-term employee benefits including compensated absences Post employment benefits Insurance claims received Century Insurance Company Limited Insurance commission income Century Insurance Company Limited Purchase of property, plant and equipment Cyber Internet Services (Private) Limited Lakson Business Solutions Limited Clover Pakistan Limited SIZA (Private) Limited SIZA Foods (Private) Limited Dividend paid Colgate-Palmolive Company USA Century Insurance Company Limited Premier Fashions (Private) Limited SIZA (Private) Limited SIZA Services (Private) Limited SIZA Commodities (Private) Limited
Note
Relationship with the company
2008
(Rupees in '000)
2007
Joint venture company
31,912
22,372
36.3
Associate Associate Related party
83 35 118
498 30 528
Employees fund Employees fund
9,271 8,871 18,142 240
5,714 8,989 14,703 300
36.6 36.3
36.4
Key management personnel --do--
26,662 2,946 29,608 146,625
27,961 1,266 29,227 5,599
Associate
Associate
3,455
3,307
36.6
36.5
36.3
Associate Associate Associate Associate Associate
133 1,055 1,080 567 2,835 73,382 90 18,751 19,190 50,839 11,938 174,190
180 453 633 58,705 72 3,268 15,352 12,829 9,551 99,777
Joint venture company Associate Associate Associate Associate Associate
63
36.2 36.3 36.4 36.5 36.6 37. 37.1
The related party status of outstanding balances as at June 30, 2008 are included in trade debts (note 11), other receivables (note 13), and trade and other payables (note 22) respectively. Rollins Industries (Private) Limited is a third party whose manufacturing process is dependent on the company. Spouse of Mr. Iqbal Ali Lakhani is Program Chief Executive of Special Olympics Pakistan. The former name of Lakson Business Solutions Limited was Cyber Rapid Integrated Software Solutions (Private) Limited. Transactions with Lakson Tobacco Company Limited (LTCL) are disclosed for the period from July 1, 2006 to March 8, 2007 as the company ceased to be a related party thereafter due to change in shareholding of LTCL. 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 2008 2007 2008 Director 2007 2008 Executives 2007
38. 38.1
FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES Interest rate risk exposure Interest / mark-up rate risk arises from the possibility that changes in interest / mark-up rates will affect the value of financial instruments. In respect of income earning financial assets and interest / mark-up bearing financial liabilities, the following table provides information about the exposure of the company to interest / mark-up rate risk at the balance sheet date based on contractual re-pricing or maturity dates, whichever is earlier. The information relating to company's exposure to interest rate risk based on maturity dates is as follows:
Interest / mark-up bearing Maturity Maturity Sub-total within one after one year year Non-interest / mark-up bearing Maturity Maturity Sub-total within one after one year year (Rupees in '000) Financial assets Long term loans Long term security deposits Trade debts Trade deposits, short term prepayments and other receivables Profit receivable from banks Short term investments Cash and bank balances 2008 2007 Financial liabilities Long term loan Long term deposits Trade and other payables Accrued mark-up Short term borrowings 2008 2007 459,427 459,427 357,511 2,500 44,945 47,445 191,481 1,700 1,700 1,700 3,125 3,125 5,625 1,700 459,427 461,127 359,211 5,625 44,945 50,570 197,106 8,208 184,551 43,484 2,291 180,201 133,510 552,245 539,781 639,234 700 639,934 532,008 18,551 1,262 19,813 16,006 4,465 4,465 4,098 26,759 1,262 184,551 43,484 2,291 180,201 133,510 572,058 555,787 4,465 639,234 700 644,399 536,106 26,759 2,962 184,551 43,484 2,291 180,201 592,937 1,033,185 914,998 5,625 4,465 639,234 700 44,945 694,969 733,212 20,793 3,521 150,218 24,196 119 295,455 420,696 914,998 Total 2008 Total 2007
(Rupees in '000) Managerial remuneration Bonus / commission Reversal of excess accrual of bonus in previous year Gratuity Provident fund Housing Utilities Motor vehicles Others 5,382 1,827 1,614 355 533 9,711 1 5,382 5,591 (1,212) 1,614 359 503 12,237 1 1,708 287 414 154 768 179 231 3,741 1 1,557 261 310 141 676 12 164 222 3,343 1 33,526 6,063 1,868 2,686 15,114 3,380 5,405 68,042 36 25,537 4,628 498 2,054 10,058 981 2,489 3,745 49,990 28
Number of persons
37.2
Chief executive, a working director and the executives of the company are also provided with company maintained cars. Off-balance sheet items Letters of credit
8,125 4,098 528,502 3,506 188,981 733,212
384 14,600 2008
139,006 14,600 2007 5.00
Indemnity bonds and guarantees The effective interest/mark-up rates as at June 30 for financial instruments are as follows:
Percentage 5.00
Long term security deposits Balances with banks in: - savings accounts - term deposit account Long term loan Short term borrowings - running finance facilities - import credit facilities
0.75 to 13.60 14.00 11.36 10.92 to 13.81 4.70
0.75 to 11.80 7.25 to 11.80 10.99 10.03 to 11.63 6.06 to 6.31
65
38.2
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. Out of the total financial assets of Rs 1,033.185 million (2007: Rs 914.998 million), the financial assets that are subject to credit risk amounted to Rs 1,032.497 million (2007: Rs 914.430 million). The company believes that it is not exposed to major concentration of credit risk. To manage exposure to credit risk, the company applies credit limits to its customers.
39. 39.1 39.2
GRATUITY The disclosures made in notes 39.2 to 39.13 are based on the information included in the actuarial valuation report as of June 30, 2008. The actuarial valuation of gratuity plan was carried out as of June 30, 2008. The projected unit credit method, using the following significant financial assumptions, has been used for the actuarial valuation: 2008 2007 Percentage - Discount rate - per annum compound - Expected rate of increase in salaries - per annum - Expected rate of return on plan assets - per annum 12.00 11.00 10.00 10.00 9.00 9.00
38.3
Foreign exchange risk management Foreign currency risk arises mainly where receivable and payables exist due to transactions entered into foreign currencies. The company is exposed to foreign currency risk on certain transactions with group companies that are entered in a currency other than Pakistan Rupees. The company uses forward foreign exchange contracts to hedge its foreign currency risk, when considered appropriate.
38.4
Liquidity risk management The company applies prudent risk management policies by maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities. Company's treasury aims at maintaining flexibility in funding by keeping committed credit lines available.
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 39.5 39.6
2008
38.5
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, 2008 the net fair value of all financial assets and financial liabilities are estimated to approximate their carrying values. Present value of defined benefit obligation Fair value of plan assets Deficit Unrecognised net actuarial gains Unrecognised past service cost Payable to the gratuity fund 39.5 Movement in defined benefit obligation Present value of defined benefit obligation as at July 1, 2007 / 2006 Current service cost Interest cost Actuarial losses Benefits paid Fair value as at June 30 39.6 Movement in fair value of plan assets Fair value as at July 1, 2007 / 2006 Expected return on plan assets Actuarial gains Company contributions Benefits paid Fair value as at June 30
(Rupees in '000)
2007 62,378 (42,781) 19,597 (6,739) (12,858) -
38.6
Capital risk management The company's objectives when managing capital are to safeguard the company's 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 'short term borrowings' as shown in the balance sheet). Total capital comprises shareholders' equity as shown in the balance sheet under 'share capital and reserves'. The salient information relating to capital risk management of the company as of June 30, 2008 and 2007 were as follows: Note Total borrowings Less: Cash and cash equivalents Excess of liquid assets over total borrowings Total equity 19 & 24 16 2008 (Rupees in '000) 2007 197,106 420,696 223,590 1,707,110
72,505 (49,149) 23,356 (12,335) (11,021) -
62,378 5,039 6,238 3,442 (4,592) 72,505
50,312 5,098 4,528 3,704 (1,264) 62,378
50,570 592,937 542,367 2,141,544
42,781 4,278 (2,189) 8,871 (4,592) 49,149
28,910 2,602 3,544 8,989 (1,264) 42,781
As at June 30, 2008 and 2007, the company had an excess of liquid assets over total borrowings, hence, its exposure to capital risk is minimal.
67
Note 39.7 Movement in net liability in the balance sheet is as follows: Opening balance of net liability Charge for the year Contributions made during the year to the fund Closing balance of net liability 39.8 Charge for the year has been allocated as under: Cost of sales Selling and distribution costs Administrative expenses 39.9 26.1 27 28 39.8
2008
(Rupees in '000)
2007
39.11 Plan assets comprise of the following: 2008 (Rupees in '000) Percentage 10 71 15 4 100 (Rupees in '000) 5,430 22,562 11,023 3,766 42,781 2007 Percentage 12 53 26 9 100
8,871 (8,871) -
8,989 (8,989) -
Shares Debt Cash Others
4,937 34,956 7,134 2,122 49,149
5,048 1,885 1,938 8,871
5,115 1,910 1,964 8,989
39.12 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. 39.13 Expected contribution to post employment benefit plan for the year ending June 30, 2009 is Rs 11.159 million. 40. PLANT CAPACITY AND ACTUAL PRODUCTION 2008 2007 (Quantities in tons) 105,500 96,796 105,500 90,656
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 5,039 6,238 1,836 36 (4,278) 8,871 2,089 5,098 4,528 1,836 129 (2,602) 8,989 6,145
Capacity Production The underutilisation of capacity was due to market constraints. 41. 41.1 CORRESPONDING FIGURES Note 31 34 34.1 41.2 Reclassification from component Markup on short term borrowings Profit on bank deposits Trade and other payables Note 31 34 34 Reclassification to component
39.10 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: 2008 2007 2006 (Rupees in '000) As at June 30 Present value of defined benefit obligation Fair value of plan assets Deficit Experience adjustment: (Loss) / gain on plan assets (as percentage of plan assets) Loss / (gain) on obligations (as a percentage of obligation) 2005 2004
(Rupees in '000) 1,046 (22,222) (7,063) (1,107)
Markup on long term loan Profit on savings accounts Profit on a term deposit account Exchange gain
The following reclassifications has been made in the cash flow for better presentation: Reclassification from component Long term loans Long term deposits (net) Reclassification to component Loans and advances Long term security deposits Long term deposits (Rupees in '000) 2,264 (1,538) 253
72,505 (49,149) 23,356
62,378 (42,781) 19,597
50,312 (28,910) 21,402
41,978 (17,685) 24,293
37,210 (16,868) 20,342
42. (4.46) 4.75 8.28 5.94 4.51 1.04 (3.64) 12.26 (4.78) (0.65)
DATE OF AUTHORISATION FOR ISSUE These financial statements were authorised for issue on August 19, 2008 by the Board of Directors of the company.

Chief Executive
Director
69
PATTERN OF HOLDING OF SHARES

Held by the Shareholders as at June 30, 2008
Incorporation Number K-5010 OF 1997-78 CUIN Registration NO.005832 No of shareholders 282 180 60 43 8 1 3 1 1 1 1 1 1 1 1 1 1 587 Categories of shareholders Directors, Chief Executive Officer, and their spouse 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 Share holders holding 10% General Public From 1 101 501 1,001 5,001 10,001 15,001 20,001 60,001 65,001 205,001 940,001 1,495,001 1,765,001 3,090,001 5,395,001 5,730,001 Total shares held 275,776 11,760,715 309 19,015 3,281 14,221,809 1,317,758 Shareholdings To shares Shares Shares Shares Shares Shares Shares Shares Shares Shares Shares Shares Shares Shares Shares Shares shares Total Share held 8,973 46,458 44,535 96,174 57,010 12,280 56,540 23,720 64,316 65,670 205,433 942,061 1,499,193 1,765,614 3,092,072 5,396,805 5,732,932 19,109,786 Percentage 1.44 61.54 0.002 0.10 0.02 74.42 6.90
DETAILS OF PATTERN OF SHAREHOLDING REQUIREMENTS OF CODE OF CORPORATE GOVERNANCE

a) ASSOCIATED COMPANIES 1. 2. 3. 4. 5. b) Siza (Private) Limited Siza Services (Private) Limited Siza Commodities (Private) Limited Premier Fashions (Private) Limited Century Insurance Company Limited SHARES HELD 1,499,193 5,396,805 1,765,614 3,092,072 7,031
100 500 1,000 5,000 10,000 15,000 20,000 25,000 65,000 70,000 210,000 945,000 1,500,000 1,770,000 3,095,000 5,400,000 5,735,000
NIT AND ICP 1. National Bank of Pakistan, Trustee Deptt. 2. Investment Corporation of Pakistan 156 153
c)
DIRECTORS, CEO AND THEIR SPOUSE AND MINOR CHILDREN 1. 2. 3. 4. 5. 6. Mr. Iqbal Ali Lakhani Mr. Zulfiqar Ali Lakhani Mr. Amin Mohammed Lakhani Mr. Tasleemuddin Ahmed Batlay Mr. A. Aziz H. Ebrahim Mr. Peter Justin Skala Director Director/Chief Executive Director Director Director Nominee of Colgate-Palmolive Company, USA Nominee of Colgate-Palmolive Company, USA 2,152 625 2,097 781 64,316 NIL
7. Mr. Peter John Graylin
NIL 205,433 125 247 17,050 NIL
8. Mrs.Ronak Iqbal Lakhani W/o Iqbal Ali Lakhani 9. Mrs. Fatima Lakhani W/o Zulfiqar Ali Lakhani 10. Mrs.Saira Amin Lakhani W/o Amin Mohammed Lakhani d) e) f) EXECUTIVES PUBLIC SECTOR COMPANIES AND CORPORATIONS BANKS, DEVELOPMENT FINANCE INSTITUTIONS, NON-BANKING FINANCE INSTITUTIONS, INSURANCE COMPANIES, MODARABAS AND MUTUAL FUNDS: [Other than those reported at a(5) SHAREHOLDERS HOLDING 10% OR MORE 1. M/s. Colgate-Palmolive Co., USA. [Other than those reported at a(2)& a(4)] h) INDIVIDUALS AND OTHER THAN THOSE MENTIONED ABOVE
22,296
g)
5,732,932
ZULFIQAR ALI LAKHANI Chief Executive Note: Some of the shareholders are reflected in more than one category
1,300,708 19,109,786
71
OPERATING AND FINANCIAL HIGHLIGHTS

BALANCE SHEET 2007-2008 2006-2007 2005-2006 2004-2005 (Rupees in '000) 739,281 23,200 11,534 774,015 1,337,476 699,948 637,528 1,411,543 622,419 29,000 8,324 659,743 877,981 436,201 441,780 1,101,523 2003-2004 2002-2003 Property,plant and equipment Intangible assets Long term loans and security deposits 966,355 11,600 21,513 999,468 2,138,856 834,290 1,304,566 2,304,034 864,837 17,400 17,706 899,943 1,750,582 818,450 932,132 1,832,075 558,156 35,100 6,943 600,199 808,825 463,218 345,607 945,806 336,694 41,770 8,433 386,897 674,985 355,984 319,001 705,898
OPERATING AND FINANCIAL HIGHLIGHTS-CONTINUED

2007-2008 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 Operating profit to sales Pre tax profit to sales Post tax profit to sales LIQUIDITY Current Ratio Quick ratio ratio ratio 2.6:1 1.3:1 2.1:1 1.2:1 1.9:1 1.0:1 2.0:1 0.8:1 1.8:1 0.8:1 1.9:1 1.0:1 % % % % 29 15 14 10 32 15 15 10 32 16 15 10 27 12 12 8 29 13 13 9 28 11 10 6 % % % times 48 32 33 52 53 35 37 62 59 38 40 59 49 32 30 33 57 37 35 32 47 31 27 13 2006-2007 2005-2006 2004-2005 2003-2004 2002-2003
Current assets Current liabilities TOTAL ASSETS EMPLOYED REPRESENTED BY Equity Paid-up capital Reserves Surplus on revaluation of investments
191,098 1,950,245 201 2,141,544
152,879 1,553,776 455 1,707,110
122,303 1,175,286 1,367 1,298,956
122,303 829,310 951,613
122,303 648,639 770,942
122,303 447,334 569,637
Non-Current liabilities Liabilities against assets subject to finance leases Long term loans,deposits and deferred taxation
1,085
1,658
1,078
10,445
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 Dividend - Cash Dividend - Bonus shares * Restated from 2003 to 2007 Rs Rs % % times Rs Rs Rs Rs Rs in mn % % 35.55 10.00 35 2 17.58 112.07 430 825 624.79 11,940 100 25 31.65 16.00 47 4 14.85 89.33 325.00 480.00 470.00 7,185 160 25 26.10 16.00 57 5 13.25 67.97 175.00 371.15 346.00 4,232 160 25 15.85 12.50 63 6 12.25 49.80 155.00 289.00 194.25 2,376 125 15.01 10.00 53 6 11.66 40.34 87.50 203.00 175.00 2,140 100 9.16 7.00 61 8 9.65 29.81 57.25 154.00 88.35 1,081 70 days days times times 9 52 2 7 9 48 2 7 8 45 2 7 8 50 3 6 10 47 2 6 13 45 3 8 ratio times 07:93 0.47 07:93 0.55 08:92 0.63 14:86 0.62 18:82 0.83 19:81 0.86
162,490 162,490 2,304,034
124,965 124,965 1,832,075
111,502 112,587 1,411,543
148,252 149,910 1,101,523
173,786 174,864 945,806
125,816 136,261 705,898
PROFIT AND LOSS ACCOUNT Turnover Less : Sales tax & sed : Trade discounts Net turnover Cost of sales Gross profit Administrative,selling and distribution cost Other operating expenses Other operating income Profit from operations Finance costs Profit before taxation Taxation Profit after taxation 8,976,538 1,323,402 521,208 1,844,610 7,131,928 5,035,128 2,096,800 (1,054,986) (74,839) 73,909 (1,055,916) 1,040,884 19,875 1,021,009 341,716 679,293 7,445,820 1,036,767 474,629 1,511,396 5,934,424 4,054,746 1,879,678 (967,888) (61,795) 61,411 (968,272) 911,406 14,801 896,605 291,854 604,751 6,286,355 878,335 402,325 1,280,660 5,005,695 3,390,485 1,615,210 (807,743) (59,527) 34,702 (832,568) 782,642 13,309 769,333 270,478 498,855 4,883,261 636,929 326,109 963,038 3,920,223 2,861,841 1,058,382 (548,232) (36,718) 8,185 (576,765) 481,617 14,526 467,091 164,117 302,974 4,195,162 576,991 269,856 846,847 3,348,315 2,386,323 961,992 (488,147) (34,163) 10,960 (511,350) 450,642 14,082 436,560 149,643 286,917 3,461,557 476,025 251,047 727,072 2,734,485 1,977,197 757,288 (456,349) (20,641) 11,997 (464,993) 292,295 22,016 270,279 95,257 175,022
73
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 18th day of September 2008 and at any adjournment thereof.
Signed this Folio No.
day of CDC Participant ID No. CDC Account/ Sub-Account No.
2008. No. of shares held Signature over Revenue Stamp
Witness 1 Signature Name CNIC No. Address
Witness 2 Signature Name CNIC No. 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 participant's 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 than 48 hours before the time of the meeting
Fold Here
AFFIX CORRECT POSTAGE
Company Secretary COLGATE-PALMOLIVE (PAKITAN) LIMITED Lakson Square, Building No. 2, Sarwar Shaheed Road, Karachi-74200. Phone: 5698000
Fold Here
Fold Here
Fold Here
Fold Here
Fold Here

Annual Report July 2008

Transféré par

Informations du document

Description originale:

Copyright

Formats disponibles

Partager ce document

Partager ou intégrer le document

Options de partage

Avez-vous trouvé ce document utile ?

Ce contenu est-il inapproprié ?

Droits d'auteur :

Formats disponibles

Annual Report July 2008

Transféré par

Droits d'auteur :

Formats disponibles

5

Over Two Decades of Excellence

Over Two Decades of Excellence

Gross sales Rs in million

Earnings Per Share Rupees 35.55 31.65 26.10

15.00 10.00 5.00

2006 2007 2008

Over Two Decades of Excellence

STATEMENT OF V ALUE ADDED

319 1,665 239 20 546 2,789

275 1,329 283 15 408 2,310

Over Two Decades of Excellence

ZULFIQAR ALI LAKHANI

PROFIT AND LOSS ACCOUNT

STATEMENT OF CHANGES IN EQUITY

The annexed notes 1 to 42 form an integral part of these financial statements.

ZULFIQAR ALI LAKHANI

ZULFIQAR ALI LAKHANI

CASH FLOW STATEMENT

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

ZULFIQAR ALI LAKHANI

Operating fixed assets The following is a statement of operating fixed assets:

50,367 (25,821) 24,546 24,546 5,598 2,306 (4,332) 28,118

2,571 (1,004) 1,567 1,567 (2,571) 1,200 (196) -

At June 30, 2008 Cost Accumulated depreciation Net book value

74,930 161,583 (31,154) (63,492) 43,776 98,091

34,685 18,957 1,518,430 (20,319) (11,078) (557,332) 14,366 7,879 961,098

80,921 20,497 3,248 104,666

69,085 15,560 2,500 87,145

Plant and machinery

Electric fittings and installation (Rupees in '000)

37,825 21,888 (47,713) 12,000 12,000 1,995 (12,921) 1,074

43,681 134,256 (68,957) 108,980 108,980 15,371 (124,172) 179

3,970 5,980 (6,789) 3,161 3,161 210 (3,371) -

689 3,078 (2,699) 1,068 1,068 3,980 (1,044) 4,004

86,165 165,202 (126,158) 125,209 125,209 21,556 (141,508) 5,257

Bid Bid Bid Bid Insurance claim Insurance claim

268 774 590 886 2,833 1,250 6,601

199 474 281 335 1,191 291 2,771 13 13 26 160 18,990

98 170 16 24 348 181 837 3 15 18 (50) -

Computers and accessories

Insurance claim Insurance claim

Trade-in Insurance claim

3,656 69,619 1,825

2,812 24,759 916

844 44,860 909

4,380 44,233 *4,968 2,092

3,536 4,341 1,183

Goodwill (Rupees in '000)

2008 (Rupees in '000)

972 25,787 26,759 (8,208) 18,551 1,573 352 (953) 972

1,573 19,220 20,793 (6,608) 14,185 2,636 570 (1,633) 1,573

2008 (Rupees in '000)

2008 (Rupees in '000) 5,955 1,338 (725) 6,568

4,168 2,000 (213) 5,955

964 7,244 8,208 7,682 40,909 38,613 95,412

1,018 5,590 6,608 7,827 21,730 1,598 37,763

34,683 1,090 6 2,445 38,224

6,600 761 6 935 8,302

SHORT TERM INVESTMENTS - available for sale

159,998 (2,799) (2,299) 154,900

119,812 (2,486) (2,084) 115,242

3,960 500 5 4,465