half yearly report -...

JULY - DECEMBER 2017

HALF YEARLY REPORT

Half Yearly Report 2017-18 1

Page

COMPANY INFORMATION 2

DIRECTORS� REVIEW 3-4

DIRECTORS� REVIEW - IN URDU 5-6

AUDITORS' REPORT TO THE MEMBERS ON REVIEW OFINTERIM FINANCIAL INFORMATION 7

CONDENSED INTERIM BALANCE SHEET 8

CONDENSED INTERIM PROFIT AND LOSS ACCOUNT 9

CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY 10

CONDENSED INTERIM CASH FLOW STATEMENT 11

NOTES TO AND FORMING PART OF THE CONDENSED

INTERIM FINANCIAL STATEMENTS 12-22

CONTENTS

Half Yearly Report 2017-182

BOARD OF DIRECTORS

Iqbal Ali Lakhani ChairmanAmin Mohammed LakhaniTasleemuddin Ahmed BatlayAliya Saeeda KhanVinod NambiarPeter John GraylinZulfiqar Ali Lakhani Chief Executive

ADVISOR

Sultan Ali Lakhani

AUDIT COMMITTEE

Aliya Saeeda Khan ChairpersonIqbal Ali LakhaniAmin Mohammed Lakhani

HUMAN RESOURCE &REMUNERATION COMMITTEE

Iqbal Ali Lakhani ChairmanZulfiqar Ali LakhaniAmin Mohammed Lakhani

COMPANY SECRETARY

Mansoor Ahmed

AUDITORS

A. F. Ferguson & Co.Chartered Accountants

INTERNAL AUDITORS

BDO Ebrahim & Co.Chartered Accountants

REGISTERED OFFICE

Lakson Square, Building No. 2,Sarwar Shaheed Road,Karachi-74200Pakistan

SHARES REGISTRAR

FAMCO Associates (Private) Limited8-F, Near to Hotel Faran, Nursery, Block-6,P.E.C.H.S., Shahra-e-Faisal, Karachi.

FACTORIES

G-6, S.I.T.E., KotriDistrict Jamshoro (Sindh)

217, Sundar Industrial Estate,Raiwind Road, Lahore

WEBSITE

www.colgate.com.pk

COMPANY INFORMATION

3

The Company registered a growth of 11.76% in turnover over the corresponding period last year

mainly driven by growth in volume of all categories. Increase in prices of key commodities continued

to put pressure on gross profit margins which witnessed a decline of 158 bps.

The revenue growth was supported by continued investment on media and promotional campaigns

due to which selling and distribution costs increased by 12.72%. Administrative expenses recorded

an increase of 20.30% primarily on account of employee related costs.

Profit after tax and earnings per share increased by 3.87% as compared to corresponding period

last year.

Business Performance Highlights

In fabric care, competition intensified as key players in the market invested heavily on media and

in-store promotional campaigns. However, the Company also increased its media investment along

with ground and in-store activities to defend and grow its market share.

DIRECTORS� REVIEW

The directors of your Company are pleased to present un-audited condensed financial statements

of the Company for the six months period ended December 31, 2017.

Financial Performance Highlights

The financial performance of the Company for the period is summarized below:

Turnover

Gross Profit

- as %age to Net Sales

Selling & Distribution Costs


Administrative Expenses


Profit from Operations

Profit After Tax

Earnings per Share - Rupees

Increase/(Decrease)Amount in PKR million

18,043

5,293

37.49%

2,799

19.82%

180

1.28%

2,270

1,606

33.48

July- December2017

July- December2016

20,165

5,656

35.91%

3,155

20.03%

217

1.38%

2,285

1,668

34.78

11.76%

6.86%

(158 bps)

12.72%

21 bps

20.30%

10 bps

0.67%

3.87%

3.87%

Operating Results



The Company continues to enjoy the market leadership position in oral care. The category saw both

international and local brands becoming very active in media, digital and promotional activities.

The flagship brand, Colgate Maximum Cavity Protection remained focused on building consumption

and increasing penetration through effective oral health school education program 'Bright Smiles,

Bright Futures'.

The Company also started local manufacturing of value segment toothbrushes aiming for margin

improvement and locally relevant packaging versus imported toothbrushes.

Future Outlook

Devaluation of rupee and increase in raw material and commodity prices witnessed during the period

has started affecting the margins of the Company. Plans of increasing selling prices of selected

products are in place to manage margin. It is further anticipated that the uncertain economic and

political environment of the country will pose more business challenges in future.

The Company intends to deal with these challenges and achieve topline growth through product

innovation that is consumer relevant and based on in-depth understanding of how people live their

lives today.

Acknowledgement

We would like to express deep gratitude to our customers for their trust in our brands. We would

also like to appreciate our shareholders, bankers and suppliers for their continued support and our

employees for their dedication and contribution to the Company.

Karachi : January 23, 2018

On behalf of Board of Directors

IQBAL ALI LAKHANIChairman

ZULFIQAR ALI LAKHANIChief Executive


20172016/

20,165

5,656

35.91%

3,155

20.03%

217

1.38%

2,285

1,668

34.78

18,043

5,293

37.49%

2,799

19.82%

180

1.28%

2,270

1,606

33.48

11.76%

6.86%

( 158)

12.72%

21

20.30%

10

0.67%

3.87%

3.87%

7

AUDITORS' REPORT TO THE MEMBERS ON REVIEW OF

INTERIM FINANCIAL INFORMATION

Introduction

We have reviewed the accompanying condensed interim balance sheet of Colgate-Palmolive (Pakistan) Limited as at December 31, 2017, the related condensed interimprofit and loss account, condensed interim statement of changes in equity, condensedinterim cash flow statement and notes thereto for the six-month period then ended (here-in-after referred to as the �interim financial information�). Management is responsible forthe preparation and presentation of this interim financial information in accordance withapproved accounting standards as applicable in Pakistan for interim financial reporting.Our responsibility is to express a conclusion on this interim financial information basedon our review. The figures included in the condensed interim profit and loss account forthe quarters ended December 31, 2017 and 2016 and the notes thereto have not beenreviewed as we are required to review only the cumulative figures for the six months periodended December 31, 2017.

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements2410, "Review of Interim Financial Information Performed by the Independent Auditor ofthe Entity". A review of interim financial information consists of making inquiries, primarilyof persons responsible for financial and accounting matters, and applying analytical andother review procedures. A review is substantially less in scope than an audit conductedin accordance with International Standards on Auditing and consequently does not enableus to obtain assurance that we would become aware of all significant matters that mightbe identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that theaccompanying interim financial information is not prepared, in all material respects, inaccordance with approved accounting standards as applicable in Pakistan for interimfinancial reporting.

Chartered AccountantsKarachi : January 23, 2018Engagement Partner : Khurshid Hasan

A. F. FERGUSON & CO.

A. F. FERGUSON & CO., Chartered Accountants, a member firm of the PwC networkState Life Building No. 1-C, I.I Chundrigar Road, P.O. Box 4716, Karachi-74000, PakistanTel: +92 (21) 32426682-6/32426711-5; Fax: +92 (21) 32415007/32427938/32424740; <www.pwc.com/pk>

KARACHI LAHORE ISLAMABAD


(Rupees in �000)

Zulfiqar Ali LakhaniChief Executive

Tasleemuddin Ahmed BatlayDirector

Mirza Rehan AhmedChief Financial Officer

As at December 31, 2017

CONDENSED INTERIM BALANCE SHEET (Unaudited-Note 2)

December 31,2017

(unaudited)

June 30,2017

(audited)

Note

ASSETSNON-CURRENT ASSETSProperty, plant and equipment 4 2,837,221 2,731,203Intangibles 18,071 23,157Long term loans 47,877 44,221Long term security deposits 18,032 17,960

2,921,201 2,816,541CURRENT ASSETSStores and spares 218,704 196,150Stock in trade 5 3,234,081 3,107,762Trade debts 783,945 742,032Loans and advances 229,972 242,512Trade deposits and short term prepayments 225,992 116,646Other receivables 10,454 11,530Accrued profit 17,462 14,600Taxation 539,372 143,220Short term investments 6 6,499,913 6,570,291Cash and bank balances 1,311,821 989,140

13,071,716 12,133,883

TOTAL ASSETS 15,992,917 14,950,424

EQUITY AND LIABILITIESSHARE CAPITAL AND RESERVESAuthorised share capital 750,000 750,000

Issued, subscribed and paid-up capital 479,549 479,549Reserves 12,067,591 11,358,955Remeasurement on post retirement benefits obligation (88,621) (88,621)Surplus on revaluation of investments 33,631 4,043

12,492,150 11,753,926LIABILITIESNON-CURRENT LIABILITIESDeferred taxation 187,965 200,925Long term deposits 77,860 66,872

265,825 267,797CURRENT LIABILITIESTrade and other payables 7 3,234,942 2,928,701

TOTAL LIABILITIES 3,500,767 3,196,498

TOTAL EQUITY AND LIABILITIES 15,992,917 14,950,424

CONTINGENCIES AND COMMITMENTS 8

The annexed notes 1 to 15 form an integral part of these condensed interim financialstatements.





Note Six monthsperiod endedDecember 31,

2017

Six monthsperiod endedDecember 31,

2016

Quarter endedDecember 31,

2017


2016

(Rupees in �000)

Turnover 10,036,050 9,248,379 20,165,479 18,043,191Sales tax (1,592,194) (1,469,134) (3,195,737) (2,860,427)Trade and other discounts (625,293) (521,511) (1,220,419) (1,063,982)

Net turnover 7,818,563 7,257,734 15,749,323 14,118,782

Cost of sales (5,022,771) (4,505,782) (10,093,323) (8,825,422)

Gross profit 2,795,792 2,751,952 5,656,000 5,293,360Selling and distribution costs (1,593,034) (1,448,510) (3,154,722) (2,798,919)Administrative expenses (108,514) (91,041) (216,779) (180,216)Other expenses (101,996) (91,179) (199,151) (179,884)Other income 124,078 68,415 199,746 135,757

Profit from operations 1,116,326 1,189,637 2,285,094 2,270,098

Finance cost and bank charges (6,636) (6,914) (13,036) (12,231)

Profit before taxation 1,109,690 1,182,723 2,272,058 2,257,867Taxation- Current - for the period 287,541 375,461 650,641 722,961

- for prior year (28,136) (29,518) (28,136) (29,518)

259,405 345,943 622,505 693,443- Deferred (882) (32,980) (18,182) (41,170)

(258,523) (312,963) (604,323) (652,273)

Profit after taxation 851,167 869,760 1,667,735 1,605,594

Other comprehensive ( loss) /income for the period - net of tax

Items that may be reclassified subsequently to profit and loss

(Deficit) / surplus on investmentscategorised as 'available for sale' - net (3,184) 44,755 34,810 74,355

Impact of deferred tax 477 (6,713) (5,222) (11,153)

(2,707) 38,042 29,588 63,202Total comprehensive income for the period 848,460 907,802 1,697,323 1,668,796

Earnings per share - (Rupees) 9 17.75 18.14 34.78 33.48

The annexed notes 1 to 15 form an integral part of these condensed interim financial statements.

CONDENSED INTERIM PROFIT AND LOSS ACCOUNT (Unaudited- Note 2)

For the Quarter and Six months period ended December 31, 2017





CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY (Unaudited - Note 2)

For the Six months period ended December 31, 2017

7,296

-

63,202

63,202

-

-

70,498

4,043

-

29,588

29,588

-

-

33,631

(Rupees in �000)

Issued,subscribedand paid upshare capital

Capitalreserve-

sharepremium

Generalreserve

Unappro-priatedprofit

TotalEquity

Revenue reserves Surplus onrevaluation

ofinvestments-

net of tax

SubTotal-

reserves

Remeasurementon post retire-ment benefitsobligation- net

of tax

7,428,000

-

-

-

1,380,000

-

8,808,000

8,808,000

-

-

-

1,578,000

-

10,386,000

10,677,367)

1,605,594)

63,202)

1,668,796)

-

(1,438,648)

10,907,515)

11,753,926)

1,667,735)

29,588)

1,697,323)

-

(959,099)

12,492,150)

Balance as at July 1, 2016

Comprehensive income for the period

Profit after taxation for the six months period ended December 31, 2016

Other comprehensive income

Total comprehensive income for the period ended December 31, 2016

Transfer to general reserve

Transactions with owners

Final dividend for the year ended June 30, 2016 (Rs 30 per share)

Balance as at December 31, 2016

Balance as at July 1, 2017

Comprehensive income for the period

Profit after taxation for the six months period ended December 31, 2017

Other comprehensive income

Total comprehensive income for the period ended December 31, 2017

Transfer to general reserve

Transactions with owners

Final dividend for the year ended June 30, 2017 (Rs 20 per share)

Balance as at December 31, 2017

479,549

-

-

-

-

-

479,549

479,549

-

-

-

-

-

479,549

2,819,048)

1,605,594)

-

1,605,594)

(1,380,000)

(1,438,648)

1,605,994)

2,537,499)

1,667,735)

-

1,667,735)

(1,578,000)

(959,099)

1,668,135)

10,260,504)

1,605,594)

-

1,605,594)

-

(1,438,648)

10,427,450)

11,358,955)

1,667,735)

-

1,667,735)

-

(959,099)

12,067,591)

(69,982)

-

-

-

-

-

(69,982)

(88,621)

-

-

-

-

-

(88,621)

The annexed notes 1 to 15 form an integral part of these condensed interim financial statements.

13,456

-

-

-

-

-

13,456

13,456

-

-

-

-

-

13,456





CONDENSED INTERIM CASH FLOW STATEMENT (Unaudited - Note 2)For the Six months period ended December 31, 2017

(Rupees in �000)


2017


2016

Note

CASH FLOWS FROM OPERATING ACTIVITIES

Cash generated from operations 10 2,447,916 2,277,082

Staff retirement gratuity paid - (2,683)

Finance cost and bank charges paid (13,036) (12,231)

Taxes paid (1,018,657) (641,584)

Long term loans (3,656) (6,947)

Long term security deposits (assets) (72) -

Long term deposits (liabilities) 10,988 11,176

Net cash generated from operating activities 1,423,483 1,624,813

Capital expenditure (434,351) (181,418)

Purchase of intangibles - (1,976)

Proceeds from disposal of property, plant and equipment 11,953 16,647

Profit received on savings accounts and

term deposit receipts 67,295 23,266

Profit received on Treasury Bills 52,080 -

Profit received on Pakistan Investment Bonds 5,058 11,121

Profit received on Musharakah Certificates 3,896 -

Short term investments made during the period (5,693,193) (2,305,907)

Disposal / redemption of short term investments 5,626,586 3,483,186

Net cash (used in) / generated from investing activities (360,676) 1,044,919

CASH FLOWS FROM FINANCING ACTIVITY

Dividend paid (958,126) (1,435,187)

Net increase in cash and cash equivalents 104,681 1,234,545

Cash and cash equivalents at the beginning of the period 4,415,140 1,798,227

Cash and cash equivalents at the end of the period 11 4,519,821 3,032,772

The annexed notes 1 to 15 form an integral part of these condensed interim financial

statements.


NOTES TO AND FORMING PART OF THE

CONDENSED INTERIM FINANCIAL STATEMENTS (Unaudited - Note 2)For the Six months period ended December 31, 2017

1. THE COMPANY AND ITS OPERATIONS

Colgate-Palmolive (Pakistan) Limited (the Company) was initially incorporated inPakistan on December 5, 1977 as a public limited company with the name of NationalDetergents Limited. The name of the Company was changed to Colgate-Palmolive(Pakistan) Limited on March 28, 1990 when the Company entered into a ParticipationAgreement with Colgate-Palmolive Company, USA. The Company is listed on PakistanStock Exchange. The registered office of the Company is situated at Lakson Square,Building No. 2, Sarwar Shaheed Road, Karachi.

The Company is mainly engaged in the manufacture and sale of detergents, personalcare and other related products.

2. BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES

2.1 STATEMENT OF COMPLIANCE

As per the requirements of circular no. CLD/CCD/PR(11)/2017 dated October 4, 2017issued by the Securities & Exchange Commission of Pakistan (SECP), companieswhose financial year, including quarterly and other interim periods, closes on or beforeDecember 31, 2017, shall prepare their financial statements, including interim financialstatements in accordance with the provisions of the repealed Companies Ordinance,1984.

Accordingly, these condensed interim financial statements have been prepared inaccordance with the requirements of the International Accounting Standard (lAS) 34,Interim Financial Reporting and provisions of and directives issued under the repealedCompanies Ordinance, 1984. In case where requirements differ, the provisions of ordirectives issued under the repealed Companies Ordinance, 1984 have been followed.

2.2 These condensed interim financial statements do not include all the information anddisclosures required in an annual audited financial statements, and should be readin conjunction with the Company's annual audited financial statements for the yearended June 30, 2017.

2.3 These condensed interim financial statements comprise of the condensed interimbalance sheet as at December 31, 2017 and the condensed interim profit and lossaccount, the condensed interim statement of changes in equity, the condensed interimcash flow statement and notes thereto for the six months period then ended whichhave been subjected to a review in accordance with the listing regulations but notaudited. These condensed interim financial statements also include the condensedinterim profit and loss account for the quarter ended December 31, 2017 which hasneither been reviewed nor audited.

2.4 The comparative balance sheet presented in these condensed interim financialstatements as at June 30, 2017 has been extracted from the annual audited financial


statements of the Company for the year ended June 30, 2017 whereas the comparativecondensed interim profit and loss account, condensed interim statement of changesin equity and condensed interim cash flow statement together with the notes theretofor the six months period ended December 31, 2016 have been extracted from thecondensed interim financial statements of the Company for the six months periodthen ended, which were subjected to a review but not audited. The comparativecondensed interim profit and loss account for the quarter ended December 31, 2016included in these condensed interim financial statements was neither subjected to areview nor audited.

2.5 Change in accounting standards, interpretations and amendments to publishedapproved accounting standards that are effective

a) Standards, interpretations and amendments to published approved accountingstandards that are effective

There are certain new amendments to approved accounting standards which aremandatory for the Company's accounting periods beginning on or after July 1, 2017.However, such do not have any significant impact on the Company�s financial reporting,therefore, have not been detailed in these condensed interim financial statements.

b) Standards, interpretations and amendments to published approved accountingstandards that are not yet effective but relevant

The following are the new standards, amendments to existing approved accountingstandards and new interpretations that will be effective for the periods beginning onor after July 1, 2018 that may have an impact on the financial statements of theCompany.

IFRS 9 'Financial instruments' - This standard replaces the guidance in IAS 39. Itincludes requirements on the classification and measurement of financial assets andliabilities; it also includes an expected credit loss model that replaces the currentincurred loss impairment model.

IFRS 15 'Revenue from contracts with customers' - IFRS 15 replaces the previousrevenue standards: lAS 18 Revenue, lAS 11 Construction Contracts, and the relatedinterpretations on revenue recognition.

IFRS 15 introduces a single five-step model for revenue recognition and establishesa comprehensive framework for recognition of revenue from contracts with customersbased on a core principle that an entity should recognise revenue representing thetransfer of promised goods or services to customers in an amount that reflects theconsideration to which the entity expects to be entitled in exchange for those goodsor services.

The management is in the process of assessing the impact of changes laid down bythese standards on its financial statements.

2.6 The accounting policies and the methods of computation adopted in the preparationof these condensed interim financial statements are same as those applied in thepreparation of the financial statements for the year ended June 30, 2017.


(Rupees in �000)

December 31,2017

(unaudited)

June 30,2017

(audited)

Note

4. PROPERTY, PLANT AND EQUIPMENT

Operating fixed assets (at net book value) 4.1 to 4.5 2,563,649 2,465,377Capital work-in-progress (at cost) 4.6 273,572 265,826

2,837,221 2,731,203

4.1 Additions - operating fixed assets (at cost)

Factory building on leasehold land 17,676 2,200Plant and machinery 217,772 58,518Electric fittings and installation 18,810 4,692Furniture and fixtures 37,299 174Tools and equipment 40,854 10,995Vehicles 64,315 31,561Computers and accessories 15,256 5,070Office equipment 14,623 5,281

426,605 118,491

4.1.1 Additions include transfers from capital work-in-progress aggregating Rs 263.807million (December 31, 2016: Rs 1.26 million).

3. SIGNIFICANT ACCOUNTING ESTIMATES, JUDGEMENTS AND FINANCIAL RISKMANAGEMENT

The preparation of these condensed interim financial statements in conformity withthe approved accounting standards as applicable in Pakistan for interim reportingrequires management to make estimates, assumptions and use judgments that affectthe application of policies and reported amounts of assets and liabilities and incomeand expenses. Estimates, assumptions and judgments are continually evaluated andare based on the historical experience and other factors, including reasonableexpectations of future events. Revision to accounting estimates are recognisedprospectively commencing from the period of revision.

Judgements and estimates made by the management in the preparation of thesecondensed interim financial statements are same as those applied to financialstatements as at and for the year ended June 30, 2017.

The Company's financial risk management objectives and policies are consistent withthose disclosed in the financial statements as at and for the year ended June 30,2017.


2017


2016(Rupees in �000)


4.2 Disposals - operating fixed assets (at net book value)

Plant and Machinery 1,833 -Vehicles 4,017 6,533Computers and accessories 105 47Office equipment 67 80Tools and equipment 60 -

6,082 6,660

4.3 Depreciation charge for the period 322,019 281,651

4.4 Included in operating fixed assets are items having aggregate cost of Rs 37.380million (June 30, 2017: Rs 37.380 million) held by third parties for manufacturingcertain products of the Company. These operating fixed assets are free of lien andthe Company has full right of repossession of these assets.

4.5 During the period, the Company has identified certain items of operating fixed assetsfrom which further economic benefits are no longer being derived. Therefore, assetshaving cost of Rs 1.923 million (December 31, 2016: Rs 1.772 million) and net bookvalue of Rs 0.232 million (December 31, 2016: Rs 0.234 million) have been retiredfrom active use and have been written off in these condensed interim financialstatements.

4.6 Additions - capital work-in-progress (at cost)

Factory building on leasehold land 22,664 17,350Plant and machinery 223,197 15,746Electric fittings and installation 8,587 4,201Tools and equipment 4,337 2,768Furniture and fixtures 5,245 15,125Office equipment 7,396 6,011Computer and accessories 127 2,986

271,553 64,187

4.6.1 During the period, the Company has written off capital work-in-progress aggregatingRs Nil (December 31, 2016: Rs 0.139 million).


2017




(Rupees in �000)

December 31,2017

(unaudited)

June 30,2017

(audited)

Note

5. STOCK IN TRADE

Raw and packing materials 1,827,150 1,961,803Work-in-process 428,177 297,372

Finished goods - Manufactured 752,811 629,651Finished goods - Trading 225,943 218,936

978,754 848,587

3,234,081 3,107,762

5.1 Stock in trade include raw and packing materials in transit aggregating Rs 735.382million (June 30, 2017: Rs 984.621 million) and finished goods in transit aggregatingRs 20.026 million (June 30, 2017: Rs 27.529 million).

6. SHORT TERM INVESTMENTS

Investments - Loans and receivables(term deposits) 6.1 3,211,000 3,426,000

Investments - Available for sale 6.2 3,288,913 3,144,291

6,499,913 6,570,291

6.1 The rates of profits on these term deposits range between 5.0% to 6.7% (June 30,2017: 6.50% and 6.70%) per annum maturing between January and August 2018.

5,000

9,943

1,597

71,107

-

87,647

Lakson Money Market Fund (associated undertaking)

Lakson Income Fund (asociated undertaking)

Atlas Money Market Fund

NAFA Money Market Fund

Sukuk Bonds

1,972

9,699

1,554

39

-

13,264

6.2 Name of the investees As at July01, 2017

Purchaseduring the

period

Sales / Redemptionsduring the

period

As atDecember 31,

2017

Fair Value asat December

31, 2017

UnrealisedGain as

at December31, 2017

Average costas at December

31, 2017

(Number of units in �000) (Rupees in �000)

-

(9,943)

(1,596)

-

-

(11,539)

6,972

9,699

1,555

71,146

-

89,372

700,000

1,000,000

800,000

700,000

49,500

3,249,500

716,715

1,001,044

801,320

720,334

49,500

3,288,913

16,715

1,044

1,320

20,334

-

39,413


7. TRADE AND OTHER PAYABLES

Trade creditors 7.1 722,824 715,303Accrued liabilities 7.2 1,661,153 1,357,178Bills payable 241,446 211,449Advances from distributors 7.3 86,692 43,225Sales tax payable 162,923 -Royalty payable to an associated undertaking 133,709 182,091Workers� profits participation fund 121,757 259,321Workers� welfare fund 44,671 98,642Retention money payable 6,068 5,622Unclaimed dividend 10,669 9,696Others 7.4 43,030 46,174

3,234,942 2,928,701

7.1 This includes Rs 66.122 million (June 30, 2017: Rs 60.705 million) payable torelated parties.

7.2 This includes Rs 50.252 million (June 30, 2017: Rs 24.296 million) payable torelated parties.

7.3 This includes Rs 9.186 million (June 30, 2017: Rs 0.115 million) in relation toadvance from a related party.

7.4 This includes Rs 2.202 million (June 30, 2017: Rs 2.092 million) payable to relatedparties.

7.5 There has been no change in short-term borrowing facilities from various banks onmark-up basis from those that are mentioned in note 22.1 of annual audited financialstatements for the year ended June 30, 2017.

8. CONTINGENCIES AND COMMITMENTS

8.1 Contingencies

8.1.1 Certain cases have been filed against the Company by some employees claiming Rs 2.072 million (June 30, 2017:Rs 2.640 million) in aggregate. Provision has notbeen made in these condensed interim financial statements for the said amountsas the management of the Company, based on the advice of its legal counselhandling the subject cases, is of the opinion that matters shall be decided in theCompany's favour.

8.1.2 During the year ended June 30, 2017, the Company received letters dated April20, 2017 from the Directorate of Post Clearance Audit (PCA), Customs House,Karachi, stating that the Company has imported various consignments of "ColgateBrand Toothbrushes" and cleared the subject goods at a lowered value than the

December 31,2017

(unaudited)

June 30,2017

(audited)

(Rupees in �000)

Note

value determined vide valuation database Letter No.32 issued by Directorate GeneralCustoms Valuation dated August 19, 2016 (i.e. $ 0.33 per piece) and sought anexplanation from the Company as to why Customs Duty of Rs 29.293 million,Regulatory Duty of Rs 15.386 million, Sales Tax of Rs 33.751 million, AdditionalSales Tax of Rs 5.956 million and Income Tax of Rs 14.294 million may not berecovered from the Company. During the period, these orders were withdrawn bythe respective authorities. Further, the Company has also filed a revision petitionagainst the valuation ruling No. 1067 / 2017 issued by Collectors of Customsdetermining values of Branded Toothbrushes on a higher rate. The Company hasalso obtained a stay order against the aforementioned ruling (issued by Collectorof Customs) to restrain the custom authorities from taking any coercive actionagainst the Company.

The management of the Company, based on the advice of its legal counsel isconfident of a favourable outcome.

8.1.3 During the period, the Company received an order dated August 10, 2017 from TheCompetition Commission of Pakistan imposing a penalty of Rs 10 million undersection 10 of The Competition Act, 2010 against the show cause notice issued forindulging in deceptive marketing practices. The amount of the penalty has beenrecognised in these financial statements under the head 'Other Expenses.' However,the Company has filed an appeal with the Competition Appellate Tribunal againstthe above mentioned order which has also granted an interim relief order in favourof the Company stating that no coercive action shall be taken until the disposal ofappeal.

8.1.4 There has been no change in the cases disclosed as contingency in notes 23.1.2,23.1.3 and 23.1.5 to the Company's financial statements for the year ended June30, 2017.

8.1.5 Contingent liabilities in respect of indemnities given to financial institutions forguarantees issued by them on behalf of the Company in the normal course ofbusiness aggregate Rs 38.142 million (June 30, 2017: Rs 38.142 million).

8.1.6 Contingent liabilities in the form of bank guarantees issued in favour of Collectorof Customs for clearance of tooth brushes shipments under section 81 aggregateRs 55.662 million (June 30, 2017: Rs 41.887 million) as mentioned in note 8.1.2.

8.2 Commitments

8.2.1 Commitments in respect of capital expenditure and inventory items amount to Rs62.344 million and Rs 391.230 million respectively (June 30, 2017: Rs 51.974 millionand Rs 1,050 million respectively).

8.2.2 Outstanding letters of credit amount to Rs 1,746.317 million (June 30, 2017: Rs980.045 million).

8.2.3 Outstanding duties leviable on clearing of stocks amount to Rs 13.802 million (June30, 2017: Rs 14.382 million).



9. EARNINGS PER SHARE

(Rupees)

(Number of shares)

Profit after taxation 851,167 869,760 1,667,735 1,605,594

Weighted average number of

ordinary shares outstanding

during the period 47,954,929 47,954,929 47,954,929 47,954,929

Earnings per share 17.75 18.14 34.78 33.48


2017


2016


2017


2016

(Rupees in �000)

9.1 There were no dilutive potential ordinary shares outstanding as at December 31,2017 and 2016.

10. CASH GENERATED FROM OPERATIONS

Profit before taxation 2,272,058 2,257,867

Adjustment for non-cash and other items:

Depreciation and amortisation expense 327,105 283,882Gain on disposal of items of operating fixed assets (5,871) (9,987)Property plant and equipment written off 4.5 232 234Profit on savings accounts and Term Deposit Receipts (72,812) (28,755)Profit on Treasury Bills (52,080) (61,117)Profit on PIBs (1,956) (10,159)Profit on Sukuks (447) -Profit on Musharakah Certificates (3,896) -Gain on redemption of short term investments (46,205) (8,581)Finance cost and bank charges 13,036 12,231Stock in trade written off 502 4,288Capital work-in-progress charged off - 139Working capital changes 10.1 18,250 (162,960)

2,447,916 2,277,082


2017



Note


10.1 Working capital changes

(Increase) / decrease in current assets:Stores and spares (22,554) (22,593)Stock in trade (126,821) (84,992)Trade debts (41,913) 43,788Loans and advances 12,540 47,928Trade deposits and short term prepayments (109,346) (1,586)Other receivables 1,076 (554)

(287,018) (18,009)Increase / (decrease) in current liabilities:Trade and other payables 305,268 (144,951)

18,250 (162,960)

11. CASH AND CASH EQUIVALENTS

Cash and bank balances 1,311,821 778,393Short term investments - TDRs 6 3,208,000 2,100,000Short term investments - Held to maturity - 154,379

4,519,821 3,032,77212. RELATED PARTIES

12.1 Disclosure of transactions and closing balances between the Company and relatedparties.

The related parties comprise associated companies, staff retirement funds, directorsand key management personnel. The Company in the normal course of businesscarries out transactions with various related parties. The Company enters intotransactions with related parties on the basis of mutually agreed terms. Significantbalances and transactions with related parties are as follows:

Sale of goods, services provided and

reimbursement of expenses Associates 32,560 577

Purchase of goods, services received and

reimbursement of expenses Associates 1,178,337 970,535

Purchase of short term investments Associates 1,200,000 600,000

Sale proceeds on redemption of short

term investments Associates 1,000,000 200,000

Profit on short term investments Associates 24,808 2,643

Rent, allied and other charges Associates 17,901 16,538

Royalty charges Associates 69,952 63,359

Insurance claims received Associates 5,370 847

(Rupees in �000)

Nature of Transactions Six monthsperiod endedDecember 31,

2017


2016

Relationshipwith the

Company


2017



Note


Nature of Transactions

(Rupees in �000)


2017


2016

Relationshipwith the

Company

Insurance commission income Associates 4,652 5,934Purchase of property, plant and equipment Associates 333 20

Contribution to staff retirement benefits Employees funds 33,813 50,819

Key management personnel

compensation paid Key management

personnel 35,124 30,576

Donations Associate 10,500 9,000

Dividend paid Associates 843,497 1,265,245

(Rupees in �000)

December 31,2017

(unaudited)

June 30,2017

(audited)

Nature of balances Relationshipwith the

Company


2017


2016

Personal Care 24% 24%

Home Care 72% 73%

Others 4% 3%

100% 100%

Trade debts Associates 595 2,827

Loans and advances Associates 8,200 1,609

Other receivables Associates 60 470

Short term investments Associates 1,717,759 1,501,761

Trade and other payables Associates Refer note 7

13. ENTITY-WIDE INFORMATION

13.1 The Company constitutes of a single reportable segment, the principal classes ofwhich are Personal Care, Home Care and others.

13.2 Information about products

The Company's principal classes of products accounted for the following percentagesof sales:





13.3 Information about geographical areas

The Company does not hold non-current assets in any foreign country. Revenuesfrom external customers attributed to foreign countries in aggregate are not material.

13.4 Information about major customers

The Company does not have transactions with any external customer which amountto 10 percent or more of the Company's revenues.

14. NON-ADJUSTING EVENT AFTER THE BALANCE SHEET DATE

The Board of Directors in its meeting held on January 23, 2018 have proposed aninterim cash dividend of Rs. 15 per share (December 31, 2016: Rs. 15 per share)in respect of the year ending June 30, 2018. The condensed interim financialinformation for the half year ended December 31, 2017, does not include the effectof this dividend which will be accounted for in the condensed interim financialinformation for the quarter ending March 31, 2018.

15. DATE OF AUTHORISATION FOR ISSUE

These condensed interim financial statements were authorised for issue onJanuary 23, 2018 by the Board of Directors of the Company.

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