Smiles make the

world go round
Annual Report 2021 – 22
 Annual Report 2021 – 22

Contents
Company Information 02

Core Values 03

Our Story / Milestones 04

Awards 05

Our Equities and Initiatives 06

Notice of Annual General Meeting 09

Financial Summary 14

6 Years at a Glance 15

Key Operating and Financial Data & Ratios 16

Statement of Value Added 17

Review Report by the Chairman 18

Directors’ Report 19

Statement of Compliance with Listed Companies

(Code of Corporate Governance) Regulations, 2019 25

Review Report on the Statement of Compliance contained in

Listed Companies (Code of Corporate Governance) Regulations, 2019 28

Report on the Audit of the Financial Statements 29

Statement of Financial Position 34

Statement of Profit or Loss and Other Comprehensive Income 35

Statement of Changes in Equity 36

Statement of Cash Flows 37

Notes to and Forming Part of the Financial Statements 38

Pattern of Shareholding 84

Directors’ Report - In Urdu 92

Review Report by the Chairman - In Urdu 93

Form of Proxy

Form of Proxy - In Urdu

01
Company Information

BOARD OF DIRECTORS EXTERNAL AUDITORS

Iqbal Ali Lakhani - Chairman A. F. Ferguson & Co.
Amin Mohammed Lakhani Chartered Accountants
Aliya Saeeda Khan
Kamran Yousuf Mirza INTERNAL AUDITORS
Syed Shahid Ali Bukhari BDO Ebrahim & Co.
Peter John Graylin Chartered Accountants
Xuan Dai
Zulfiqar Ali Lakhani - Chief Executive SHARES REGISTRAR
FAMCO Associates (Private) Limited
ADVISOR 8-F, Near Hotel Faran, Nursery,
Sultan Ali Lakhani Block-6, P.E.C.H.S., Shahra-e-Faisal,
Karachi
AUDIT COMMITTEE
Aliya Saeeda Khan - Chairperson REGISTERED OFFICE
Iqbal Ali Lakhani Lakson Square, Building No.2,
Amin Mohammed Lakhani Sarwar Shaheed Road,
Kamran Yousuf Mirza Karachi-74200 Pakistan

HUMAN RESOURCE FACTORIES

& REMUNERATION COMMITTEE G-6, S.I.T.E. Kotri
Kamran Yousuf Mirza - Chairman District Jamshoro (Sindh)
Iqbal Ali Lakhani
Zulfiqar Ali Lakhani H-36(B), S.I.T.E. Kotri
Aliya Saeeda Khan District Jamshoro (Sindh)

COMPANY SECRETARY 217, Sundar Industrial Estate,

Mansoor Ahmed Raiwind Road, Lahore

CHIEF FINANCIAL OFFICER WEBSITE

Mudassir Iqbal [Link]

02
 Annual Report 2021 – 22

Core Values
Caring
The Company cares about people: Colgate people, customers,
shareholders and business partners. Colgate is committed to act
with compassion, integrity, honesty and high ethics in all
situations, to listen with respect to others and to value differences.
The Company is also committed to protect the global
environment, to enhance the communities where Colgate people
live and work, and to be compliant with government laws and
regulations.

Teamwork
All Colgate people are part of a team, committed to working
together. Only by sharing ideas, technologies and talents can the
Company achieve and sustain profitable growth.

Continuous Improvement
Colgate is committed to getting better every day in all it does, as
individuals and as teams. By better understanding consumers'
and customers’ expectations and continuously working to
innovate and improve products, services and processes, Colgate
will “become the best”.

03
 Our Story / Milestones
1977 1981 1983 1985 1986
Entered into licensing
Incorporated as Launched first Launched Express agreement with Launched Palmolive
Public Limited product – Double Power – Pakistan’s Colgate-Palmolive Soap
Company named as Action Brite first poly-bag Company U.S.A.
National Detergents packed detergent Launched Max
Limited Dishwash Liquid

1988 1990 1992 1995 1996

Colgate-Palmolive
Launched Colgate Company U.S.A Launched Bonus – first Launched Max Gross sales crossed
Toothpaste acquired 30% equity economical detergent Dishwash Bar Rs. 1 Billion
powder
Name changed to
Colgate-Palmolive
(Pakistan) Limited

2001 2003 2004 2006 2007

Acquired Sparkle Launched Colgate Sulphonic Acid Launched Colgate Launched Colgate
Toothpaste Herbal Toothpaste Plant made Misvak MaxFresh
operational

2009 2010 2011 2014 2015

Sundar and Kotri
Implemented Net profit crossed Laminate Tube Launched Colgate Started local
SAP ERP Rs. 1 Billion Factories made Sensitive Pro-Relief production of
operational Toothbrushes
Launched Colgate
Sensitive base

2016 2017 2018 2020 2021

Launched Palmolive Launched Colgate Started local production Gross sales crossed Net profit crossed
Shampoo Plax of Colgate Total CSPR Rs. 50 Billion Rs. 5 Billion
Launched Max APC
Nationwide

04
 Awards
TOP 25 COMPANIES
AWARD
The Company has been ranked amongst
the top 25 listed companies by the
Pakistan Stock Exchange (PSX) on 16
occasions since 2004. PSX judges
companies based on comprehensive
criteria, including capital efficiency,
profitability, free float of shares,
transparency, corporate governance &
investors’ relations, and compliance with
listing of companies & securities
regulations.

MAP’S CORPORATE
EXCELLENCE AWARD
The Company was presented its 10th
consecutive ‘Corporate Excellence
Award’ at the 36th Corporate Excellence
Awards Ceremony organized by the
Management Association of Pakistan.
The Company was also awarded
Corporate Excellence Certificates on six
earlier occasions in recognition of its
achievements and overall performance.

05
 Oral Care
Building Consumption and Driving Awareness
As part of its ‘Bright Smiles, Bright Futures’ school
program, Colgate celebrated young artists once again
this year with its ‘My Bright Smile’ Global Art Contest
2022. Aimed at raising oral hygiene awareness and
inculcating good brushing habits through art, this
contest gave children ages 6-9 years the chance to
express their creativity and show what their bright smile
means to them.

67,654 artworks were received from all over the country,

via submissions from schools and through online
platforms. This year too, a young artist from Pakistan
gets the honor of being featured in the Colgate ‘My
Bright Smile’ Global Calendar.

Surface Care
Max Bar
Max Bar continues to lead the Dishwash
category and launched its new
campaign for its star SKU, Long Bar. The
Campaign leverages Max Bar’s
fundamental claim ‘One Long Bar lasts
for a month’, where it emerges as the
ultimate kitchen hero.

06
 Annual Report 2021 – 22

Fabric Care
Brite
The flagship variant Brite Maximum Power got restaged with a contemporary packaging
design. Building on the premium and sophisticated look and feel, the new design will
enhance the Brand’s appeal to the consumers. This initiative will be complemented with a
mega IMC campaign comprising new TVC copies, a digital campaign, POSM drive, in-store
activations and direct-to-consumer activities covering multiple touchpoints.

07
 Express Power
Express Power launched an all-new
communication to boost further its ‘Why
Pay More’ proposition. The key message
was communicated effectively through
an animated TVC, and the campaign
was supported by advertising on
traditional as well as digital media.
Additionally, investment in store visibility initiatives helped improve the brand’s availability
and share of shelf.

Bonus Tristar
The value segment felt the brunt of the
increase in raw material prices the most.
To continue driving conversion in this
segment, Bonus Tristar promised its
consumers the best value for money. The
new campaign helped reinforce Bonus
Tristar’s positioning as the brand that
offers the most powder at any given
price point. Moreover, the Company
continues to invest in ensuring strong
brand distribution in not only urban markets, but also in rural markets where regional
brands are growing stronger due to disparate trade spends.

08
 Annual Report 2021 – 22

Notice of Annual General Meeting

NOTICE IS HEREBY GIVEN that the 44th Annual General Meeting of COLGATE-PALMOLIVE (PAKISTAN)
LIMITED will be held on Monday, September 26, 2022 at 03:00 p.m. at Avari Towers Hotel, Fatima Jinnah
Road, Karachi as well as through Electronic means/Video link facility to transact the following business:

ORDINARY BUSINESS

1. To receive, consider and adopt the audited financial statements of the Company for the year ended
June 30, 2022 together with the Directors’ and Auditors’ reports thereon.

2. To declare final dividend in cash @ 280% i.e. Rs.28.00 per share of Rs.10.00 each and by way of
issue of fully paid bonus shares @ 15% in the proportion of Three shares for every Twenty shares of
Rs.10.00 each held by the members as recommended by the Board of Directors. This is in addition
to interim cash dividend @ 245% i.e. Rs.24.50 per share already paid.

3. To appoint Auditors and fix their remuneration.

SPECIAL BUSINESS

4. To consider, subject to declaration of the final dividend as above, to capitalize a sum of

Rs.109,193,380 by way of issue of 10,919,338 fully paid bonus shares of Rs.10.00 each and if
thought fit to pass an ordinary resolution in the matter.

Statement under Section 134 of the Companies Act, 2017 in the above matter mentioned in item No.4 is
annexed.

By Order of the Board

(MANSOOR AHMED)
Karachi: August 29, 2022 Company Secretary

NOTES:

1. The share transfer books of the Company will remain closed from September 20, 2022 to September
26, 2022 (both days inclusive). Transfers received in order by the Shares Registrar of the Company,
M/s. FAMCO Associates (Private) Limited, 8-F, Near Hotel Faran, Nursery, Block-6, P.E.C.H.S.,
Shahra-e-Faisal, Karachi up to the close of business on September 19, 2022 will be treated in time
for entitlement of the dividend and bonus shares.

2. A member, who has deposited his/her shares into Central Depository Company of Pakistan Limited,
must bring his/her participant’s ID number and CDC account/sub-account number along with
original Computerized National Identity Card (CNIC) or original Passport at the time of attending the
meeting.

09
3. Participation in the AGM proceedings via physical presence or through video link facility:

The arrangement for attending the AGM through electronic means will be as under:

1. To facilitate our members who want to attend AGM through zoom application - a video link facility.

2. Shareholders interested in attending the AGM either physically or through Zoom application are
hereby requested to get themselves registered with the Company Secretary office by providing
the following details at the earliest but not later than 48 hours before the time of AGM (i.e. before
03.00 p.m. on September 23, 2022) through following means:

a) Mobile/WhatsApp: 0315 5008228

b) E-mail: mansoor@[Link]

Shareholders are advised to mention Name, CNIC Number, Folio/CDC Account Number, cell number
and email ID for identification.

Member wishing to attend in person must also provide a copy of their vaccination certificates at the
above e-mail address.

Upon receipt of the above information from the interested shareholders, the Company will send the
login credentials at their e-mail address. On the date of AGM, shareholders will be able to login and
participate in the AGM proceedings through their smartphone/computer devices.

In view of the above, the Shareholders can also provide their comments/suggestions for the
proposed agenda items of the AGM by using the aforesaid means.

The Company reserves the right to refuse entry to any member who has not pre-registered for
physical attendance or is not carrying their vaccination card with them. These measures are
necessary to ensure the safety and the health of all present.

4. A member entitled to attend and vote at the Annual General Meeting may appoint another member
as his/her proxy to attend, speak and vote instead of him/her, and a proxy so appointed shall have
such rights, as respects attending, speaking and voting at the meeting as are available to a member.
A proxy must be a member of the Company.

5. Form of proxy, in order to be valid must be properly filled-in/executed and received at the registered
office of the Company situated at Lakson Square, Building No.2, Sarwar Shaheed Road, Karachi not
later than 48 hours before the time of the meeting excluding holidays.

6. Members holding shares in physical form are requested to promptly notify Shares Registrar of the
Company of any change in their addresses. Shareholders maintaining their shares in electronic form
should have their address updated with their participant or CDC Investor Accounts Service.

7. Under the provisions of Section 242 of the Companies Act, 2017, it is mandatory for a listed Company
to pay cash dividend to its shareholders only through electronic mode directly into bank account
designated by the entitled shareholders.

In order to receive dividends directly into their bank account, shareholders are requested to fill in
Electronic Credit Mandate Form available on Company’s website and send it duly signed along with
a copy of CNIC to the Shares Registrar of the Company M/s. FAMCO Associates (Private) Limited, in
case of physical shares.

10
 Annual Report 2021 – 22

In case shares are held in CDC then Electronic Credit Mandate Form must be submitted directly to
shareholder’s broker/participant/CDC account services. No further action is required if IBAN has
already been incorporated/updated in the CDC account or physical folio of the shareholder.

8. Pursuant to Notification vide SRO.787(1)/2014 of September 08, 2014, SECP has directed to facilitate
the members of the company receiving Annual Financial Statements and Notices through electronic
mail system (e-mail). We are pleased to offer this facility to our members who desire to receive
Annual Financial Statements and Notices of the Company through e-mail in future. In this respect
members are hereby requested to convey their consent via e-mail on a standard request form which
is available at the Company website i.e. [Link]. Please ensure that your e-mail has
sufficient rights and space available to receive such e-mail which may be larger than 1 MB file in size.
Further, it is the responsibility of the member to timely update the Shares Registrar of any change in
the registered e-mail address.

9. (i) The rates of deduction of income tax from dividend payments under Section 150 of the
Income Tax Ordinance, 2001 shall be as follows:

1. Shareholders appearing in Active Taxpayers List (ATL) 15%

2. Shareholders not appearing in Active Taxpayers List (ATL) 30%

To enable the Company to make tax deduction on the amount of cash dividend @ 15%
instead of 30%, shareholders whose names are not entered into the Active Taxpayers List
(ATL) provided on the website of FBR, despite the fact that they are filers, are advised to
make sure that their names are entered in ATL before the first day of book closure, otherwise
tax on their cash dividend will be deducted @ 30% instead of 15%.

(ii) Withholding Tax exemption from the dividend income, shall only be allowed if copy of valid
tax exemption certificate or stay order from a competent court of law is made available to
FAMCO Associates (Private) Limited, by the first day of Book Closure.

(iii) Further, according to clarification received from Federal Board of Revenue (FBR),
with-holding tax will be determined separately on ‘Filer/Non-Filer’ status of Principal
shareholder as well as Joint-holder(s) based on their shareholding proportions, in case of
joint accounts.

In this regard all shareholders who hold shares jointly are requested to provide shareholding
proportions of Principal shareholders and Joint-holder(s) in respect of shares held by them (only if not
already provided) to our Shares Registrar, in writing as follows:

Principal Shareholder Joint Shareholder

Shareholding Shareholding
Company Folio/CDS Total Name and Proportion Name and Proportion
Name Account # Shares CNIC # CNIC #
(No. of Shares) (No. of Shares)

The required information must reach our Shares Registrar within 10 days of this notice; otherwise, it
will be assumed that the shares are equally held by Principal shareholder and Joint-holder(s).

11
 (iv) For any query/problem/information, the investors may contact the Company Secretary at
phone: (021) 3840 0000 and email address mansoor@[Link] and/or FAMCO
Associates (Private) Limited at phone: (021) 3438 0101-5 and email address:
[Link]@[Link]

(v) Corporate shareholders having CDC accounts are required to have their National Tax
Number (NTN) updated with their respective participants, whereas corporate physical
shareholders should send a copy of their NTN certificate to the Company or FAMCO
Associates (Private) Limited. Shareholders while sending NTN or NTN certificates, as the
case may be, must quote Company name and their respective folio numbers. Without the
NTN company would not be in a position to check filer status on the ATL and hence higher
tax of 30% may be applied in such cases.

10. Non-resident individual shareholders shall submit declaration or undertaking with copy of valid
passport under definition contained in Section 82 of the Income Tax Ordinance, 2001 for
determination of residential status for the purposes of tax deduction on dividend to the Shares
Registrar M/s. FAMCO Associates (Private) Limited at 8-F, near Hotel Faran, Nursery Block-6,
P.E.C.H.S, Shahrah-e-Faisal, Karachi or email at [Link]@[Link] at the latest by
September 19, 2022. The copy of declaration form can be downloaded from Shares Registrar
website: [Link] share-registration-services/.

11. To claim exemption from compulsory deduction of Zakat, shareholders are requested to submit a
notarized copy of Zakat Declaration Form “CZ-50” on NJSP of Rs. 50.00 to the Shares Registrar,
before the first day of book closure.

12. The Securities and Exchange Commission of Pakistan has issued a letter No.
CSD/ED/Misc./2016-639-640 dated March 26, 2021 addressed to all listed companies drawing
attention towards the provision of Section 72 of the Companies Act, 2017 (Act) which requires all
companies to replace shares issued by them in physical form with shares to be issued in the
Book-Entry-Form within a period not exceeding four years from the date of the promulgation of the
Act.

In order to ensure full compliance with the provisions of the aforesaid Section 72 and to benefit from
the facility of holding shares in the Book-Entry-Form, the shareholders who still hold shares in
physical form are requested to convert their shares in the Book-Entry-Form.

13. An updated list for unclaimed dividend/shares of the Company is available on the Company’s
website [Link]. These are unclaimed dividend/shares which have remained
unclaimed or unpaid for a period of three years from the date these have become due and payable.

Claims can be lodged by shareholders on Claim Forms as are available on the Company’s website.
Claims Forms must be submitted to the Company’s Shares Registrar for receipt of dividend/shares.

14. Members can exercise their right to demand a poll subject to meeting requirements of Section 143
to Section 145 of the Companies Act, 2017 and applicable clauses of Companies (Postal Ballot)
Regulations, 2018.

15. Form of Proxy is enclosed.

12
 Annual Report 2021 – 22

STATEMENT OF MATERIAL FACTS CONCERNING SPECIAL BUSINESS PURSUANT TO SECTION 134

OF THE COMPANIES ACT, 2017

The statement sets out the material facts concerning the Special Business given in agenda item No.4 of the
Notice will be considered to be passed by the members. The purpose of the Statement is to set forth the
material facts concerning such Special Business.

Agenda Item No.4 of the Notice – issue of Bonus Shares to be passed as an Ordinary Resolution

The Board of Directors has recommended to the members of the Company to declare final dividend in cash
@ 280% and by way of issue of fully paid bonus shares @ 15% for the year ended June 30, 2022. 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.109,193,380 out of the profit for the year ended June 30, 2022 be capitalized and
applied in making payment in full of 10,919,338 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 19, 2022 @ 15% i.e. in the
proportion of Three shares for every Twenty existing shares held by the members and that
such new shares shall rank paripassu 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, 2022;

ii) in the event of any member holding less than Twenty shares or a number of shares which is
not an exact multiple of Twenty, the fractional entitlements of shares of such members shall
be consolidated into whole new shares and the Directors of the Company be and are hereby
authorized to arrange sale of the shares constituted thereby in such manner as they may
think fit and to pay the proceeds of the sale to such of the members according to their
entitlement;

iii) for the purpose of giving effect to the above, the Directors be and are hereby authorized to
take all necessary steps in the matter and to settle any question or difficulties that may arise
in regard to the distribution of the said new shares as they think fit.”

The Directors are interested in this business only to the extent of their entitlement of dividend and bonus
shares as ordinary shareholders.

13
Financial Summary
For the year ended June 30, 2022

Net Turnover (PKR MM) Gross Profit (PKR MM)

PKR 70,000 PKR 20,000
62,330
PKR 60,000 16,042
14,847
50,563
PKR 50,000 PKR 15,000 12,617
43,530
PKR 40,000 36,961 10,001 10,421 10,471
28,346 31,272 PKR 10,000
PKR 30,000
PKR 20,000 PKR 5,000
PKR 10,000
PKR 0 PKR 0
2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022

Opera�ng Profit (PKR MM) Net Profit (PKR MM)

PKR 10,000 8,865 PKR 7,000
8,081 5,677 5,872
PKR 6,000
PKR 8,000 6,808 4,865
PKR 5,000
PKR 6,000 4,858 4,697 5,003 PKR 4,000 3,256 3,257 3,511

PKR 4,000 PKR 3,000

PKR 2,000
PKR 2,000
PKR 1,000
PKR 0 PKR 0
2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022

Cash Dividends Paid Per Share Dividend Payout

(Excluding Bonus Shares) (Including Bonus Share)
PKR 55 52.50 80%
49.00 67%
46.00
PKR 45 60%
60% 54% 56% 56%
36.50 52%
35.00 35.00
PKR 35
40%
PKR 25

PKR 15 20%

PKR 5 0%
2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022

Total Assets Employed (PKR MM) Basic / Dilu�ve Earnings Per Share
PKR 30,000 PKR 100
24,396 77.98 80.66
PKR 25,000 21,427 PKR 80 66.83
PKR 20,000 18,107
15,209 PKR 60 48.23
PKR 15,000 13,554 44.73 44.74
12,022
PKR 40
PKR 10,000
PKR 5,000 PKR 20

PKR 0 PKR 0
2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022

14
 Annual Report 2021 – 22

6 Years at a Glance
2021-2022 2020-2021 2019-2020 2018-2019 2017-2018 2016-2017
------------------------------------(Rupees in '000)------------------------------------
STATEMENT OF FINANCIAL POSITION

Property, plant and equipment 7,623,422 6,714,324 5,102,949 4,291,939 3,644,294 2,731,203
Intangible assets 3,505 8,662 13,675 14,435 24,818 23,157
Long term loans, security deposits &
staff retirement benefits 98,965 110,860 54,303 60,775 60,299 62,181
7,725,892 6,833,846 5,170,927 4,367,149 3,729,411 2,816,541
Current assets 25,279,273 21,304,813 17,337,687 14,628,286 13,020,557 12,133,883
Current liabilities 8,609,153 6,711,793 4,401,425 3,786,065 3,196,303 2,928,701
16,670,120 14,593,020 12,936,262 10,842,221 9,824,254 9,205,182
TOTAL ASSETS EMPLOYED 24,396,012 21,426,866 18,107,189 15,209,370 13,553,665 12,021,723

REPRESENTED BY

Equity
Paid-up capital 727,956 633,005 575,459 575,459 479,549 479,549
Reserves 22,022,222 19,548,297 16,863,937 14,444,822 12,937,587 11,358,955
Remeasurement on post retirement benefits obligation (201,936) (168,676) (188,474) (147,819) (112,888) (88,621)
Surplus / (Deficit) on revaluation of investments - - 259 (4,217) 5 4,043
22,548,242 20,012,626 17,251,181 14,868,245 13,304,253 11,753,926

Non-Current liabilities
Long term loans, deposits, deferred tax,
leases and deferred liability 1,847,770 1,414,240 856,008 341,125 249,412 267,797
1,847,770 1,414,240 856,008 341,125 249,412 267,797
24,396,012 21,426,866 18,107,189 15,209,370 13,553,665 12,021,723

STATEMENT OF PROFIT OR LOSS

Turnover 82,398,332 67,567,680 57,870,219 48,718,781 41,421,811 37,498,961

Sales tax (12,968,034) (10,714,230) (9,175,788) (7,718,475) (6,568,260) (5,954,616)

Trade and other discounts (7,100,072) (6,290,428) (5,164,109) (4,039,264) (3,581,833) (3,198,848)
(20,068,106) (17,004,658) (14,339,897) (11,757,739) (10,150,093) (9,153,464)
Net turnover 62,330,226 50,563,022 43,530,322 36,961,042 31,271,718 28,345,497

Cost of sales (46,288,481) (35,715,642) (30,912,914) (26,490,454) (20,850,970) (18,344,900)

Gross profit 16,041,745 14,847,380 12,617,408 10,470,588 10,420,748 10,000,597

Administrative, selling and distribution cost (7,551,757) (6,978,509) (6,085,372) (5,652,407) (5,780,419) (5,204,934)
Other expenses (724,675) (643,807) (724,664) (428,655) (410,310) (397,171)
Other income 1,099,519 855,784 1,000,208 613,160 467,233 459,509
(7,176,913) (6,766,532) (5,809,828) (5,467,902) (5,723,496) (5,142,596)
Profit from operations 8,864,832 8,080,848 6,807,580 5,002,686 4,697,252 4,858,001
Finance cost and bank charges (142,810) (118,175) (95,813) (38,496) (29,240) (24,534)
Profit before taxation 8,722,022 7,962,673 6,711,767 4,964,190 4,668,012 4,833,467
Taxation (2,850,442) (2,285,924) (1,846,951) (1,453,387) (1,410,957) (1,577,045)
Profit after taxation 5,871,580 5,676,749 4,864,816 3,510,803 3,257,055 3,256,422

STATEMENT OF CASHFLOWS

Cash flows from operating activities 1,913,685 7,691,814 4,570,686 2,817,537 2,179,117 3,313,511
Cash flows from investing activities (568,929) (6,123,234) 288,743 (2,652,153) (627,746) 1,457,761
Cash flows from financing activities (3,174,212) (1,987,651) (2,189,894) (1,899,123) (1,675,472) (2,154,359)
Net (decrease)/ increase in cash and cash equivalents (1,829,456) (419,071) 2,669,535 (1,733,739) (124,101) 2,616,913
Cash and cash equivalents at the beginning of the year 4,807,764 5,226,835 2,557,300 4,291,039 4,415,140 1,798,227
Cash and cash equivalents at the end of the year 2,978,308 4,807,764 5,226,835 2,557,300 4,291,039 4,415,140

15
Key Operating and Financial Data & Ratios
2021-2022 2020-2021 2019- 2020 2018- 2019 2017- 2018 2016- 2017
RATE OF RETURN

Pre tax return on equity % 39 40 39 33 35 41

Post tax return on equity % 26 28 28 24 24 28
Return on average capital employed % 39 41 41 35 37 42
Interest cover times 62 68 71 130 161 198

PROFITABILITY

Gross profit margin % 26 29 29 28 33 35

Operating profit to sales % 14 16 16 14 15 17
Pre tax profit to sales % 14 16 15 13 15 17
Post tax profit to sales % 9 11 11 9 10 11

LIQUIDITY

Current Ratio ratio 2.9:1 3.2:1 3.9:1 3.9:1 4.1:1 4.1:1

Quick ratio ratio 1.4:1 2.1:1 2.5:1 2.5:1 2.8:1 3.1:1

FINANCIAL GEARING

Debt equity ratio ratio 8:100 7:100 5:100 2:100 2:100 2:100
Gearing ratio times 0.46 0.41 0.30 0.28 0.26 0.27

CAPITAL EFFICIENCY

Debtors turnover days 8 8 7 7 9 10

Average inventory turnover days 80 69 66 63 63 59
Total assets turnover times 2 2 2 2 2 2
Property, plant and equipment turnover times 8 8 9 9 9 10

INVESTMENT MEASURES PER

ORDINARY SHARE

Earnings per share Rs 80.66 77.98 66.83 48.23 44.74 44.73

Dividend cash (including proposed) Rs 52.50 49.00 46.00 36.50 35.00 35.00
Dividend payout (including bonus) % 67 56 56 60 54 52
Dividend yield % 2 2 2 2 1 2
Price earning ratio times 28 32 34 43 70 51
Break-up value Rs 310 275 237 204 183 161
Market value - low Rs 1,900 2,150 1,663 1,900 2,105 1,450
Market value - high Rs 2,600 3,745 2,600 3,288 3,598 2,401
Market value - year end Rs 2,248 2,500 2,240 2,075 3,149 2,302
Market capitalization Rs in Mn 163,644 181,989 163,062 151,051 229,233 167,575
Dividend - Cash % 525 490 460 365 350 350
Dividend - Bonus shares % 15 15 10 0 20 0

16
 Annual Report 2021 – 22

Statement of Value Added

For the year ended June 30, 2022

2022 2021
Wealth Generated (Rupees in '000)

Total revenue net of discount and allowances 76,397,779 62,133,036

Bought-in-material and services 48,029,435 37,835,172

28,368,344 24,297,864

Wealth Distributed

To Employees
Salaries, benefits and other costs 3,345,805 2,810,696

To Government
Income tax, sales tax, custom and regulatory duty, WPPF, 18,143,718 14,836,408
WWF, SIDC and stamp duty

To Providers of Capital
Dividend to shareholders 3,930,961 3,196,676
Mark up/interest expenses on borrowed funds 142,810 118,175

Retained for Reinvestment and Growth

Depreciation and Retained Profits 2,805,050 3,335,909

28,368,344 24,297,864

Depreciation
2022 2021
Depreciation To
and Retained
To and Retained Employees,
Profits, 9.89%
Employees, Profits, 13.73% 11.57%
11.79%
To Providers To Providers
of Capital, of Capital,
14.36% 13.64%

To To
Government, Government,
63.96% 61.06%

17
 Review Report by the Chairman
As required under the Listed Companies (Code of Corporate Governance) Regulations, 2019 an
annual evaluation of the Board of Directors of Colgate-Palmolive (Pakistan) Limited is carried out.
The purpose of this evaluation is to ensure that the Board’s overall performance and effectiveness
is measured and benchmarked against expectations in the context of objectives set for the
Company.

For the financial year ended June 30, 2022, the Board’s overall performance and effectiveness has
been assessed as Satisfactory. Improvements are an ongoing process leading to action plans. The
above overall assessment is based on an evaluation of integral components, including vision,
mission and values; engagement in strategic planning; formulation of policies; monitoring the
organization’s business activities; monitor financial resource management; effective fiscal
oversight; equitable treatment of all employees and efficiency in carrying out the Board’s
responsibility.

The Board of Directors of your Company received agendas and supporting written material
including follow up materials in sufficient time prior to the board and its committee meetings. The
board meets frequently enough to adequately discharge its responsibilities. The non-executive and
independent directors are equally involved in important decisions.

Iqbal Ali Lakhani

Dated: July 29, 2022 Chairman

18
 Annual Report 2021 – 22

Director’s Report
The Directors of your Company are pleased to present the Annual Report with the audited financial
statements of the Company for the year ended June 30, 2022.

Financial Performance at a Glance

A brief financial analysis is presented as under:

2021 - 2022 2020 - 2021 Increase /

Operating Results
(Decrease)
Amount in PKR million
Gross Revenue 82,398 67,568 21.95%
Net Revenue 62,330 50,563 23.27%
Gross Profit 16,042 14,847 8.05%
Gross Profit % 25.74% 29.36% (362 bps)
Selling & Distribution Costs 6,849 6,332 8.16%
Administrative Expenses 703 646 8.82%
Operating Profit 8,865 8,081 9.70%
Profit After Tax 5,872 5,677 3.43%
Earnings per Share-Rupees 80.66 77.98 3.43%

Financial Highlights

The business environment remained challenging during the year due to macroeconomic factors,
rupee depreciation against the US dollar and rising commodity prices. Availability of key raw
materials also remained a key challenge for the business. However, your Company was able to
navigate through these challenges by continuing the growth momentum achieving a net revenue
growth of 23.27%. Gross profit margin remained under pressure, amid currency depreciation and
rising commodity and energy costs, resulting in a drop of 362 bps despite adjustments in selling
prices across all categories.

Selling and administration costs increased by 8.16% and 8.82% respectively by applying strict cost
controls and bringing efficiencies in the operations.

19
 Appropriation of Profit
2021 – 2022
PKR In ‘000’
Profit after tax 5,871,580
Un-appropriated profit brought forward 678
Profit available for appropriation 5,872,258

Appropriations:
Proposed Final Cash Dividend @ 280% i.e., PKR 28 per share 2,038,276
(2021: @ 240% i.e., PKR 24 per share)
Proposed bonus shares @ 15% i.e., 3 shares for every 20 shares held 109,193
(2021: @ 15% i.e., 3 shares for every 20 shares held)
Interim Cash Dividend @ 245% i.e., PKR 24.5 per share 1,783,492
(2021: @ 250% i.e., PKR 25 per share)
Transfer to General Reserve 1,941,000
Un-appropriated profit carried forward 297

Principal Risks and Uncertainties

The Company is exposed to certain inherent risks and uncertainties. However, we consider the
following as key risks:

• Adverse movement in foreign exchange rates and commodity prices;

• Data security and data privacy; and
• Market disruption due to changes in tax laws and regulations.

The Company works with internal and external stakeholders to mitigate the likely impacts of
aforesaid risks.

Business Performance Highlights

Overall, it was a challenging year for the toothpaste business due to unprecedented increase in raw
material cost. The Company remained focused on its consumption building and penetration driving
initiatives that include regimen packs, reaching out to school-going children through its Bright
Smiles Bright Futures program and efforts to improve its distribution.

Home care category remained highly competitive with all key players increasing investment to gain
market share. Despite immense pressure on margins, advertising and trade spends have increased
during the year. Unorganized sector continues to pose a challenge especially in semi urban and
rural areas with high trade spends and low retail prices.

Lemon Max continues to maintain its leadership position in dish washing products; however, the
unorganized sector poses a serious challenge in semi-urban and rural areas.

20
 Annual Report 2021 – 22

Palmolive bar soaps and shampoo have sustained the double-digit growth through the year. They
maintained presence on media & in-store to deliver growth consistently. Overall, the portfolio
remained relevant to beauty as well as hygiene consumers needs through its liquid handwash and
Protex anti-bacterial range.

Health, Safety and Environment

Colgate continues its commitment to act responsibly to protect people and the environment,
ensuring health and safety of our teams, building a culture of inclusivity and creating meaningful
opportunities for people to succeed the Colgate Palmolive.

Colgate is deeply committed to environment stewardship, in the form of mitigating climate change,
safeguarding water wastages, and sourcing responsibly and ethically. The Water Stewardship
Program is potentially contributing to water saving of approximately 500,000 gallons a month.

Colgate continues to improve energy efficiencies across its manufacturing operations through
initiating energy saving and renewable energy projects. During the last four years, the company has
potentially reduced 325,000 kgs of carbon emission on monthly basis.

In response to the Covid Pandemic, the Company has responsibly acted to protect the health of our
people. Our teams are fully inoculated in line with the benchmark health practices and our
operations have adopted all the precautionary measures to avoid Covid infection in the workplace.

Corporate Social Responsibility

Colgate celebrated young artists again this year with its “My Bright Smiles” Global Art Contest 2022.
The contest helped raised awareness for oral hygiene through art and gave children between the
ages of 6-9 years the chance to express their creativity.

This year, 67,654 artworks were received from all over the country through schools and online
submissions. Like every year, a young artist from Pakistan received the honor of being featured in
the Colgate ‘My Bright Smiles’ Global Calendar through this contest.

The Company also continued to support social welfare projects and made donations amounting to
PKR 20.75 million.

Future Outlook

The post-pandemic recovery of the global economy has been severely jolted by the ongoing
Russia–Ukraine conflict. Consequently, oil prices in the international commodity markets have
soared to an all-time high.

Political instability and uncertainty, trade deficit and depletion of foreign exchange reserves, are all
leading to significant pressure on the PKR against the US dollar.

21
 Margin protection remains a serious challenge for the business. Rising inflation has affected the
disposable income of the masses and their spending is expected to remain under check. Given all
these challenges your Company remains focused on minimizing the negative impacts of the same,
serving its stakeholders by delivering value; strengthening relationships with customers and
suppliers whilst also leveraging its diversified product portfolio to keep pursuing its profitable
growth aspirations.

Internal Financial Controls

The Directors are aware of their responsibility with respect to internal financial controls. Through
discussions with management and auditors (both internal and external), they confirm that adequate
controls have been implemented by the Company.

Financial & Corporate Reporting Framework

In compliance with the provisions of the listing regulations of the Pakistan Stock Exchange, the
Board members are pleased to place the following statements on record:

• The financial statements prepared by the management of the Company present its state of
affairs fairly, the results of its operations, cash flows and changes in equity.
• The Company maintains proper books of accounts.
• Appropriate accounting policies have been consistently applied in preparation of financial
statements and accounting estimates are based on reasonable and prudent judgment.
• International Financial Reporting Standards, as applicable in Pakistan are followed in
preparation of financial statements.
• The system of internal control is sound in design and has been effectively monitored and
implemented.
• There are no doubts on the Company’s ability to continue as a going concern.
• There has been no material departure from the best practices of corporate governance, as
detailed in the listing regulations.
• Summary of key operational and financial data for the last six years is annexed in this annual
report.
• Information about taxes and levies is given in the notes to and forming part of financial
statements.
• The valuation of investment made by the staff retirement funds based on their respective
accounts is as follows:
2021 – 2022
PKR In ‘000’
CPPL Staff Provident Fund 729,083
CPPL Staff Gratuity Fund 776,540

22
 Annual Report 2021 – 22

• The Board held four (4) meetings during the year. Attendance by each director was as
follows:

Directors Name Attendance

Mr. Iqbal Ali Lakhani 4
Mr. Zulfiqar Ali Lakhani 4
Mr. Amin Mohammed Lakhani 4
Mr. Peter John Graylin - Nominee of CP – USA 4
Ms. Xuan Dai – Nominee of CP – USA 4
Ms. Aliya Saeeda Khan 4
Mr. Kamran Yousuf Mirza 4
Mr. Shahid Ali Bukhari 4

• The Audit Committee held four (4) meetings during the year. Attendance by each member
was as follows:

Members Name Attendance

Ms. Aliya Saeeda Khan 4
Mr. Iqbal Ali Lakhani 4
Mr. Amin Mohammed Lakhani 4
Mr. Kamran Yousuf Mirza 4

• The HR Committee held one (1) meeting during the year. Attendance by each member was
as follows:

Members Name Attendance

Mr. Kamran Yousuf Mirza 1
Ms. Aliya Saeeda Khan 1
Mr. Iqbal Ali Lakhani -
Mr. Zulfiqar Ali Lakhani 1

Leave of absence was granted to the member who could not attend the meeting.

Composition of Board

The board consists of 6 male and 2 female directors with following composition:

Independent directors (including 1 female director) 3

Other non-executive directors 4
Executive director 1
Total number of directors 8

Remuneration Policy of Non-Executive Directors

The fee of the Non-Executive and Independent Directors for attending the Board and Committee
meetings of the Company is determined by the Board from time to time.

23
 Remuneration Package of Chief Executive and Directors

Remuneration package of Chief Executive and other directors is disclosed in note 38 to the financial
statements.

Auditors

The Auditors, Messrs. A. F. Ferguson & Co., Chartered Accountants, retire at the conclusion of the
44th Annual General Meeting. Being eligible, they have offered themselves for re-appointment and the
Board’s Audit Committee has also recommended their re-appointment which has been endorsed by
the Board.

Pattern of Shareholding

A statement showing pattern of shareholdings of the Company and additional information as at June
30, 2022 is included in the report.

The Board has determined threshold in respect of trading of Company’s shares by executives and
employees who are drawing annual basic salary of PKR 1.5 million or more.

Subsequent Events

No material changes and commitments affecting the financial position of the Company have
occurred between the end of the financial year and the date of this report.

Acknowledgement

We would like to extend our sincere gratitude to our consumers for their trust in our brands. We are
thankful to our bankers, shareholders, customers, distributors and supply chain partners for their
continued support. We also appreciate our employees for their relentless dedication and immense
contribution to the Company.

On behalf of Board of Directors

Iqbal Ali Lakhani Zulfiqar Ali Lakhani

Chairman Chief Executive

Karachi: July 29, 2022

24
 Annual Report 2021 – 22

Statement of Compliance with Listed Companies

(Code of Corporate Governance) Regulations, 2019
For the year ended June 30, 2022

The Company has complied with the requirements of Listed Companies (Code of Corporate Governance)
Regulations, 2019 (the Regulations) in the following manner:

1. The total number of directors are eight as per the following:

a. Male 6
b. Female 2

2. The composition of the Board is as follows:

Independent Directors Ms. Aliya Saeeda Khan

Mr. Kamran Y. Mirza
Mr. Syed Shahid Ali Bukhari
Non-executive Directors Mr. Iqbal Ali Lakhani - Chairman
Mr. Amin Mohammed Lakhani
Mr. Peter John Graylin
Ms. Xuan Dai
Executive Director Mr. Zulfiqar Ali Lakhani
Female Directors Ms. Aliya Saeeda Khan
Ms. Xuan Dai

3. The Directors have confirmed that none of them is serving as a Director on more than seven listed
companies, including this Company.

4. The Company has prepared a Code of Conduct and has ensured that appropriate steps have been
taken to disseminate it throughout the Company along with its supporting policies and procedures.

5. The board has developed a vision / mission statement, overall corporate strategy and significant
policies of the Company. The Board has ensured that complete record of particulars of the significant
policies along with their date of approval or updating is maintained by the Company.

6. All the powers of the Board have been duly exercised and decisions on relevant matters have been
taken by the Board / shareholders as empowered by the relevant provisions of the Act and these
Regulations.

7. The meetings of the Board were presided over by the Chairman and, in his absence, by a director
elected by the Board for this purpose. The Board has complied with the requirements of the Compa-
nies Act, 2017 and the Regulations with respect to frequency, recording and circulating minutes of
meetings of the Board.

8. The Board have a formal policy and transparent procedures for remuneration of directors in accord-
ance with the Act and these Regulations.

9. All the Directors of the Company have completed or are exempted from the requirement of Directors’
Training program. However, the Company endeavors to apply to Securities and Exchange Commis-
sion of Pakistan for approval of Directors’ Training Certificate where such trainings have been attained
by Directors from foreign institutions.

25
10. The board has approved appointment of Chief Financial Officer and Head of Internal Audit, including
their remuneration and terms and conditions of employment and complied with relevant requirements
of the Regulations. Mr. Mansoor Ahmed was assigned the responsibilities of Company Secretary of
the Company in addition to his responsibilities in other group companies.

11. Chief Financial Officer and Chief Executive Officer duly endorsed the financial statements before
approval of the Board.

12. The Board has formed committees comprising of members given below:

Audit Committee Ms. Aliya Saeeda Khan – Chairperson

Mr. Iqbal Ali Lakhani – Member
Mr. Amin Mohammed Lakhani – Member
Mr. Kamran Y. Mirza – Member
HR and Remuneration Committee Mr. Kamran Y. Mirza – Chairman
Mr. Iqbal Ali Lakhani – Member
Mr. Zulfiqar Ali Lakhani – Member
Ms. Aliya Saeeda Khan – Member

13. The terms of reference of the aforesaid committees have been formed, documented and advised to
the committee for compliance.

14. The frequency of meetings of the committees were as per following:

a. Audit Committee 4 quarterly meetings

b. HR and Remuneration Committee 1 annual meeting

15. The board has outsourced the internal audit function of the Company to a firm of Chartered Account-
ants, who are considered suitably qualified and experienced for the purpose and are conversant with
the policies and procedures of the Company.

16. The statutory auditors of the Company have confirmed that they have been given a satisfactory rating
under the Quality Control Review program of the Institute of Chartered Accountants of Pakistan and
registered with Audit Oversight Board of Pakistan, that they and all their partners are in compliance
with International Federation of Accountants (IFAC) guidelines on code of ethics as adopted by the
Institute of Chartered Accountants of Pakistan and they and the partners of the firm involved in the
audit are not a close relative (spouse, parent, dependent and non-dependent children) of the chief
executive officer, chief financial officer, head of internal audit, company secretary or director of the
Company.

17. The statutory auditors or the persons associated with them have not been appointed to provide other
services except in accordance with the Act, these regulations or any other regulatory requirement
and the auditors have confirmed that they have observed IFAC guidelines in this regard.

18. We confirm that all other requirements of Regulations 3,6,7,8,27,32,33 and 36 of the Regulations have
been complied with.

26
 Annual Report 2021 – 22

19. Explanation for non-compliance with requirements, other than regulations 3,6,7,8,27,32,33 and 36 is
as follows:

S. No. Non-Mandatory Requirement Reg. No. Explanation

1. The Board may constitute a separate commit- 29(1) Currently, the board has not
tee, designated as the nomination committee, constituted a separate Nomina-
of such number and class of directors, as it tion Committee and the
may deem appropriate in its circumstances. function are being performed
by the Board.
2. The Board may constitute the risk management 30(1) Currently, the board has not
committee, of such number and class of constituted a separate Risk
directors, as it may deem appropriate in its Management Committee and
circumstances, to carry out a review of the function are being
effectiveness of risk management procedures performed by the Board.
and present a report to the Board.

Iqbal Ali Lakhani Zulfiqar Ali Lakhani

Chairman Chief Executive

Karachi: July 29, 2022

27
 Independent Auditor’s Review Report
To the members of Colgate-Palmolive (Pakistan) Limited
Review Report on the Statement of Compliance Contained in Listed Companies (Code of Cor-
porate Governance) Regulations, 2019

We have reviewed the enclosed Statement of Compliance with the Listed Companies (Code of
Corporate Governance) Regulations, 2019 (the Regulations) prepared by the Board of Directors of
Colgate-Palmolive (Pakistan) Limited for the year ended June 30, 2022 in accordance with the
requirements of regulation 36 of the Regulations.

The responsibility for compliance with the Regulations is that of the Board of Directors of the Com-
pany. Our responsibility is to review whether the Statement of Compliance reflects the status of the
Company's compliance with the provisions of the Regulations and report if it does not and to high-
light any non-compliance with the requirements of the Regulations. A review is limited primarily to
inquiries of the Company's personnel and review of various documents prepared by the Company
to comply with the Regulations.

As a part of our audit of the financial statements we are required to obtain an understanding of the
accounting and internal control systems sufficient to plan the audit and develop an effective audit
approach. We are not required to consider whether the Board of Directors' statement on internal
control covers all risks and controls or to form an opinion on the effectiveness of such internal
controls, the Company's corporate governance procedures and risks.

The Regulations require the Company to place before the Audit Committee, and upon recommenda-
tion of the Audit Committee, place before the Board of Directors for their review and approval, its
related party transactions. We are only required and have ensured compliance of this requirement
to the extent of the approval of the related party transactions by the Board of Directors upon recom-
mendation of the Audit Committee.

Based on our review, nothing has come to our attention which causes us to believe that the State-
ment of Compliance does not appropriately reflect the Company's compliance, in all material
respects, with the requirements contained in the Regulations as applicable to the Company for the
year ended June 30, 2022.

A. F. Ferguson & Co.,

Chartered Accountants
Karachi,
August 5, 2022

UDIN: CR2022100598hx6mzFaN

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

KARACHI LAHORE ISLAMABAD

28
 Annual Report 2021 – 22

Independent Auditor’s Report

To the members of Colgate-Palmolive (Pakistan) Limited
Report on the Audit of the Financial Statements

Opinion

We have audited the annexed financial statements of Colgate-Palmolive (Pakistan) Limited (the
Company), which comprise the statement of financial position as at June 30, 2022, and the state-
ment of profit or loss and other comprehensive income, the statement of changes in equity, the
statement of cash flows for the year then ended, and notes to the financial statements, including a
summary of significant accounting policies and other explanatory information, and we state that we
have obtained all the information and explanations which, to the best of our knowledge and belief,
were necessary for the purposes of the audit.

In our opinion and to the best of our information and according to the explanations given to us, the
statement of financial position, statement of profit or loss and other comprehensive income, the
statement of changes in equity and the statement of cash flows together with the notes forming part
thereof conform with the accounting and reporting standards as applicable in Pakistan and give the
information required by the Companies Act, 2017 (XIX of 2017), in the manner so required and
respectively give a true and fair view of the state of the Company's affairs as at June 30, 2022 and
of the profit and other comprehensive income, the changes in equity and its cash flows for the year
then ended.

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs) as applica-
ble in Pakistan. Our responsibilities under those standards are further described in the Auditor’s
Responsibilities for the Audit of the Financial Statements section of our report. We are independent
of the Company in accordance with the International Ethics Standards Board for Accountants’ Code
of Ethics for Professional Accountants as adopted by the Institute of Chartered Accountants of Paki-
stan (the Code) and we have fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.

Key Audit Matter

Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial statements of the current period. These matters were addressed in the
context of our audit of the financial statements as a whole, and in forming our opinion thereon, and
we do not provide a separate opinion on these matters.

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

KARACHI LAHORE ISLAMABAD

29
 Following is the Key audit matter:

S. No. Key audit matter How the matter was addressed in our
audit
i. Revenue recognition

Refer note 2.15 to the annexed financial Our audit procedures included the
statements following:

The principal activity of the Company is the • Assessed the design, implementation and
manufacture and sale of detergents, personal operating effectiveness of the key internal
care and other related products. Revenue from controls involved in revenue recognition.
sale of goods is recognised as or when perfor-
mance obligations are satisfied by transferring • Understood and evaluated the accounting
control of promised goods to customer, and policy with respect to revenue recognition.
control is transferred at a point in time. Revenue
is measured at fair value of the consideration • Performed testing of revenue transactions
received or receivable, excluding discounts on a sample basis with underlying documenta-
and the payment is typically due on the satis- tion including dispatch documents and sales
faction of performance obligation. invoices.

We considered revenue recognition as a key • Tested on a sample basis, specific revenue

audit matter due to revenue being one of the transactions recorded before and after the
key performance indicators of the Company reporting date with underlying documentation
and due to the reason that revenue increased to assess whether revenue was recognised in
significantly as compared to last year. In addi- the correct period.
tion, revenue was also considered as an area of
significant audit risk as part of the audit • Performed audit procedures to analyse
process. variation in the price and quantity sold during
the year.

• Assessed the adequacy of disclosures

made in the financial statements related to
revenue.

30
 Annual Report 2021 – 22

Information Other than the Financial Statements and Auditor’s Report Thereon

Management is responsible for the other information. The other information comprises the
information included in the annual report, but does not include the financial statements and our
auditor’s report thereon.

Our opinion on the financial statements does not cover the other information and we do not express
any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with
the financial statements or our knowledge obtained in the audit or otherwise appears to be
materially misstated. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact. We have nothing to report
in this regard.

Responsibilities of Management and Board of Directors for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in
accordance with the accounting and reporting standards as applicable in Pakistan and the
requirements of Companies Act, 2017 (XIX of 2017) and for such internal control as management
determines is necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless management either intends to liquidate the
Company or to cease operations, or has no realistic alternative but to do so.

Board of directors are responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s
report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with ISAs as applicable in Pakistan will always
detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with ISAs as applicable in Pakistan, we exercise professional

judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of
not detecting a material misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations,
or the override of internal control.

31
 • Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Company’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of

accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concern basis of

accounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Company’s ability to
continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related disclosures in the financial
statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements, including
the disclosures, and whether the financial statements represent the underlying transactions
and events in a manner that achieves fair presentation.

We communicate with the board of directors regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies in inter-
nal control that we identify during our audit.

We also provide the board of directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, relat-
ed safeguards.

From the matters communicated with the board of directors, we determine those matters that were
of most significance in the audit of the financial statements of the current period and are therefore
the key audit matters. We describe these matters in our auditor’s report unless law or regulation
precludes public disclosure about the matter or when, in extremely rare circumstances, we deter-
mine that a matter should not be communicated in our report because the adverse consequences
of doing so would reasonably be expected to outweigh the public interest benefits of such commu-
nication.

Report on Other Legal and Regulatory Requirements

Based on our audit, we further report that in our opinion:

(a) proper books of account have been kept by the Company as required by the Companies Act,
2017 (XIX of 2017);

(b) the statement of financial position, the statement of profit or loss and other comprehensive
income, the statement of changes in equity and the statement of cash flows together with the
notes thereon have been drawn up in conformity with the Companies Act, 2017 (XIX of 2017)
and are in agreement with the books of account and returns;

32
 Annual Report 2021 – 22

(c) investments made, expenditure incurred and guarantees extended during the year were for
the purpose of the Company’s business; and

(d) zakat deductible at source under the Zakat and Ushr Ordinance, 1980 (XVIII of 1980), was
deducted by the company and deposited in the Central Zakat Fund established under section
7 of that Ordinance.

The engagement partner on the audit resulting in this independent auditor’s report is Farrukh
Rehman.

A. F. Ferguson & Co.,

Chartered Accountants
Karachi
Date: August 5, 2022

UDIN: AR202210059wO2rEzVub

33
 Statement of Financial Position
As at June 30, 2022
Note 2022 2021
(Rupees in '000)
ASSETS

NON-CURRENT ASSETS
Property, plant and equipment 4 7,623,422 6,714,324
Intangible assets 5 3,505 8,662
Long term loans 6 78,231 45,542
Long term security deposits 7 20,734 40,712
Staff retirement benefit 20 - 24,606
7,725,892 6,833,846
CURRENT ASSETS
Stores and spares 8 483,196 415,959
Stock in trade 9 13,067,927 7,251,915
Trade debts 10 1,407,106 1,155,879
Loans and advances 11 291,309 109,986
Trade deposits and short term prepayments 12 148,348 66,215
Other receivables 13 431,603 289,345
Accrued profit 4,760 12,158
Short term investments 14 6,543,716 9,881,592
Cash and bank balances 15 2,901,308 2,121,764
25,279,273 21,304,813
TOTAL ASSETS 33,005,165 28,138,659

EQUITY AND LIABILITIES

SHARE CAPITAL AND RESERVES

Issued, subscribed and paid-up share capital 16 727,956 633,005

Reserves 17 22,022,222 19,548,297
Remeasurement of post retirement benefits obligation (201,936) (168,676)
22,548,242 20,012,626
LIABILITIES

NON-CURRENT LIABILITIES

Deferred taxation 18 261,742 58,817

Long term deposits 19 63,134 122,672
Deferred liability 20 76,106 87,139
Long-term financing 21 747,668 631,297
Deferred grant 357,685 182,296
Lease liabilities 22 341,435 332,019
1,847,770 1,414,240
CURRENT LIABILITIES

Trade and other payables 23 7,989,140 5,921,549

Accrued mark up 8,322 4,978
Current portion of long-term financing 21 390,889 506,486
Current portion of lease liabilities 22 60,987 39,040
Short-term financing 24 42,334 -
Taxation - net 86,204 212,470
Unclaimed dividend 31,277 27,270
8,609,153 6,711,793
TOTAL LIABILITIES 10,456,923 8,126,033

CONTINGENCIES AND COMMITMENTS 25

TOTAL EQUITY AND LIABILITIES 33,005,165 28,138,659

The annexed notes 1 to 45 form an integral part of these financial statements.

Iqbal Ali Lakhani Zulfiqar Ali Lakhani Mudassir Iqbal

Chairman Chief Executive Chief Financial Officer
34
 Annual Report 2021 – 22

Statement of Profit or Loss and Other

Comprehensive Income
For the year ended June 30, 2022
Note 2022 2021
(Rupees in '000)
Turnover 82,398,332 67,567,680
Sales tax (12,968,034) (10,714,230)
Trade and other discounts (7,100,072) (6,290,428)
Net turnover 62,330,226 50,563,022

Cost of sales 26 (46,288,481) (35,715,642)

Gross profit 16,041,745 14,847,380

Selling and distribution cost 27 (6,848,512) (6,332,417)

Administrative expenses 28 (703,245) (646,092)
Other expenses 29 (724,675) (643,807)
Other income 30 1,099,519 855,784
Profit from operations 8,864,832 8,080,848

Finance cost and bank charges 31 (142,810) (118,175)

Profit before taxation 8,722,022 7,962,673

Taxation 32 (2,850,442) (2,285,924)

Profit after taxation 5,871,580 5,676,749

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

Item that may be reclassified subsequently to profit or loss

Gain / (loss) on investments categorised as
'fair value through other comprehensive income' - (345)
Impact of tax
- 86
- (259)

Item that will not be reclassified subsequently to profit or loss

Remeasurement of post retirement benefits obligation (49,642) 27,885
Impact of tax 16,382 (8,087)
(33,260) 19,798

(33,260) 19,539

Total comprehensive income for the year 5,838,320 5,696,288

--------------Rupees--------------
(Restated)
Earnings per share - basic and dilutive 33 80.66 77.98

The annexed notes 1 to 45 form an integral part of these financial statements.

Iqbal Ali Lakhani Zulfiqar Ali Lakhani Mudassir Iqbal

Chairman Chief Executive Chief Financial Officer
35
 Statement of Changes in Equity
For the year ended June 30, 2022
Reserves Remeasurem- Surplus /
Issued, Revenue reserves
subscribed Capital ent on post (deficit) on
and paid-up reserve - retirement revaluation Total Equity
General Unappropriated Sub total - benefits of
share share reserve profit reserves
capital premium obligation - investments-
net of tax net of tax
-------------------------------------------------------------(Rupees in '000)------------------------------------------------------------

Balance as at July 1, 2020 575,459 13,456 13,280,000 3,570,481 16,863,937 (188,474) 259 17,251,181

Transactions with owners

Final dividend for the year ended

June 30, 2020 at the rate of
Rs 23.5 per share - - - (1,352,330) (1,352,330) - - (1,352,330)

Bonus shares issued at the rate of one

share for every ten shares held 57,546 - - (57,546) (57,546) - - -

Interim dividend for the year ended

June 30, 2021 at the rate of
Rs 25 per share - - - (1,582,513) (1,582,513) - - (1,582,513)

Total transactions with owners 57,546 - - (2,992,389) (2,992,389) - - (2,934,843)

Comprehensive income for the year

Profit after taxation for the year ended

June 30, 2021 - - - 5,676,749 5,676,749 - - 5,676,749

Other comprehensive income / (loss) - - - - - 19,798 (259) 19,539

Total comprehensive income for the

year ended June 30, 2021 - - - 5,676,749 5,676,749 19,798 (259) 5,696,288

Transfer to general reserve - - 2,160,000 (2,160,000) - - - -

Balance as at June 30, 2021 633,005 13,456 15,440,000 4,094,841 19,548,297 (168,676) - 20,012,626

Transactions with owners

Final dividend for the year ended

June 30, 2021 at the rate of
Rs 24 per share - - - (1,519,212) (1,519,212) - - (1,519,212)

Bonus shares issued at the rate of three

shares for every twenty shares held 94,951 - - (94,951) (94,951) - - -

Interim dividend for the year ended

June 30, 2022 at the rate of
Rs 24.5 per share - - - (1,783,492) (1,783,492) - - (1,783,492)

Total transactions with owners 94,951 - - (3,397,655) (3,397,655) - - (3,302,704)

Comprehensive income for the year

Profit after taxation for the year ended

June 30, 2022 - - - 5,871,580 5,871,580 - - 5,871,580

Other comprehensive loss - - - - - (33,260) - (33,260)

Total comprehensive income for the

year ended June 30, 2022 - - - 5,871,580 5,871,580 (33,260) - 5,838,320

Transfer to general reserve - - 2,480,000 (2,480,000) - - - -

Balance as at June 30, 2022 727,956 13,456 17,920,000 4,088,766 22,022,222 (201,936) - 22,548,242

The annexed notes 1 to 45 form an integral part of these financial statements.

Iqbal Ali Lakhani Zulfiqar Ali Lakhani Mudassir Iqbal

Chairman Chief Executive Chief Financial Officer
36
 Annual Report 2021 – 22

Statement of Cash Flows

For the year ended June 30, 2022

Note 2022 2021

(Rupees in '000)
CASH FLOWS FROM OPERATING ACTIVITIES

Cash generated from operations 34 4,818,282 9,137,857

Finance cost paid (74,947) (54,053)
Taxes paid (2,757,401) (1,279,917)
Long term loans (32,689) (12,366)
Long term security deposits (assets) 19,978 (19,585)
Staff retirement gratuity paid - (90,181)
Long term deposits (59,538) 10,059
Net cash generated from operating activities 1,913,685 7,691,814

CASH FLOWS FROM INVESTING ACTIVITIES

Payments for property, plant and equipment (1,706,958) (2,429,559)

Purchase of intangible assets - (3,855)
Short term investments made during the year (24,293,845) (38,625,906)
Proceeds from sale of property, plant and equipment 57,062 51,598
Profit received on savings accounts 154,231 95,141
Profit received on treasury bills 51,534 111,618
Profit received on Sukuk bonds - 2,148
Profit received on Pakistan Investment Bonds 436 -
Profit received on term deposit receipts 37,560 74,923
Sale proceeds on disposal of short term investments 25,131,051 34,600,658
Net cash used in investing activities (568,929) (6,123,234)

CASH FLOWS FROM FINANCING ACTIVITIES

Long-term financing obtained 676,436 1,133,864

Payment of lease liabilities (94,012) (65,682)
Long - term financing repaid (500,273) (126,622)
Short-term financing obtained 42,334 -
Dividend paid (3,298,697) (2,929,211)
Net cash used in financing activities (3,174,212) (1,987,651)

Net decrease in cash and cash equivalents during the year (1,829,456) (419,071)

Cash and cash equivalents at beginning of the year 4,807,764 5,226,835

Cash and cash equivalents at end of the year 35 2,978,308 4,807,764

The annexed notes 1 to 45 form an integral part of these financial statements.

Iqbal Ali Lakhani Zulfiqar Ali Lakhani Mudassir Iqbal

Chairman Chief Executive Chief Financial Officer
37
Notes to and Forming Part of the
Financial Statements
For the year ended June 30, 2022
1. THE COMPANY AND ITS OPERATIONS

1.1 Colgate-Palmolive (Pakistan) Limited (the Company) was incorporated in Pakistan on

December 5, 1977 as a public limited company with the name of National Detergents Limit-
ed. 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 Pakistan Stock Exchange. The
registered office of the Company is situated at Lakson Square, Building No. 2, Sarwar Sha-
heed Road, Karachi, Pakistan.

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

1.2 During the year, the Company has made expansion in the plant capacity of its Personal
Care and Home Care product classes.

2. SIGNIFICANT ACCOUNTING INFORMATION AND POLICIES

2.1 Basis of preparation

2.1.1 Basis of measurement

These financial statements have been prepared under the historical cost convention unless
otherwise specifically stated.

2.1.2 Statement of compliance

These financial statements have been prepared in accordance with the accounting and
reporting standards as applicable in Pakistan. The accounting and reporting standards
applicable in Pakistan comprise of:

- International Financial Reporting Standards (IFRSs) issued by the International

Accounting Standards Board (IASB) as notified under the Companies Act, 2017; and

- Provisions of and directives issued under the Companies Act, 2017.

Where provisions of and directives issued under the Companies Act, 2017 differ from the
IFRSs, the provisions of and directives issued under the Companies Act, 2017 have been
followed.

2.1.3 Initial application of a standard, amendment or an interpretation to an existing standard

[Link] Amendments to published accounting and reporting standards which are effective for
the year ended June 30, 2022

There were certain amendments to accounting and reporting standards which became
effective for the Company for the current year. However, these are considered not to be
relevant or to have any significant impact on the Company’s financial reporting and, there-
fore, have not been disclosed in these financial statements.

[Link] Standard, amendments to published accounting and reporting standards and inter-
pretations that are not yet effective and have not been early adopted by the Company

38
 Annual Report 2021 – 22

There is a standard and certain other amendments to accounting and reporting standards
that are not yet effective and are considered either not to be relevant or to have any signifi-
cant impact on the Company’s financial statements and operations and, therefore, have not
been disclosed in these financial statements.

2.2 Property, plant and equipment

2.2.1 Operating fixed assets

Operating fixed assets are stated at cost less accumulated depreciation and accumulated
impairment losses, if any. Cost includes expenditures directly attributable to the acquisition
of the asset.

Assets having cost exceeding the minimum threshold as determined by the management
are capitalised. All other assets are charged to profit or loss in the year when acquired.

Consistent with prior year, depreciation is charged to income applying the straight line
method by applying rates (as stated in note 4.1.1). Depreciation on additions is charged
from the month in which the asset is put to use and on disposal upto the month of disposal.

No depreciation is charged if the asset's residual value exceeds its carrying amount.

Residual values and the useful lives are reviewed at each date of statement of financial posi-
tion and adjusted if expectations differ significantly from previous estimates.

Residual values are determined by the management as the amount it expects it would
receive currently for an item of property, plant and equipment if it was already of the age and
in the condition expected at the end of its useful life based on the prevailing market prices
of similar assets already at the end of their useful lives.

Useful lives are determined by the management based on the expected usage of assets,
physical wear and tear, technical and commercial obsolescence, legal and similar limits on
the use of the assets and other similar factors.

The carrying values of property, plant and equipment are reviewed at each reporting date
for indications that an asset may be impaired and carrying values may not be recovered. If
any such indication exists and where the carrying value exceeds the estimated recoverable
amount, the asset or cash generating unit is written down to its recoverable amount. The
recoverable amount of property, plant and equipment is the greater of fair value less cost to
sell and value in use.

Normal repairs and maintenance are charged to profit or loss as and when incurred. Major
renewals and improvements, if any, are capitalised, when it is probable that future economic
benefits will flow to the Company.

An item of property, plant and equipment is derecognised upon disposal or when no future
economic benefits are expected from its use or disposal. Gains and losses on disposals are
determined by comparing proceeds with carrying amount of the relevant assets. These are
included in profit or loss.

39
2.2.2 Capital work in progress

All expenditure connected with specific assets incurred during installation and construction
period are carried under capital work in progress. These are transferred to specific assets
as and when assets are available for use.

2.2.3 Right-of use assets

Right of use assets are initially measured at cost being the present value of lease payments,
initial direct costs, any lease payments made at or before the commencement of the lease
as reduced by any incentives received. These are subsequently measured at cost less
accumulated depreciation and accumulated impairment losses, if any.

Depreciation is charged on straight line basis over the shorter of the lease term or the useful
life of the asset. Where the ownership of the asset transfers to the Company at the end of
the lease term or if the cost of the asset reflects that the Company will exercise the purchase
option, depreciation is charged over the useful life of asset.

2.3 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. Cost of the
intangible asset (i.e. computer software) includes purchase cost and directly attributable
expenses incidental to bring the asset for its intended use.

Costs associated with maintaining computer software are recognised as an expense as and
when incurred.

Intangible assets are stated at cost less accumulated amortisation and accumulated
impairment losses, if any. Amortisation is charged over the estimated useful life of the
asset on a systematic basis applying the straight line method at the rate of 33.33%.

Useful lives of intangible operating assets are reviewed, at each date of statement of finan-
cial position and adjusted if the impact of amortisation is significant.

The carrying amount of the intangible is reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount may not be recoverable. An
impairment loss is recognised in the profit or loss for the amount by which the asset's carry-
ing amount exceeds its recoverable amount. Reversal of impairment losses are also recog-
nised in the profit or loss, however, it is restricted to the original cost of the asset.

2.4 Stores and spares

Stores and spares are valued at lower of cost using the moving average method and
estimated net realisable value. Items in transit are valued at cost accumulated upto the date
of statement of financial position. Provision for obsolete items, if any, is based on their condi-
tion as at the financial position date depending upon the management's judgement.

Loose tools are recognised as expense as and when purchased as their inventory is gener-
ally not significant.
40
 Annual Report 2021 – 22

Net realisable value specifies the estimated selling price in the ordinary course of business
less the estimated cost of completion and cost necessary to be incurred to make the sale.

2.5 Stock in trade

Stock in trade is valued at the lower of cost and estimated net realisable value. Cost is deter-
mined as follows:

Stages of stock in trade Basis of valuation

Raw and packing material Moving average cost

Raw and packing material in bonded Cost accumulated upto the date of statement
warehouse and in transit of financial position

Work in process and finished goods Cost of direct materials and appropriate
portion of production overheads

Trading goods Moving average cost

Net realisable value is determined on the basis of estimated selling price of the product in
the ordinary course of business less estimated costs of completion and the estimated costs
necessary to be incurred to make the sale.

2.6 Trade debts and other receivables

Trade debts and other receivables are recognised initially at the amount of consideration
that is unconditional, unless they contain significant financing component in which case
such are recognised at fair value. The Company holds the trade debts with the objective of
collecting the contractual cash flows and therefore measures the trade debts subsequently
at amortised cost using the effective interest method. Impairment of trade debts and other
receivables is described in note 2.18.1.

2.7 Lease liabilities

Lease liabilities are initially measured at the present value of the lease payments discounted
using the interest rate implicit in the lease. If the implicit rate cannot be readily determined,
the Company's incremental borrowing rate is used. Subsequently these are increased by
interest, reduced by lease payments and remeasured for lease modifications, if any.

Liabilities in respect of short term and low value leases are not recognised and payments
against such leases are recognised as expense in profit or loss.

2.8 Taxation

Current

Provision for current taxation is the amount computed on taxable income at the current rates
of taxation or alternative corporate tax computed on accounting income or minimum tax on
turnover, whichever is higher, and taxes paid / payable on final tax basis, after taking into
account tax credit available, if any. The charge for the current tax also includes adjustments
where necessary, relating to prior years which arise from the assessments made / finalised
during the year.
41
 Deferred

Deferred tax is recognised using the balance sheet liability method on all temporary differ-
ences between the carrying amount of the assets and liabilities and their tax bases.

Deferred tax liabilities are recognised for all major taxable temporary differences.

Deferred tax assets are recognised for all major deductible temporary differences to the
extent that it is probable that taxable profit will be available against which the deductible
temporary differences can be utilised.

The carrying amount of the deferred tax asset is reviewed at each date of statement of finan-
cial position 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 date of statement of
financial position and are recognised to the extent that it becomes probable that future taxa-
ble profit will allow deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rate that are expected to apply to
the year when the asset is utilised or the liability is settled, based on the tax rates that have
been enacted or substantially enacted at the financial position date.

Management periodically evaluates positions taken in tax returns with respect to situations
in which applicable tax regulation is subject to interpretation. It establishes provisions where
appropriate on the basis of amounts expected to be paid to the tax authorities.

2.9 Cash and cash equivalents

Cash and cash equivalents are carried in the statement of financial position at cost. For the
purposes of the statement of cash flows, cash and cash equivalents consist of cash and
bank balances, cheques in hand, deposits held at call with banks, other short term highly
liquid investments with original maturities of three months or less, running finance under
mark-up arrangements and short term loans which form an integral part of the Company's
cash management.

2.10 Borrowing costs

Borrowing costs relating to the acquisition, construction or production of a qualifying asset

are recognised as part of the cost of that asset. All other borrowing costs are recognised as
an expense in the period in which these are incurred.

2.11 Provisions

Provisions are recognised when the Company has a present legal or constructive obligation
as a result of past events, it is probable that an outflow of resources embodying economic
benefits will be required to settle the obligation and a reliable estimate can be made of the
amount of the obligation. Provisions are reviewed periodically and adjusted to reflect the
current best estimates.

42
 Annual Report 2021 – 22

2.12 Trade and other payables

Liabilities for trade and other payables are carried at their amortised cost, which is approxi-
mately fair value of the consideration to be paid in future for goods and services received,
whether or not billed to the Company.

2.13 Deferred Grant

Grants are not recognised until there is reasonable assurance that the Company will comply
with the conditions attaching to them and that the grant will be received.

The benefit of a long-term finance at a below-market rate of interest is treated as a deferred

grant, measured as the difference between proceeds received and the fair value of the loan
based on prevailing market interest rates.

Grants related to long-term finances are recognised in profit or loss on a systematic basis
over the periods in which the Company recognises as finance cost related to long-term
finances at market rate of interest.

2.14 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 recom-
mendations. Actuarial valuation is carried out using the projected unit credit method.

All actuarial gains and losses (i.e. remeasurements) are recognised in 'other comprehen-
sive income' as they occur.

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 employ-
ees, to the fund at the rate of 9 percent of the basic salaries of employees.

Compensated absences

The liability in respect of compensated absences of employees is accounted for in the

period in which the absences accrue. As the component of liability involved is not material,
the Company does not carry out actuarial valuation for the said liability.

2.15 Revenue recognition

- Revenue from sale of goods is recognised as or when performance obligations are

satisfied by transferring control of promised goods to customer, and control is trans-
ferred at a point in time.

Revenue is measured at fair value of the consideration received or receivable, exclud-

ing discounts and the payment is typically due on the satisfaction of performance
obligation.
43
 - Interest income is recognised on a time proportion basis on the principal amount
outstanding and at the applicable rate.

- Gains / (losses) arising on disposal of investments are included in income and are
recognised on the date when the transaction takes place.

- Unrealised gains / (losses) arising on revaluation of securities classified as 'fair value

through other comprehensive income' are included in other comprehensive income in
the period in which they arise.

- Unrealised gains / (losses) arising on revaluation of securities classified as 'fair value

through profit or loss' are included in profit or loss in the period in which they arise.

2.16 Foreign currency transactions

Transactions in foreign currencies are translated in Pakistan rupees (functional and pres-
entation 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 date of statement of financial position.
Foreign exchange gains and losses resulting from the settlement of such transactions and
from the translations of monetary assets and liabilities denominated in foreign currencies
are recognised in the profit or loss.

2.17 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 appro-
priations are approved.

2.18 Financial instruments

2.18.1 Financial assets

The Company classifies its financial assets at amortised cost, fair value through other com-
prehensive income or fair value through profit or loss on the basis of the Company’s busi-
ness model for managing the financial assets and the contractual cash flow characteristics
of the financial asset.

a) Financial assets at amortised cost

Financial assets at amortised cost are held within a business model whose objective
is to hold financial assets in order to collect contractual cash flows and the contractual
terms of the financial asset give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding. Interest
income from these financial assets, impairment losses, foreign exchange gains and
losses, and gain or loss arising on derecognition are recognised directly in profit or loss.

b) Financial assets at fair value through other comprehensive income

Financial assets at fair value through other comprehensive income are held within a
business model whose objective is achieved by both collecting contractual cash
flows and selling financial assets and the contractual terms of the financial asset give
44
 Annual Report 2021 – 22

rise on specified dates to cash flows that are solely payments of principal and interest
on the principal amount outstanding.

c) Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss are those financial assets which are
either designated in this category or not classified in any of the other categories. A
gain or loss on debt investment that is subsequently measured at fair value through
profit or loss is recognised in profit or loss in the period in which it arises.

Financial assets are initially measured at cost, which is the fair value of the consideration
given and received respectively. These financial assets and liabilities are subsequently
remeasured to fair value, amortised cost or cost as the case may be. Any gain or loss on the
recognition and de-recognition of the financial assets and liabilities is included in the profit
or loss for the period in which it arises.

Equity instrument financial assets / mutual funds are measured at fair value at and subse-
quent to initial recognition. Changes in fair value of these financial assets are normally
recognised in profit or loss. Dividends from such investments continue to be recognised in
profit or loss when the Company's right to receive payment is established. Where an elec-
tion is made to present fair value gains and losses on equity instruments in other compre-
hensive income there is no subsequent reclassification of fair value gains and losses to
profit or loss following the derecognition of the investment.

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. Assets or liabilities that are not contractual in nature and
that are created as a result of statutory requirements imposed by the Government are not
the financial instruments of the Company.

The Company assesses on a forward looking basis the expected credit losses associated
with its financial assets carried at amortised cost and fair value through other comprehen-
sive income. The impairment methodology applied depends on whether there has been a
significant increase in credit risk. For trade receivables, the Company applies the simplified
approach, which requires expected lifetime losses to be recognised from initial recognition
of the receivables. The Company recognises in profit or loss, as an impairment gain or loss,
the amount of expected credit losses (or reversal) that is required to adjust the loss allow-
ance at the reporting date.

2.18.2 Financial liabilities

All financial liabilities are recognised at the time when the Company becomes a party to the
contractual provisions of the instrument. Financial liabilities at amortised costs are initially
measured at fair value minus transaction costs. Financial liabilities at fair value through profit
or loss are initially recognised at fair value and transaction costs are expensed in the profit or loss.

Financial liabilities, other than those at fair value through profit or loss, are subsequently
measured at amortised cost using the effective yield method.

A financial liability is derecognised when the obligation under the liability is discharged,
cancelled or expired. Where an existing financial liability is replaced by another from the

45
 same lender on substantially different terms, or the terms of an existing liability are substan-
tially modified, such an exchange and modification is treated as a derecognition of the origi-
nal liability and the recognition of a new liability, and the difference in respective carrying
amounts is recognised in the profit or loss.

2.18.3 Off-setting of financial assets and financial liabilities

A financial asset and a financial liability is offset and the net amount is reported in the finan-
cial 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 simul-
taneously.

2.19 Contingent liabilities

Contingent liability is disclosed when:

- there is a possible obligation that arises from past events and whose existence will be
confirmed only by the occurrence or non occurrence of one or more uncertain future
events not wholly within the control of the Company; or

- there is present obligation that arises from past events but it is not probable that an
outflow of resources embodying economic benefits will be required to settle the
obligation or the amount of the obligation cannot be measured with sufficient reliability.

2.20 Contingent assets

Contingent assets are disclosed when there is a possible asset 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. Contingent
assets are not recognised until their realisation become virtually certain.

2.21 Segment reporting

Operating segments are reported in a manner consistent with the internal reports issued to
the chief operating decision-maker. The Chief Executive Officer has been identified as the
'chief operating decision-maker', who is responsible for allocating resources and assessing
performance of the operating segments.

3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

The preparation of financial statements in conformity with the accounting and reporting
standards requires the use of certain critical accounting estimates. It also requires manage-
ment to exercise its judgement in the process of applying the Company’s accounting
policies. Estimates and judgements are continually evaluated and are based on historic
experience and other factors, including expectation of future events that are believed to be
reasonable under the circumstances. In the process of applying the Company's accounting
policies, the management has made the following estimates and judgements which are
significant to the financial statements:

a) assumptions and estimates used in determining the recoverable amount, residual

values and useful lives of operating fixed assets (note 4.1);

46
 Annual Report 2021 – 22

b) assumptions and estimates used in determining lease term and incremental borrow-
ing rate of right-of-use assets and corresponding lease liabilities (notes 4.3 & 22);

c) assumptions and estimates used in calculating the provision for impairment for trade
debts (note 10); and

d) assumptions and estimates used for valuation of present value of defined benefit
obligation and fair value of plan assets (note 20).

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

During the year, effective from 1 January 2022, the Company revised the useful lives of its
certain classes of property, plant and equipment namely ‘Buildings on leasehold land’ and
‘Plant and Machinery’ to better reflect the economic benefits being utilized out of these
assets. The revision in useful life of these assets have been as follows:

Before revision After revision

Buildings on leasehold land
-        Concrete 10 years 20 years
-        Others 10 years 15 Years
Plant and machinery - imported 10 years 15 years

The aforesaid revision in the useful life has been accounted for as a change in estimate
prospectively in accordance with IAS 8 ‘Accounting Policies, Changes in Accounting
Estimates and Errors.’ Had there been no change in the useful life of the aforesaid class of
assets, the depreciation expense for the year would have been higher by Rs 116.224 million.

4. PROPERTY, PLANT AND EQUIPMENT

Note 2022 2021
(Rupees in '000)

Operating fixed assets 4.1 6,943,409 3,817,846

Capital work in progress 4.2 353,877 2,597,752
Right-of-use assets 4.3 326,136 298,726
7,623,422 6,714,324

47
4.1 Operating fixed assets

4.1.1 The following is a statement of operating fixed assets:

Leasehold Building on Plant and Fittings and Furniture Tools and Vehicles Computers Office Total
land leasehold machinery installations and equipment and equipment
land fixtures accessories
-----------------------------------------------------------------------------(Rupees in '000)-------------------------------------------------------------------------------
At July 1, 2020
Cost 178,634 1,231,807 5,359,309 345,073 172,131 500,717 637,039 218,817 163,090 8,806,617
Accumulated depreciation - (832,931) (3,346,620) (206,964) (120,341) (336,240) (294,319) (164,625) (86,777) (5,388,817)
Net book value 178,634 398,876 2,012,689 138,109 51,790 164,477 342,720 54,192 76,313 3,417,800

Year ended June 30, 2021

Additions - 13,912 69,201 16,865 7,884 128,107 131,320 43,335 7,000 417,624
Transfers from capital work in
progress during the year
(note 4.2.1) - 235,151 445,010 26,690 15,098 18,768 30,400 8,109 10,761 789,987

Disposals (note 4.1.5)

Cost - - (694) - (120) (726) (73,477) (16,834) (206) (92,057)
Depreciation - - 694 - 93 726 54,318 16,381 177 72,389
Net book value - - - - (27) - (19,159) (453) (29) (19,668)

Write offs (note 4.1.3)

Cost - (3,503) (1,123) - (61) (1,398) - (3,867) (2,564) (12,516)
Depreciation - 3,467 930 - 57 1,393 - 3,862 2,561 12,270
Net book value - (36) (193) - (4) (5) - (5) (3) (246)

Depreciation charge for the year

(note 4.1.6) - (112,328) (449,675) (29,996) (13,990) (46,055) (76,839) (39,083) (19,685) (787,651)
Net book value as at
June 30, 2021 178,634 535,575 2,077,032 151,668 60,751 265,292 408,442 66,095 74,357 3,817,846

Year ended June 30, 2022

Additions - 6,001 73,900 11,137 2,372 83,248 132,867 36,887 6,392 352,804
Transfers from capital work in
progress during the year
(note 4.2.1) - 1,046,054 1,913,243 494,592 17,861 73,590 17,193 457 35,039 3,598,029

Disposals (note 4.1.5)

Cost - - (16,896) (15,354) (87) (9,196) (64,735) (15,138) (3,880) (125,286)
Depreciation - - 16,175 14,433 87 8,887 41,364 14,661 3,729 99,336
Net book value - - (721) (921) - (309) (23,371) (477) (151) (25,950)

Write offs (note 4.1.3)

Cost - - - - - - - - - -
Depreciation - - - - - - - - - -
Net book value - - - - - - - - - -

Depreciation charge for the year

(note 4.1.6) - (94,314) (406,876) (60,379) (15,180) (66,629) (94,831) (40,321) (20,790) (799,320)
Net book value as at
June 30, 2022 178,634 1,493,316 3,656,578 596,097 65,804 355,192 440,300 62,641 94,847 6,943,409

At June 30, 2021

Cost 178,634 1,477,367 5,871,703 388,628 194,932 645,468 725,282 249,560 178,081 9,909,655
Accumulated depreciation - (941,792) (3,794,671) (236,960) (134,181) (380,176) (316,840) (183,465) (103,724) (6,091,809)
Net book value 178,634 535,575 2,077,032 151,668 60,751 265,292 408,442 66,095 74,357 3,817,846

Annual rates of
depreciation (%) 2021 - 10 & 25 10 & 25 10 & 25 15 & 33 15 & 33 20 & 50 33 15 & 33

At June 30, 2022

Cost 178,634 2,529,422 7,841,950 879,003 215,078 793,110 810,607 271,766 215,632 13,735,202
Accumulated depreciation - (1,036,106) (4,185,372) (282,906) (149,274) (437,918) (370,307) (209,125) (120,785) (6,791,793)
Net book value 178,634 1,493,316 3,656,578 596,097 65,804 355,192 440,300 62,641 94,847 6,943,409

Annual rates of
depreciation (%) 2022 - 5 to 20 7 to 25 10 & 25 15 & 33 15 & 33 20 & 50 33 15 & 33

48
 Annual Report 2021 – 22

4.1.2 Tools and equipments include cost of moulds held by third parties, for manufacturing
certain products of the Company, as follows:
2022 2021
(Rupees in '000)
Nimir Industrial Chemicals Limited 2,050 2,050
Leo Ultimate Plast 1,035 1,035
Techno Plast 5,532 5,532
Naveed Company 113 113
Afeef Packages (Private) Limited 2,796 2,796
Transpak (Private) Limited 28,099 28,099
Rizwan Enterprises 1,997 1,997
Sunrise Plastic Industries (Private) Limited 4,700 3,200
46,322 44,822

These assets are free of lien and the Company has full right of repossession.

4.1.3 Assets having cost of Rs Nil (2021: 12.516 million) and net book value of Rs Nil (2021: Rs
0.246 million) have been retired from active use and have been written off in these financial
statements.

4.1.4 Particulars of immovable property (i.e. land and building) in the name of the Company are
as follows:
Usage of immovable Total Area * Covered Area
Location property (Square metres) (Square metres)
a) G-6, S.I.T.E, Kotri, District Jamshoro (Sindh) Manufacturing facility 51,719 48,657

b) H-36(B) S.I.T.E, Kotri, District Jamshoro -do- 21,220 7,333

(Sindh)

c) 217, Sundar Industrial Estate, Raiwind Road, -do- 33,314 18,180

Lahore

* The covered area includes multi storey buildings.

49
4.1.5 The following operating fixed assets with a net book value exceeding Rs 500,000 were
disposed off during the year:
Particulars Mode of Cost Accumulated Net book Sale Gain/ Particulars of Relationship of buyer
disposal depreciation value proceeds (loss) buyers with Company or
------------------------------------(Rupees in '000)------------------------------- director, if any

Vehicles: As per
Company
policy 6,407 2,734 3,673 5,040 1,367 Aziz Jindani Employee

--do-- 3,767 1,140 2,627 3,185 558 Kalim Eshrat --do--

--do-- 2,297 31 2,266 2,575 309 Faizan Farooqi N/A

--do-- 2,327 965 1,362 2,253 891 Saad Bhutta Employee

--do-- 2,588 1,508 1,080 1,080 - Mudassir Iqbal --do--

Maturity of
Company's
maintained car
scheme 1,271 729 542 1,414 872 Muhammad Ashraf --do--

Fittings and
installations:

Bids 1,252 355 897 500 (397) Sajid Ali

Scrap Dealer N/A

Other items having

net book value of
less than Rs 500,000
each Various 105,377 91,874 13,503 41,015 27,512

2022
125,286 99,336 25,950 57,062 31,112

2021 92,057 72,389 19,668 51,598 31,930

50
 Annual Report 2021 – 22

4.1.6 Depreciation charge for the year has been allocated as follows:

Note 2022 2021

------(Rupees in '000)------
Cost of sales 26.1 673,955 684,579
Selling and distribution costs 27 86,608 68,341
Administrative expenses 28 38,757 34,731
799,320 787,651

4.2 Capital work in progress

Advances to suppliers 205,423 339,737

Others 4.2.1 148,454 2,258,015
353,877 2,597,752

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

Building on Plant and Fittings and Other Total

leasehold machinery installations assets
land
-----------------------------(Rupees in '000)----------------------------

Balance as at July 1, 2020 582,057 508,346 20,861 65,896 1,177,160

Capital expenditure incurred

during the year (note 4.2.2) 502,042 1,001,875 240,208 126,717 1,870,842

Transfers to operating
fixed assets (note 4.1.1) (235,151) (445,010) (26,690) (83,136) (789,987)

Transfers within class - - - - -

Charge off - - - - -

Balance as at June 30, 2021 848,948 1,065,211 234,379 109,477 2,258,015

Capital expenditure incurred

during the year 266,938 881,544 170,180 201,585 1,520,247
(note 4.2.2)

Transfers to operating
fixed assets (note 4.1.1) (1,046,054) (1,913,243) (494,592) (144,140) (3,598,029)

Transfers within class (24,928) 50,498 115,030 (140,600) -

Charge off - (8,408) (9,172) (14,199) (31,779)

Balance as at June 30, 2022 44,904 75,602 15,825 12,123 148,454

4.2.2 This includes items in transit aggregating Rs 65.946 million (2021: Rs 137.599 million).

51
4.3 RIGHT-OF-USE ASSETS

4.3.1 The following is a statement of right of use assets:

Note Buildings Tools and Total

equipment
------------(Rupees in '000)------------
As at July 1, 2021
Cost 344,125 46,873 390,998
Accumulated depreciation (83,053) (9,219) (92,272)
Net book value 261,072 37,654 298,726

Year ended June 30, 2022

Additions 85,410 26,605 112,015

Impact of termination of lease

Cost (35,104) - (35,104)
Accumulated depreciation 9,775 - 9,775
(25,329) - (25,329)
Depreciation charge for the year 4.3.2 (48,562) (10,714) (59,276)
Net book value as at June 30, 2022 272,591 53,545 326,136

As at June 30, 2021

Cost 344,125 46,873 390,998
Accumulated depreciation (83,053) (9,219) (92,272)
Net book value 261,072 37,654 298,726

As at June 30, 2022

Cost 394,431 73,478 467,909
Accumulated depreciation (121,840) (19,933) (141,773)
Net book value 272,591 53,545 326,136

2022 2021
------(Rupees in '000)------
4.3.2 Depreciation charge for the year has been allocated as follows:

Cost of sales 26.1 17,775 9,885

Selling and distribution costs 27 25,126 20,782

Administrative expenses 28 16,375 16,376

59,276 47,043

52
 Annual Report 2021 – 22

5. INTANGIBLE ASSETS
Note Goodwill Computer Total
and trade software
mark
At July 1, 2020 -----------(Rupees in '000)-----------
Cost 43,500 131,448 174,948
Accumulated amortisation (43,500) (117,773) (161,273)
Net book value - 13,675 13,675

Year ended June 30, 2021

Additions - 3,855 3,855
Amortisation for the year 5.3 - (8,868) (8,868)
Net book value as at June 30, 2021 - 8,662 8,662

Year ended June 30, 2022

Additions - - -
Amortisation for the year 5.3 - (5,157) (5,157)
Net book value as at June 30, 2022 - 3,505 3,505

At June 30, 2021

Cost 43,500 135,303 178,803
Accumulated amortisation (43,500) (126,641) (170,141)
Net book value - 8,662 8,662

At June 30, 2022

Cost 43,500 135,303 178,803
Accumulated amortisation (43,500) (131,798) (175,298)
Net book value - 3,505 3,505

5.1 Goodwill represents amount paid on acquisition of the brand “Sparkle” from Transpak Corporation
Limited and a trade mark costing Rs 1.5 million in respect of the brand “Sparkle” purchased on Janu-
ary 4, 2001. The trade mark was fully amortised during the year ended June 30, 2005, however, it is
still in active use.

5.2 Computer software is being amortised over a useful life of 3 years.

5.3 Amortisation charge for the year has been allocated as follows:
Note 2022 2021
-----(Rupees in '000)-----
Cost of sales 26.1 439 542
Selling and distribution costs 27 3,018 4,699
Administrative expenses 28 1,700 3,627
5,157 8,868

6. LONG TERM LOANS

Considered good
- due from executives 6.1 84,965 48,471
- due from other employees 6.1 32,068 25,085
117,033 73,556
Recoverable within one year 11 (38,802) (28,014)
6.2 78,231 45,542

53
6.1 These loans are interest free and have been given to executives and other employees of the Company
for purchase of house, vehicles or for personal use in accordance with their terms of employment.
These loans are to be repaid over a period of two to five years in equal monthly installments. Any
outstanding loan due from an employee at the time of leaving the service of the Company is adjustable
against final settlement of staff provident fund.

6.2 Long term loans have been carried at cost as the effect of carrying these balances at amortised cost
is not considered to be material.

7. LONG TERM SECURITY DEPOSITS Note 2022 2021

-----(Rupees in '000)-----
Long term security deposits 7.1 20,734 40,712

7.1 These include Rs 11.744 million (2021: Rs 11.744 million) representing amount deposited with Water
and Power Development Authority (WAPDA) for enhancement in electricity load for detergent unit at Kotri.

8. STORES AND SPARES Note 2022 2021

-----(Rupees in '000)-----
Stores 111,937 101,917
Spares 8.1 377,584 314,042
489,521 415,959
Less: Provision for obsolete stores and spares (6,325) -
26.1.3 483,196 415,959

8.1 These include spares in transit amounting to Rs 5.649 million (2021: Rs 31.783 million).

9. STOCK IN TRADE Note 2022 2021

-----(Rupees in '000)-----
Raw materials
- in hand 7,804,622 3,961,699
- with third parties 41,830 4,118
- in transit 903,728 639,417
26.1.1 8,750,180 4,605,234
Packing materials
- in hand 870,664 561,849
- with third parties 9,202 7,964
- in transit 11,651 7,252
26.1.2 891,517 577,065

Work in process 26.1 1,044,795 314,797

Finished goods
- in hand 1,966,046 1,504,979
- in transit 957 1,239
26 1,967,003 1,506,218
Trading goods
- in hand 427,493 248,049
- in transit 3,137 552
26 430,630 248,601
Less: Provision for obsolete inventory (16,198) -
13,067,927 7,251,915

54
 Annual Report 2021 – 22

Note 2022 2021

10. TRADE DEBTS -----(Rupees in '000)-----
Considered good
- due from related parties 10.1 4,703 1,624
- others 1,402,403 1,154,255
1,407,106 1,155,879
Considered doubtful
- others 7,740 7,740
1,414,846 1,163,619
Less: Provision for doubtful trade debts 10.4 7,740 7,740
1,407,106 1,155,879
10.1 Trade debts include the following amounts due from related parties:
2022 2021
-----(Rupees in '000)-----
The Aga Khan Hospital and Medical College Foundation 4,425 1,624
Ajinomoto Lakson Pakistan (Private) Limited 269 -
SIZA (Private) Limited 2 -
SIZA Foods (Private) Limited 7 -
4,703 1,624

10.2 The maximum aggregate amount of receivable due from related parties at the end of any month during
the year was Rs 4.703 million (2021: Rs 1.624 million).

10.3 As at June 30, 2022, trade receivables of Rs 420.980 million (2021: Rs 557.305 million) were past due
but not impaired. These relate to a number of independent customers for whom there is no recent
history of default. The ageing analysis of these trade receivables is as follows:

Note 2022 2021

-----(Rupees in '000)-----
Upto 1 month 301,386 479,214
1 to 6 months 119,232 77,739
More than 6 months 362 352
420,980 557,305
10.4 Provision for doubtful trade debts

Opening balance 7,740 7,740

Add: charge for the year - -
Closing balance 7,740 7,740

11. LOANS AND ADVANCES

Considered good
Current portion of long term loans
- due from executives 26,576 17,600
- due from other employees 12,226 10,414
6 38,802 28,014
Advances
- to employees 11.1 6,352 6,649
- to contractors and suppliers 11.2 209,690 75,323
- to collector of customs 36,465 -
291,309 109,986

11.1 Advances to employees are provided to meet business expenses and are settled as and when the
expenses are incurred.
55
 Note 2022 2021
11.2 Advances include the following amounts due -----(Rupees in '000)-----
from following related parties:

ICE Animations (Private) Limited - 221

Cyber Internet Services (Private) Limited 410 -
Television Media Network (Private) Limited 40,450 -
40,860 221

11.3 The ageing analysis of advances due from related parties is as follows:

Upto 1 month 40,860 -

1 to 6 months - 221
40,860 221

12. TRADE DEPOSITS AND SHORT TERM PREPAYMENTS

Security deposits 30,864 19,855

Prepayments 117,484 46,360
148,348 66,215

13. OTHER RECEIVABLES

Receivable from related parties 13.1 2,790 2,240

Special excise duties claimable 8,729 8,729
LC margin on imports 305,226 138,847
Others 13.4 114,858 139,529
431,603 289,345

13.1 Other receivables include the following amounts due from related parties:

Century Insurance Company Limited 2,730 2,124

Lakson Investment Limited 40 116
Cyber Internet Services (Private) Limited 20 -
2,790 2,240

13.2 The ageing analysis of other receivables due from related parties is as follows:

Upto 1 month 2,790 1,700

More than 6 months - 540
2,790 2,240

13.3 The maximum aggregate amount of receivable due from related parties at the end of any month during
the year was Rs 2.790 million (2021: Rs 3.302 million).

13.4 These include pay orders issued in favour of Collector of Customs for clearance of tooth brushes ship-
ments amounting to Rs 113.647 million (2021:138.667 million).

56
 Annual Report 2021 – 22

Note 2022 2021

14. SHORT TERM INVESTMENTS -----(Rupees in '000)-----

At amortised cost 14.1 149,105 2,686,000

At fair value through profit or loss 14.2 6,394,611 7,195,592
6,543,716 9,881,592

14.1 The profits on these term deposits range between 6.85% and 8.75% per annum (2021: between 5.75%
and 7.95% per annum) having maturity within one year.

14.2 Investments - Fair value through profit or loss

Name of the investee As at July Purchase Units Sale / As at Average Fair Value Unrealised Fair Value
July 01, during the reinvested Redemption June 30, cost as at as at June gain / (loss) as at June
2021 year during the during the 2022 June 30, 30, 2022 as at June 30, 2021
year year 2022 30, 2022

------------------------------- (Number of units in '000)-------------------------------

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

Lakson Income Fund 1,987 - 123 (2,110) - - - - 200,900

Lakson Money Market Fund 12,513 - 1,095 - 13,608 1,372,020 1,379,898 7,878 1,261,420

Atlas Money Market Fund 1,285 295 133 - 1,713 867,138 869,868 2,730 650,257

Atlas Income Fund 190 194 - (384) - - - - 99,515

NBP Income Opportunity Fund 9,326 - - (9,326) - - - - 100,421

UBL Liquidity Plus Fund 6,637 989 566 (2,468) 5,724 577,606 578,654 1,048 670,518

UBL Cash Fund 7,729 - 438 (2,739) 5,428 543,334 543,942 608 773,620

MCB Cash Management

Optimizer 9,773 988 932 - 11,693 1,180,718 1,184,662 3,944 986,715

ABL Cash Fund 82,531 - 5,771 (29,294) 59,008 599,197 601,979 2,782 840,254

ABL Islamic Cash Fund 1,564 - 47 (1,609) 2 - 5 5 15,638

HBL Cash Fund 5,640 - 515 - 6,155 622,926 623,602 676 570,805

HBL Money Market Fund 1,049 - - (1,049) - - - - 107,646

NIT Money Market Fund 10,594 - 951 - 11,545 111,327 111,460 133 102,135

Alfalah Ghp Money Market Fund 2,108 1,010 107 (3,225) - - - - 207,129

Alfalah Ghp Cash Fund 1,217 194 75 (584) 902 455,198 453,596 (1,602) 608,619

Pakistan Income Fund - 2,736 10 (2,746) - - - - -

HBL Income Fund - 897 7 (818) 86 9,508 9,568 60 -

Faysal Money Market Fund - 2,932 118 (2,684) 366 37,301 37,377 76 -

154,143 10,235 10,888 (59,036) 116,230 6,376,273 6,394,611 18,338 7,195,592

57
 Note 2022 2021
15. CASH AND BANK BALANCES -----(Rupees in '000)-----

With banks in current / savings accounts

- Local currency
- Current accounts 902,009 503,794
- Savings accounts 15.1 1,877,822 1,508,989
2,779,831 2,012,783
- Foreign currency
- Current accounts 13,295 17,456

Cheques in hand 107,595 90,956

Cash in hand 587 569
2,901,308 2,121,764

15.1 The rate of profit on savings accounts ranges between 12.25% and 12.80% (2021: 5.5%) per annum.

16. SHARE CAPITAL

16.1 Authorised share capital

2022 2021 2022 2021

Number of shares -----(Rupees in '000)-----

125,000,000 75,000,000 Ordinary shares of Rs 10 each 1,250,000 750,000

16.2 Issued, subscribed and paid-up share capital

2022 2021 Note 2022 2021
Number of shares -----(Rupees in '000)-----

5,882,338 5,882,338 Ordinary shares of Rs 10 each 58,824 58,824

fully paid in cash

66,913,245 57,418,169 Ordinary shares of Rs 10 each 669,132 574,181

issued as fully paid bonus shares
72,795,583 63,300,507 16.3 727,956 633,005

16.3 Reconciliation of number of shares outstanding

2022 2021 2022 2021

Number of shares -----(Rupees in '000)-----

63,300,507 57,545,914 Ordinary shares of Rs. 10/- each

At the beginning of the year 633,005 575,459

9,495,076 5,754,593 Issued during the year

as fully paid bonus shares 94,951 57,546

72,795,583 63,300,507 At the end of the year 727,956 633,005

58
 Annual Report 2021 – 22

16.4 Colgate-Palmolive Company, an associate incorporated under the laws of State of Delaware, USA,
owns 30% (2021: 30%) of the Company's share capital. The controlling shareholders of the Company
have a right of first refusal in the event that Colgate-Palmolive Company should divest their shares.

16.5 All ordinary shares rank equally with regard to the Company's residual assets. Holders of these shares
are entitled to dividends as declared from time to time and are entitled to one vote per share at general
meetings of the Company.

17. RESERVES

Note 2022 2021

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

Capital reserve
- Share premium reserve 17.1 13,456 13,456

Revenue reserve
- General reserve 17,920,000 15,440,000
- Unappropriated profit 4,088,766 4,094,841
22,008,766 19,534,841
22,022,222 19,548,297

17.1 This reserve can be utilised by the Company only for the purpose specified in section 81 of the Compa-
nies Act, 2017.

2022 2021
-----(Rupees in '000)-----
18. DEFERRED TAXATION

Credit / (debit) balances arising in respect of

timing differences relating to:

Taxable temporary difference

Accelerated tax depreciation allowance 332,980 110,582
Right-of-use assets 107,625 86,631
Intangibles 45 -
Short term investments 10,376 3,856
451,026 201,069
Deductible temporary difference
Provision for compensated absences (24,860) (19,631)
Provision for obsolete inventory and stores and spares (7,433) -
Intangibles - (388)
Provision for impairment of trade debts (2,554) (2,203)
Deferred liabilities (14,089) (12,381)
Lease liabilities (140,348) (107,649)
(189,284) (142,252)
261,742 58,817

59
18.1 The movement in temporary differences is as follows:

Balance as Recognised Balance as Recognised Balance as at

at July 1, in profit at June 30, in profit or June 30,
2020 or loss 2021 loss 2022
---------------------------------- (Rupees in '000) ---------------------------------
Deferred tax debits:
Accelerated tax depreciation
allowance 145,248 (34,666) 110,582 222,398 332,980
Right-of-use assets 89,710 (3,079) 86,631 20,994 107,625
Short term investments 2,495 1,361 3,856 6,520 10,376

237,453 (36,384) 201,069 249,912 450,981

Deferred tax credits:

Provision for compensated
absences (16,787) (2,844) (19,631) (5,229) (24,860)
Provision for obsolete
inventory and stores and spares - - - (7,433) (7,433)
Intangibles (1,008) 620 (388) 433 45
Provision for impairment of
trade debts (2,203) - (2,203) (351) (2,554)
Deferred liabilities (12,381) - (12,381) (1,708) (14,089)
Lease liabilities (101,726) (5,923) (107,649) (32,699) (140,348)

103,348 (44,531) 58,817 202,925 261,742

19. LONG TERM DEPOSITS

2022 2021
-----(Rupees in '000)-----
Deposits obtained from:
- Distributors 60,629 120,167
- Transporters 500 500
- Others 2,005 2,005
63,134 122,672

19.1 As per the requirements of section 217 of the Companies Act, 2017 deposits amounting to
Rs 35.948 million (2021: Rs 98.205 million) are utilised for the purpose of business as per the written
agreements and deposits amounting to Rs 24.680 million (2021: Rs 23.962 million) are kept in separate
bank account.

Note 2022 2021

20. DEFERRED LIABILITIES -----(Rupees in '000)-----

Staff retirement gratuity 20.1 76,106 (24,606)

Payable against Gas infrastructure development - 87,139
cess (GIDC)

20.1 Defined benefit plan (staff retirement gratuity)

- funded 20.5 76,106 (24,606)

20.2 As stated in note 2.14, 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. Actuarial valuation of the scheme is carried out every year and the latest actuarial
valuation was carried out as at June 30, 2022. The disclosures made in notes 20.3 to 20.17 are based
on the information included in the actuarial report.
60
 Annual Report 2021 – 22

20.3 The actuarial valuation of gratuity plan was carried out as at June 30, 2022. The projected unit credit
method using the following significant assumptions was used for this valuation:

2022 2021
Percentage
- Discount rate - per annum compound 13.25 10.00
- Expected rate of increase in salaries - per annum
For next year 13.50 13.00
For subsequent years 13.25 10.00

20.4 Mortality rate

The rates assumed were based on the SLIC (2001-2005) mortality table.

20.5 Statement of financial position reconciliation

Note 2022 2021
-----(Rupees in '000)-----
Present value of defined benefit obligation 20.6 897,616 842,892
Fair value of plan assets 20.7 (821,510) (867,498)
76,106 (24,606)

20.6 Movement in defined benefit obligation

Present value of defined benefit

obligation as at July 1 842,892 737,791
Current service cost 53,822 46,367
Interest cost 79,647 61,292
Remeasurement on obligation from
changes in financial assumption 1,782 18,848
Remeasurement on obligation from
experience adjustments 12,317 12,014
Benefits paid (92,844) (33,420)
Present value as at June 30 897,616 842,892

20.7 Movement in fair value of plan assets

Fair value as at July 1 867,498 690,498

Expected return on plan assets 82,399 61,492
Remeasurement on fair value of plan assets (35,543) 58,747
Contributions made to the fund - 90,181
Benefits paid (92,844) (33,420)
Fair value as at June 30 821,510 867,498

61
 Note 2022 2021
-----(Rupees in '000)-----
20.8 Movement in net liability in the statement of financial position is as follows:

Balance of net liability as at July 1 (24,606) 47,293

Charge for the year 20.10 51,070 46,167
Contributions made to the fund - (90,181)
Net remeasurement for the year 49,642 (27,885)
Balance of net liability / (asset) as at June 30 76,106 (24,606)

20.9 Amounts charged to profit or loss:

Current service cost 53,822 46,367

Net interest cost (2,752) (200)
51,070 46,167

20.10 Charge for the year has been allocated as under:

Cost of sales 26.1 23,414 20,565

Selling and distribution costs 27 15,950 14,505
Administrative expenses 28 11,706 11,097
51,070 46,167
20.11 Actual return on plan assets

Expected return on plan assets 82,399 61,492

Remeasurement on fair value of plan assets (35,543) 58,747
Actual return on plan assets 46,856 120,239

20.12 Plan assets comprise of the following:

2022 2021
(Rs in '000) Percentage (Rs in '000) Percentage
Shares and units of mutual funds 316,692 38.55 369,440 43.00
Debt instruments 445,834 54.27 435,396 50.00
Cash at Banks 58,984 7.18 62,662 7.00
821,510 100.00 867,498 100.00

20.13 Expected contribution to defined benefit plan for the year ending June 30, 2023 is Rs 103.636 million.

20.14 The sensitivity of the defined benefit obligation to changes in the weighted principal assumptions is:

Impact on defined benefit obligation

Change in Increase in Decrease in
assumption assumption assumption
-----(Rupees in '000)-----

Discount rate 1% 839,441 962,977

Salary growth rate 1% 962,354 838,967

62
 Annual Report 2021 – 22

20.15 The above sensitivity analyses are based on a change in an assumption while holding all other
assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions
may be correlated. When calculating the sensitivity of the defined benefit obligation to significant
actuarial assumptions the same method (present value of the defined benefit obligation calculated
with the projected unit credit method at the end of the reporting period) has been applied as when
calculating the staff retirement gratuity recognised within the statement of financial position.

20.16 The average duration of the defined benefit obligation is 7 years.

20.17 The Company faces the following risks on account of defined benefit plan:

Mortality risks - The risk that the actual mortality experience is different. The effect depends on the
beneficiaries service/age distribution and the benefit.

Final salary risks - The risk that the final salary at the time of cessation of service is different than what
was assumed. Since the benefit is calculated on the final salary, the benefit amount increases as
salary increases.

Withdrawal risks – The risk of higher or lower withdrawal experience than assumed. The final effect
could go either way depending on the beneficiaries’ service/age distribution and the benefit.

Investment risk - risk of investment underperforming and being not sufficient to meet the liabilities.

Note 2022 2021

21 LONG-TERM FINANCING
-----(Rupees in '000)-----
Financing under:
- salary refinance scheme 21.2 374,481 873,788
- temporary economic refinance facility 21.3 1,067,412 399,630
- renewable energy finance facility 21.4 54,349 46,661
1,496,242 1,320,079

Less: reclassified to Deferred grant 21.5 357,685 182,296

Less: current maturity of financing under:

- salary refinance scheme 368,544 499,308
- temporary economic refinance facility 12,964 -
- renewable energy finance facility 9,381 7,178
390,889 506,486
747,668 631,297

21.1 Following are the changes in the long term finances for which cash flows have been classified as
financing activities in the statement of cash flows
2022 2021
-----(Rupees in '000)-----
Balance as at July 1 1,320,079 312,837
Proceeds from long-term financing 676,436 1,133,864
Less: Long-term financing repaid during the year (500,273) (126,622)
Less: Amount recognised as deferred grant (357,685) (182,296)
Less: Current portion shown under current liabilty (390,889) (506,486)
Balance as at June 30 747,668 631,297

63
21.2 The long-term financing has been obtained under salary refinance scheme of State Bank of Pakistan
for a term of 2.5 years with grace period of 6 months from disbursement and carry mark-up at the rate
of 1% per annum payable quarterly. The principal repayments are scheduled in 8 quarterly install-
ments which have commenced from April 2021.

21.3 The long-term financing has been obtained under temporary economic refinance facility scheme of
State Bank of Pakistan for a term of 10 years with grace period of 24 months from disbursement and
carry mark-up at the rate of 2.5% per annum payable quarterly in arrears. The principal repayment
will take place in 32 quarterly installments which shall commence from March 2023.

21.4 The long-term financing has been obtained under Renewable energy scheme of State Bank of Paki-
stan for a term of 6.75 years from disbursement and carry mark-up at the rate of 3.75% per annum
payable quarterly in arrears. The principal repayment will take place in 27 quarterly installments
which have commenced from April 2021.

21.5 These loans have been recognised at fair value (present value of loan receipts discounted using
prevailing market interest rates for a similar instrument) and the differential amount has been record-
ed as deferred grant. The loan amount is being accreted using the effective interest rate method with
the corresponding effect on the interest expenses for the year in the profit or loss.

21.6 These loan facilites have been secured by way of charge over 'stocks & book debts' and 'machinery
& equipment' of the Company to the extent of Rs 1,466.67 million and Rs 1,800 million respectively
(2021: Rs 1,376.19 million and Rs 1,766.67 million respectively).

2022 2021
22. LEASE LIABILITIES -----(Rupees in '000)-----

Present value of minimum lease payments 402,422 371,059

Less: current portion of lease liabilities (60,987) (39,040)
341,435 332,019

22.1 The Company has total cash outflows for leases of Rs 94.012 million (2021: Rs 65.682 million).

Note 2022 2021

-----(Rupees in '000)-----
23. TRADE AND OTHER PAYABLES

Trade creditors 23.1 1,830,431 1,390,668

Accrued liabilities 23.2 2,949,599 2,337,495
Bills payable 1,464,105 637,968
Advances from customers - unsecured 23.3 160,930 110,726
Sales tax payable 310,066 335,630
Royalty payable to Colgate-Palmolive Co., USA 466,630 402,068
Workers’ profits participation fund 23.4 468,010 427,415
Workers’ welfare fund 174,357 158,944
Retention money payable 12,947 14,667
Gas Infrastructure Development Cess liability 22,785 35,518
Others 23.5 129,280 70,450
7,989,140 5,921,549

64
 Annual Report 2021 – 22

2022 2021
-----(Rupees in '000)-----
23.1 These include the following amounts due to related parties:

Century Paper & Board Mills Limited 36,216 5,418

Century Insurance Company Limited 28,232 10,666
Merit Packaging Limited 103,212 109,634
Caraway (Private) Limited 898 -
The Aga Khan Hospital and Medical College Foundation - 30
Television Media Network (Private) Limited 24,191 107
Express Publication (Private) Limited - 7
Sybrid (Private) Limited - 277
Ajinomoto Lakson Pakistan (Private) Limited 585 -
Siza (Private) Limited - 136
Siza Services (Private) Limited 224 -
Lakson Investment Limited 16 1,327
193,574 127,602

23.2 These include the following amounts accrued in respect of related parties:
2022 2021
-----(Rupees in '000)-----
Ajinomoto Lakson (Private) Limited 1,806 506
Century Paper & Board Mills Limited 278 3,183
Merit Packaging Limited 87,307 12,393
Caraway (Private) Limited 5,496 -
Sybrid (Private) Limited 60 60
Television Media Network (Private) Limited 14,105 67,545
109,052 83,687

Note 2022 2021

-----(Rupees in '000)-----
23.3 These include the following amounts of advances from related parties:

Century Paper & Board Mills Limited 48,416 -

48,416 -

23.4 Workers' profits participation fund

Balance at beginning of the year 427,415 360,009

Allocation for the year 29 468,010 427,415
895,425 787,424
Less: Payments during the year 427,415 360,009
Balance at end of the year 468,010 427,415

23.5 These include the following amounts payable to related parties:

CPPL Employees Provident Fund Trust 12,150 -

Colgate-Palmolive (Thailand) Ltd. - 1,742
Colgate-Palmolive (Hongkong) Ltd. - 5,030
Colgate-Palmolive (China) Co. Ltd. Guangzhou 37 28
12,187 6,800

65
24. SHORT TERM RUNNING FINANCES

24.1 The Company has arranged short-term borrowing facilities from various banks on mark-up
basis to the extent of Rs 1,540 million (2021: Rs 1,540 million), which can be interchangea-
bly utilised as running finance facilities or import credit facilities. These facilities expired
during the year and were renewed subsequently. The renewed facilities are available for
various periods between July 2022 and October 2023. The arrangements are secured by a
joint hypothecation of stocks, stores and spares, trade debts, other current assets and
second charge on immovable assets of the Company.

24.2 The mark-up on short term running facilities ranges between 14.41% to 15.99%
(2021: 7.95% to 8.95%) per annum.

24.3 The facilities for opening letters of credit and guarantees as at June 30, 2022 aggregated
Rs 9,300 million and Rs 2,425 million (2021: Rs 5,900 million and Rs 285 million) respectively
of which the amounts remaining unutilised at the year end were Rs 5,061 million and Rs
2,078 million (2021: Rs 3,672.818 million and Rs 174.253 million) respectively.

25. CONTINGENCIES AND COMMITMENTS

25.1 Contingencies

25.1.1 Company received a letter dated December 21, 2015 from the Directorate of Input Output
Co-Efficient Organisation, Federal Board of Revenue stating that the conditions for claiming
the exemption on import of a raw material during the year ended June 30, 2015 under SRO
565(1) / 2006 (SRO) were not fulfilled and sought an explanation from the Company as to
why Custom Duty of Rs 560.964 million, Sales Tax of Rs 93.971 million and Income Tax of Rs
8.237 million remitted under SRO may not be recovered from the Company. The Company
filed a constitutional petition No. D - 3134 of 2016 in the High Court of Sindh dated May 28,
2016 and obtained a stay order dated May 31, 2016 to restrain customs authorities from
taking any coercive action against the Company.

In 2016, Company deposited Post dated cheques with customs authorities as a security in
respect of duties and taxes amounting to Rs 19.758 million payable at the time of exbonding
of imported goods. Further, customs authorities have withheld cheques which became due
during the year 2018 amounting to Rs 19.758 million on account of claim in relation to
custom duty, sales tax and income tax made by custom authorities.

During the year 2017, the Company received another letter dated April 20, 2017 issued by
Collectorate of Customs claiming duties and taxes amounting to Rs 137.905 million on the
same grounds as stated in aforementioned paragraph.

During the year 2018, the Collector of Customs (Adjudication - I) vide order dated Novem-
ber 14, 2017 adjudicated the show cause notice and accordingly directed the Collectorate
to take further necessary actions in the light of the judgement of the High Court of Sindh. The
Collector of Customs being aggrieved by the decision has filed a Custom Appeal 32-K of
2018 before the Custom Appellate Tribunal which is pending till date.

66
 Annual Report 2021 – 22

The management of the Company, based on its discussion with tax and legal consultants,
is confident that its submissions shall be accepted and no demand will be raised against the
Company.

25.1.2 Contingent liabilities in respect of indemnities given to financial institutions for guarantees
issued by them on behalf of the Company in the normal course of business aggregate Rs
346.985 million (2021: Rs 110.747 million).

25.2 Commitments

25.2.1 Commitments in respect of capital expenditure and inventory items amounted to Rs 66.767
million and Rs 1,165.499 million (2021: Rs 357.068 million and Rs.984.946 million) respec-
tively.

25.2.2 Outstanding letters of credit amounted to Rs. 2,775.056 million (2021: Rs 1,589.214 million).

25.2.3 Outstanding duties leviable on clearing of stocks amounted to Rs 13.149 million

(2021: Rs 13.688 million).

25.2.4 Post dated cheques issued to the collector of customs against duty on inventory items
amount to Rs 595.414 million (2021: Rs 127.038 million).

Note 2022 2021

-----(Rupees in '000)-----
26 COST OF SALES

Opening stock of finished goods

(including trading goods) 1,754,819 1,534,690
Cost of goods manufactured 26.1 39,938,789 30,671,731
Purchases of trading goods 6,992,506 5,264,040
48,686,114 37,470,461
Less: Closing stock of finished goods 9 2,397,633 1,754,819
(including trading goods) 46,288,481 35,715,642

67
 Note 2022 2021
-----(Rupees in '000)-----
26.1 Cost of goods manufactured

Opening stock of work in process 314,797 581,972

Raw materials consumed 26.1.1 29,685,274 21,555,148
Packing materials consumed 26.1.2 6,577,426 5,261,056
Stores and spares consumed 26.1.3 175,119 164,728
Salaries, wages and other benefits 1,822,355 1,475,993
Staff retirement gratuity 20.10 23,414 20,565
Provident fund 26.1.4 24,453 22,519
Power and fuel 1,076,544 653,060
Repairs and maintenance 81,902 48,394
Rent, rates and taxes 80,847 43,863
Insurance 83,678 69,125
Laboratory expenses 16,264 17,954
Cartage 167,637 235,987
Depreciation on operating fixed assets 4.1.6 673,955 684,579
Depreciation on right-of-use assets 4.3.2 17,775 9,885
Amortisation 5.3 439 542
Other manufacturing expenses 161,705 141,158
40,983,584 30,986,528
Less: Closing stock of work in process 9 1,044,795 314,797
39,938,789 30,671,731
26.1.1 Raw materials consumed

Opening stock 4,605,234 3,538,598

Purchases 33,830,220 22,621,784
38,435,454 26,160,382
Less: Closing stock 9 8,750,180 4,605,234
29,685,274 21,555,148
26.1.2 Packing materials consumed

Opening stock 577,065 518,436

Purchases 6,891,878 5,319,685
7,468,943 5,838,121
Less: Closing stock 9 891,517 577,065
6,577,426 5,261,056
26.1.3 Stores and spares consumed

Opening stock 415,959 348,815

Purchases 242,356 231,872
658,315 580,687
Less: Closing stock 8 483,196 415,959
175,119 164,728

26.1.4 The investments by the provident fund in collective investment schemes, listed equity and debts
securities have been made in accordance with the conditions specified in section 218 of the Compa-
nies Act, 2017 and rules specified thereunder.

68
 Annual Report 2021 – 22

Note 2022 2021

-----(Rupees in '000)-----
27. SELLING AND DISTRIBUTION COST

Salaries, wages and other benefits 1,028,499 886,024

Staff retirement gratuity 20.10 15,950 14,505
Provident fund 26.1.4 29,588 26,639
Travelling and conveyance 53,666 28,904
Repairs and maintenance 21,669 8,623
Vehicle running expenses 167,354 102,149
Advertising and sales promotion 2,632,780 2,821,256
Royalty on sale of licensed products 27.1 407,929 340,280
Software license and maintenance 5,196 9,023
Postage, telephone and internet charges 25,971 29,009
Rent, rates and taxes 27.2 140,229 127,875
Printing and stationery 4,889 5,484
Subscription and membership 450 36
Legal and professional 944 1,898
Freight 2,092,395 1,740,497
Electricity 14,519 13,033
Insurance 62,587 57,560
Security service charges 11,559 11,775
Depreciation on operating fixed assets 4.1.6 86,608 68,341
Depreciation on right-of-use assets 4.3.2 25,126 20,782
Amortisation 5.3 3,018 4,699
Other expenses 17,586 14,025
6,848,512 6,332,417
27.1 Details of royalty paid during the year are as follows:

Name of Recipient Relationship with Registered Address 2022 2021

the Company -----(Rupees in '000)-----

Colgate-Palmolive Associate 300 Park Avenue, New York 340,281 278,180

Company 10022-7499 USA

27.2 Expense in respect of short term leases amounted to Rs 6.345 million (2021: Rs 6.753 million).

69
 Note 2022 2021
-----(Rupees in '000)-----
28. ADMINISTRATIVE EXPENSES

Salaries, wages and other benefits 375,945 341,136

Staff retirement gratuity 20.10 11,706 11,097
Provident fund 26.1.4 13,894 12,218
Travelling and conveyance 6,959 3,859
Repairs and maintenance 74,768 61,027
Vehicle running expenses 25,726 23,077
Postage, telephone and internet charges 16,402 14,949
Rent, rates and taxes 6,467 4,956
Software license fee 31,606 34,580
Printing and stationery 5,863 5,564
Subscription and membership 16,897 22,160
Legal and professional 19,280 5,469
Electricity 6,204 5,698
Insurance 25,488 25,396
Security service charges 5,984 5,236
Depreciation on operating fixed assets 4.1.6 38,757 34,731
Depreciation on right-of-use assets 4.3.2 16,375 16,376
Amortisation 5.3 1,700 3,627
Others 502 4,138
700,523 635,294
Charge from related parties 2,722 10,798
703,245 646,092

29. OTHER EXPENSES

Workers’ profits participation fund 23.4 468,010 427,415

Workers’ welfare fund 29.1 173,083 158,202
Auditors’ remuneration 29.2 3,551 4,243
Property, plant and equipment - written off 4.1.1 - 246
Donations 29.3 20,750 33,955
Exchange loss - net 52,545 -
Others 6,736 19,746
724,675 643,807

29.1 Workers’ welfare fund

Charge for the year 174,357 158,944
Prior year (1,274) (742)
173,083 158,202

29.2 Auditors’ remuneration

Audit fee 1,500 1,283
Fee for half yearly review 626 557
Statutory certifications 660 349
Others 29.2.1 469 1,702
3,255 3,891
Out of pocket expenses 296 352
3,551 4,243
29.2.1 This includes services relating to taxation.

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 Annual Report 2021 – 22

29.3 Donations include the following in which certain directors are interested:

Name of director Interest Name of donee 2022 2021

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

Mr. Zulfiqar Ali Lakhani, 18,000 22,700

Mr. Amin Mohammed Trustees Hasanali and
Lakhani and Mr. Iqbal Ali Gulbanoo Lakhani
Lakhani Foundation

Mr. Iqbal Ali Lakhani Trustee Layton Rehmatullah 500 500

Benevolent Trust

Mr. Iqbal Ali Lakhani Spouse is the Pakistan Special 1,000 2,412
chairperson Olympics

Mr. Zulfiqar Ali Lakhani Spouse is the Pakistan Women's

patron Swimming Association 20 -

Note 2022 2021

-----(Rupees in '000)-----
30. OTHER INCOME

Income from financial assets

Profit on savings accounts 154,863 95,031
Profit on treasury bills 53,320 111,618
Profit on a term deposit receipt 29,400 83,903
Profit on PIBs 436 -
Profit on Sukuk bonds - 1,741
Dividend Income 646,066 364,191
Exchange gain - net - 42,067
Unrealised gain on investments classified as
fair value through profit or loss 14,745 4,422
Gain on disposal of short term investments 91,929 22,859
Reversal of GIDC - 22,789
990,759 748,621
Income from non-financial assets
Insurance commission 530 -
Gain on disposal of items of property, plant and equipment 4.1.5 31,112 31,931
Sale of scrap 60,915 52,455
Others 16,203 22,777
108,760 107,163
1,099,519 855,784

71
 2022 2021
-----(Rupees in '000)-----
31. FINANCE COST AND BANK CHARGES

Guarantee commission 2,360 1,913

Interest on lease liabilities 49,224 49,538
Interest on long-term financing 29,637 13,145
Interest on short-term financing 252 -
Bank commission and other charges 46,042 43,852
Finance cost on GIDC 15,295 9,727
142,810 118,175

32. TAXATION

Current
- for the year 2,657,589 2,338,795
- for prior years (10,072) (8,426)
2,647,517 2,330,369
Deferred tax 202,925 (44,445)
2,850,442 2,285,924

32.1 Reconciliation between the average effective tax rate and the applicable tax rate.

2022 2021
Percentage

Applicable tax rate 29.00 29.00

Tax effect of income assessed under reduced rate (1.05) (0.55)
Tax effect due to impact of super tax 3.78 -
Others 1.07 0.36
32.80 28.81
Tax effect of income tax reversal relating to prior years (0.12) (0.11)
32.68 28.70

2022 2021
33. EARNINGS PER SHARE
-----(Rupees in '000)-----
Profit after taxation 5,871,580 5,676,749

Weighted average number of ordinary shares outstanding (Number of shares)

during the year (Restated)

72,795,583 72,795,583

2022 2021
---------(Rupees)---------
(Restated)

Earnings per share 80.66 77.98

33.1 There are no dilutive potential ordinary shares outstanding as at June 30, 2022 and 2021.

72
 Annual Report 2021 – 22

Note 2022 2021

34. CASH GENERATED FROM OPERATIONS -----(Rupees in '000)-----

Profit before taxation 8,722,022 7,962,673

Adjustment for non-cash charges and other items:

Depreciation on operating fixed assets 799,320 787,651

Depreciation on right-of-use assets 59,276 47,043
Amortisation expense 5,157 8,868
Gain on disposal of items of property, plant and equipment (31,112) (31,931)
Gain on termination of lease (10,535) -
Staff retirement gratuity 51,070 46,167
Profit on savings accounts (154,863) (95,030)
Profit on a term deposit receipt (29,400) (83,903)
Profit on treasury bills (53,320) (111,618)
Profit on PIBs (436) -
Profit on Sukuk bonds - (1,741)
Unrealised gain on investments classified as
fair value through profit or loss (14,745) (4,422)
Gain on disposal of short term investments (91,929) (22,859)
Profit on short term investments
Finance cost and Bank Charges 142,810 118,175
Provision for obsolete inventory 16,199 -
Provision for slow moving stores and spares 6,325 -
Stores and spares written off - 1,599
Property, plant and equipment written off - 246
Working capital changes 34.1 (4,597,557) 516,939
4,818,282 9,137,857
34.1 Working capital changes

(Increase) / decrease in current assets:

Stores and spares (73,562) (68,743)

Stock in trade (5,832,211) (1,078,219)
Trade debts (251,227) (318,738)
Loans and advances (181,323) 16,684
Trade deposits and short term prepayments (82,133) 27,632
Other receivables (142,258) 118,071
(6,562,714) (1,303,313)
Increase in current liabilities:
Trade and other payables 1,965,157 1,820,252
(4,597,557) 516,939
35. CASH AND CASH EQUIVALENTS

Cash and bank balances 15 2,901,308 2,121,764

Short term investments 14 77,000 2,686,000
2,978,308 4,807,764
36. PROPOSED DIVIDEND

The Board of Directors in its meeting held on July 29, 2022 have proposed a cash dividend of Rs 28
per share (2021: Rs 24 per share) aggregating Rs 2,038.276 million (2021: 1,519.212 million) and
bonus issue of 10.919 million shares (2021: 9.495 million) at the rate of 1.5 shares for every 10 shares
held (2021: 1.5 shares for every 10 shares) aggregating Rs 109.193 million (2021: 94.951 million) for
the year ended June 30, 2022. This is in addition to the interim cash dividend of Rs 24.5 (2021: Rs 25)
per share aggregating Rs 1,783.492 million (2021: Rs 1,582.513 million). Further, the Board has
proposed a transfer of unappropriated profit to general reserve amounting to Rs 1,941 million (2021:
Rs 2,480 million). The dividend, bonus issue and transfer are subject to the approval of members at
the annual general meeting. The effect of such dividend, bonus issue and transfer shall be accounted
for in the financial statements for the year ending June 30, 2023.
73
37. RELATED PARTY DISCLOSURES

37.1 Disclosure of transactions between the Company and related parties

The related parties comprise associated companies, staff retirement funds, directors and other key
management personnel. The Company in the normal course of business carries out transactions with
various related parties. The Company enters into transactions with related parties on the basis of
mutually agreed terms. Significant balances and transactions with related parties are as follows:

Relationship 2022 2021

Nature of transactions
with the Company (Rupees in '000)

Sale of goods, services provided and Associates 100,034 60,059

reimbursement of expenses

Purchase of goods, services received and Associates 4,261,227 3,463,913

reimbursement of expenses

Rent, allied and other charges Associates 40,147 37,380

Purchase of short term investments Associate - 200,000

Sale proceeds on redemption of Associate 200,000 650,000

short term investments

Profit on short term investments Associate 31,724 16,168

Royalty charges Associate 404,842 340,280

Purchase of property, plant and equipment Associate - 481

Expense in relation to staff retirement gratuity fund Employees fund 51,070 46,167

Expense in relation to provident fund Employees fund 67,936 61,375

Donations Associates 19,520 25,612

Compensation paid to key management Key management

personnel personnel 86,597 117,428

Insurance claims received Associate 4,184 4,003

Dividend paid Associates 2,904,706 2,372,368

Dividend received on mutual funds Associates 130,118 93,399

37.2 The related party status of outstanding balances as at June 30, 2022 are included in trade debts (note
10), loans and advances (note 11), other receivables (note 13), investments (note 14) and trade and
other payables (note 23). These are to be settled in the ordinary course of business. The receivables
and payables are primarily unsecured in nature and bear no interest.

74
 Annual Report 2021 – 22

37.3 Following are the related parties with whom the Company had entered into transactions or have
arrangements / agreements in place.

[Link]. Company Name Country of Basis of Aggregate % of

incorporation relationship shareholding in
the Company

1 Colgate-Palmolive Company, USA USA Associate 30.00%

2 Colgate-Palmolive PNG Ltd. Papua New Guinea Associate N/A
3 Colgate-Palmolive (Hongkong) Ltd. Hong kong Associate N/A
4 Colgate-Palmolive Asia Pacific Ltd. --do-- Associate N/A
5 Colgate-Palmolive (Thailand) Ltd. Thailand Associate N/A
6 Colgate Sanxiao Co. Ltd. China Associate N/A
7 Colgate-Palmolive (China) [Link]., Guangzhou --do-- Associate N/A
8 Colgate-Palmolive (Vietnam) Co. Ltd. Vietnam Associate N/A
9 Colgate-Palmolive Brazil Brazil Associate N/A
10 SIZA Services (Private) Limited Pakistan Common Director 25.28%
11 SIZA (Private) Limited --do-- Common Director 17.38%
12 SIZA Commodities (Private) Limited --do-- Common Director 3.07%
13 Century Insurance Co. Ltd. --do-- Common Director 0.04%
14 Century Paper & Board Mills Limited --do-- Common Director N/A
15 Merit Packaging Limited --do-- Common Director N/A
16 Lakson Business Solutions Limited --do-- Common Director N/A
17 Lakson Investments Limited --do-- Common Director N/A
18 Cyber Internet Services (Private) Limited --do-- Common Director N/A
19 Princeton Travels (Private) Limited --do-- Common Director N/A
20 SIZA Foods (Private) Limited --do-- Common Director N/A
21 Sybrid (Private) Limited --do-- Common Director N/A
22 Caraway (Private) Limited --do-- Associate N/A
23 Ajinomoto Lakson Pakistan (Private) Limited --do-- Common Director N/A
24 Pakistan Business Council --do-- Common Director N/A
25 Express Publication (Private) Limited --do-- Associate N/A
26 Television Media Network (Private) Limited --do-- Associate N/A
27 Pakistan Special Olympics --do-- Associate N/A
28 Hasanali & Gulbanoo Lakhani Foundation --do-- Trustee N/A
29 LRBT (Layton Rehmatullah Benevolent Trust) --do-- Trustee N/A
30 CPPL Employees Contributory Provident Fund --do-- Trustee N/A
31 CPPL Employees Gratuity Fund --do-- Trustee N/A
32 The Aga Khan Hospital and Medical College
Foundation --do-- Common Director N/A
33 Pakistan Women's Swimming Association --do-- Associate N/A
34 ICE Animations (Private) Limited --do-- Common Director N/A

75
38. REMUNERATION OF CHIEF EXECUTIVE AND EXECUTIVES

38.1 The aggregate amount charged in these financial statements for remuneration, including certain bene-
fits to the chief executive and executives of the Company, are as follows:
Chief Executive Executives
2022 2021 2022 2021
-------------------(Rupees in '000)-------------------
Managerial remuneration 23,173 19,862 473,756 406,320
Bonus / commission - - 171,418 124,957
Staff retirement gratuity - - 90,546 79,895
Provident fund - - 39,435 33,702
Housing 10,427 8,938 213,271 182,858
Utilities 3,884 3,572 - -
Motor vehicles 2,339 1,629 35,955 25,278
Others - - 69,309 56,409
39,823 34,001 1,093,690 909,419
Number of persons 1 1 180 146

38.2 The Chief Executive and the executives of the Company are also provided with Company maintained
cars.

38.3 Aggregate amount charged in these financial statements in respect of fees to independent directors is
Rs. 1.2 million (2021: Rs 1.1 million). No remuneration is paid to any non-executive director.

2022 2021
-----(Rupees in '000)-----
39. FINANCIAL INSTRUMENTS BY CATEGORY

FINANCIAL ASSETS
At amortised cost
Long term loans 78,231 45,542
Long term security deposits 20,734 40,712
Trade debts 1,407,106 1,155,879
Loans 38,802 28,014
Trade deposits 30,864 19,855
Other receivables 422,874 280,616
Accrued profit 4,760 12,158
Short term investments 149,105 2,686,000
Cash and bank balances 2,901,308 2,121,764
5,053,784 6,390,540
At fair value through profit or loss 6,394,611 7,195,592
11,448,395 13,586,132

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 Annual Report 2021 – 22

2022 2021
-----(Rupees in '000)-----
FINANCIAL LIABILITIES
At amortised cost
Long term deposits 63,134 122,672
Long-term financing 1,496,242 1,320,079
Lease Liabilities 402,422 371,059
Short-term financing 42,334 -
Trade and other payables 6,875,777 4,888,834
Unclaimed dividend 31,277 27,270
Accrued mark up 8,322 4,978
8,919,508 6,734,892

40. FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES

40.1 The Company’s activities expose it to certain financial risks. Such financial risks emanate from various
factors that include, but not limited to, market risk, credit risk and liquidity risk. The Company’s overall
risk management focuses on the unpredictability of financial markets and seeks to minimise potential
adverse effects on the Company’s financial performance. Risks measured and managed by the Com-
pany are explained in notes 40.1.1, 40.1.2 and 40.1.3 below:

40.1.1 Credit risk and concentration of credit risk

Credit risk represents the accounting loss that would be recognised at the reporting date if counter
parties fail to perform as contracted.

Out of the total financial assets of Rs 11,448.395 million (2021: Rs 13,586.132 million), the financial
assets that are subject to credit risk aggregated Rs 11,447.808 million (2021: Rs 13,585.563 million).

The analysis below summarises the credit quality of the Company's financial assets as at June 30,
2022 / 2021.

The bank balances along with credit ratings are tabulated below:

2022 2021
-----(Rupees in '000)-----
Credit ratings

A-1+ 2,777,104 2,019,800

Others 123,617 101,395
2,900,721 2,121,195

The analysis of credit rating of investees' in relation to short term investments is as follows:

2022 2021
Credit ratings -----(Rupees in '000)-----
A-1+ 128,747 2,686,000
AA 20,358 -

Management Quality ratings

AM1 1,296,121 1,189,272
AM2+ 5,098,490 6,006,320
6,543,716 9,881,592

77
 Long term security deposits are held with parties which have long association with the Company and
have a good credit history.

For trade debts, internal risk assessments process determines the credit quality of the customer, taking
into account its financial position, past experience and other factors. Individual risk limits are fixed by
the management based on internal or external ratings. The utilisation of credit limits is regularly moni-
tored. Accordingly the credit risk is minimal and the Company also believes that it is not exposed to
major concentration of credit risk.

The Company considers a financial asset to be in default when internal or external information
indicates that the Company is unlikely to receive the outstanding contractual amounts in full and it is
subsequently written off, if required.

The break up of amount due from customers other than related parties as stated in note 10 is present-
ed below:

2022 2021
-----(Rupees in '000)-----
Due from customers other than related parties
Institutional customers 1,300,101 1,054,908
Distributors 93,661 106,782
Others 16,381 305
1,410,143 1,161,995

Out of Rs 1,410.413 million (2021: Rs 1,161.695 million), the Company has provided Rs 7.740 million
(2021: Rs 7.740 million) being considered doubtful of recovery.

The balances of financial assets held with related parties other than short term investments are as
follows:
Note 2022 2021
-----(Rupees in '000)-----

Trade debts 10.1 4,703 1,624

Other receivables 13.1 2,790 2,240
7,493 3,864

Concentration of credit risk exists when changes in economic and industry factors affect the group of
counter parties whose aggregated credit exposure is significant in relation to the Company's total
credit exposure. The Company's financial assets are broadly diversified and transactions are entered
into with diverse credit worthy parties thereby mitigating any significant concentration risk. Therefore,
the Company believes that it is not exposed to major concentration of credit risk.

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 Annual Report 2021 – 22

40.1.2 Liquidity risk

Liquidity risk is the risk that an enterprise will encounter difficulties in raising funds to meet commit-
ments associated with financial instruments. The management believes that it is not exposed to any
significant level of liquidity risk.

The management forecasts the liquidity of the Company on the basis of expected cash flow consider-
ing the level of liquid assets necessary to meet such risk.

Financial liabilities in accordance with their contractual maturities are presented below:

Contractual cashflows
Maturity within Maturity after
one year one year Total
June 30, 2022
---------------------(Rupees in '000)---------------------
Financial liabilities
Long term deposits - 63,134 63,134
Long-term financing 427,269 1,217,583 1,644,852
Lease Liabilities 90,221 650,252 740,473
Trade and other payables 6,875,777 - 6,875,777
Short-term financing 42,334 - 42,334
Unclaimed dividend 31,277 - 31,277
Accrued mark up 8,322 - 8,322
7,475,200 1,930,969 9,406,169

June 30, 2021

---------------------(Rupees in '000)---------------------
Financial liabilities
Long term deposits - 122,672 122,672
Long-term financing 524,798 868,245 1,393,043
Lease Liabilities 74,534 497,011 571,545
Trade and other payables 4,888,834 - 4,888,834
Short-term financing - - -
Unclaimed dividend 27,270 - 27,270
Accrued mark up 4,978 - 4,978
5,520,414 1,487,928 7,008,342

40.1.3 Market Risk

Currency Risk

Currency risk arises mainly where receivables and payables exist due to transactions entered into
foreign currencies. The Company primarily has foreign currency exposures in US Dollars (USD) and
Euro.

79
 At June 30, 2022, had Pakistan rupee weakened / strengthened by 5% against the USD and Euro with
all other variables held constant, profit before taxation for the year would have been lower / higher by
Rs 73.205 million (2021: Rs 31.026 million). This will mainly result due to foreign exchange gains /
losses on translation of USD and Euro denominated bills payables.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows from a financial instrument will fluctuate
due to changes in market interest rates.

• Fair value risk - Presently, fair value risk to the Company arises from TDRs, long term financing,
lease liabilities and cash with banks in savings accounts which are based on fixed interest rates.
As at June 30, 2022, had there been increase / decrease in fixed interest rates by 100 basis points,
with all other variables held constant, profit before tax for the year would have been higher / lower
by Rs 12.704 million (2021: Rs 25.039 million).

• Future cash flow risk - Presently, the Company is not exposed to future cash flow risk.

Other price risk

Other price risk is the risk of changes in the fair value of investment in mutual funds as a result of chang-
es in the levels of net asset value of units held by the Company. As at June 30, 2022, had there been
increase / decrease in net asset value by 1%, with all other variables held constant,the profit before tax
for the year would have been higher / lower by Rs 63.946 million (2021: Rs 71.956 million).

40.1.4 Fair value of financial instruments

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction in the principal (or most advantageous) market at the measurement date under current
market conditions (i.e. an exit price) regardless of whether that price is directly observable or estimated
using another valuation technique.

As at June 30, 2022, all financial assets and financial liabilities are carried at amortised cost except for
investment in mutual funds and PIBs which are carried at their fair values.

The Company classifies fair value measurements using a fair value hierarchy that reflects the signifi-
cance of the inputs used in making the measurements. The fair value hierarchy has the following levels:

a) Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).

b) Inputs other than quoted prices included within level 1 that are observable for the asset or liability,
either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2).

c) Inputs for the asset or liability that are not based on observable market data (that is, unobservable
inputs) (level 3).

The Company recognises transfers between levels of the fair value hierarchy at the end of the reporting
period during which the transfer has occurred.

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 Annual Report 2021 – 22

The Company's policy for determining when transfers between levels in the hierarchy have occurred
includes monitoring of the following factors:

• changes in market and trading activity (e.g. significant increases / decreases in activity)

• changes in inputs used in valuation techniques (e.g. inputs becoming / ceasing to be observable
in the market)

There were no transfers between level 1, 2 or 3 of the fair value hierarchy during the year.

The valuation techniques used are as follows:

Level 1: Quoted prices (unadjusted) in active markets

The fair value of financial instruments traded in active markets is based on Net Asset Values (NAVs) of
the units of the mutual funds and quoted prices for floating rate PIBs at the reporting date. A market is
regarded as active when it is a market in which transactions for the asset or liability take place with
sufficient frequency and volume to provide pricing information on an on going basis.

The following table analyses within the fair value hierarchy of the Company's financial assets (by class)
measured at fair value at June 30, 2022:

2022
Financial assets Level 1 Level 2 Level 3 Total
--------------------(Rupees in '000)--------------------

Financial investments: Fair

value through profit or loss 6,394,611 - - 6,394,611

2021
Level 1 Level 2 Level 3 Total
Financial assets --------------------(Rupees in '000)--------------------

Financial investments: Fair

value through profit or loss 7,195,592 - - 7,195,592

41. 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 liquid
assets and keeping in view future investment requirements and expectation of the shareholders.

As at June 30, 2022 and 2021, the Company had surplus reserves to meet its requirements.
81
42. ENTITY-WIDE INFORMATION

42.1 The Company constitutes of a single reportable segment, the principal classes of products of which are
Personal Care, Home Care and Others.

42.2 Information about products

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

2022 2021
Personal Care 27% 28%
Home Care 69% 68%
Others 4% 4%
100% 100%
42.3 Information about geographical areas

The Company does not hold non-current assets in any foreign country. Revenues from external custom-
ers attributed to foreign countries in aggregate are not material in the overall context of these financial
statements.

42.4 Information about major customers

The Company does not have transactions with any external customer which amount to 10 percent or
more of its revenues.

43. PLANT CAPACITY AND ACTUAL PRODUCTION

2022 2021
(Quantities in tons)
Capacity 290,600 278,000

Production 271,729 253,867

Actual production was sufficient to meet the demand.

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 Annual Report 2021 – 22

44. NUMBER OF EMPLOYEES

The total and average number of employees during the year and as at June 30, 2022 and 2021 respec-
tively are as follows:

2022 2021
No of employees
Average number of employees during the year 1,152 1,118

Number of employees as at June 30 1,164 1,134

45. DATE OF AUTHORISATION FOR ISSUE

These financial statements were authorised for issue on July 29, 2022 by the board of directors of the
Company.

Iqbal Ali Lakhani Zulfiqar Ali Lakhani Mudassir Iqbal

Chairman Chief Executive Chief Financial Officer
83
Pattern of Shareholding
As at June 30, 2022
Incorporation Number KAR-5010 OF 1977-78
CUIN Registration NO. 005832
No. of Shareholdings Total Shares
Shareholders From To Held

526 1 100 Shares 11,911

180 101 500 Shares 43,687
81 501 1000 Shares 58,146
127 1001 5000 Shares 258,993
15 5001 10000 Shares 99,175
6 10001 15000 Shares 73,499
2 15001 20000 Shares 32,520
1 20001 25000 Shares 24,725
4 25001 30000 Shares 108,745
1 35001 40000 Shares 37,102
1 60001 65000 Shares 64,941
1 95001 100000 Shares 99,000
1 240001 245000 Shares 244,998
1 245001 250000 Shares 249,395
1 255001 260000 Shares 260,000
1 2235001 2240000 Shares 2,235,624
1 3270001 3275000 Shares 3,272,336
1 3855001 3860000 Shares 3,859,980
1 8865001 8870000 Shares 8,867,089
1 12650001 12655000 Shares 12,651,945
1 18400001 18405000 Shares 18,403,118
1 21835001 21840000 Shares 21,838,654

955 72,795,583

Categories of Shareholders Shares held Percentage

Directors, Chief Executive Officer, and their
spouses and minor children 3,288,726 4.52

Associated Companies, undertakings and related parties 42,950,516 59.00

NIT and ICP - -

Banks, Development Financial Institutions, Non Banking

Financial Institutions, Insurance Companies 3,769 0.01

Modarabas and Mutual funds 1,877 -

Shareholders holding 10% 61,760,806 84.84

General Public
a. Local 740,701 1.01
b. Foreign - -

Others 25,809,994 35.46

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

Zulfiqar Ali Lakhani

Chief Executive
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 Annual Report 2021 – 22

Details of Pattern of Shareholding as Per

Requirements of Code of Corporate Governance
i) ASSOCIATED COMPANIES, UNDERTAKINGS Shares Held
AND RELATED PARTIES
1. SIZA (Pvt) Limited 12,651,945
2. SIZA Services (Pvt) Limited 18,403,118
3. SIZA Commodities (Pvt) Limited 2,495,624
4. Premier Fashions (Pvt) Limited 8,867,089
5. Century Insurance Company Limited 26,774
6. Sultan Ali Lakhani 510
7. Shaista Sultan Ali Lakhani 813
8. Babar Ali Lakhani 4,371
9. Bilal Ali Lakhani 1,738
10. Danish Ali Lakhani 2,521
11. Anushka Lakhani 250,056
12. Anika Amin Lakhani 959
13. Natasha Lakhani 244,998

ii) MUTUAL FUND

CDC – Trustee AKD Index Tracker Fund 1,877

iii) DIRECTORS AND THEIR SPOUSES AND MINOR CHILDREN

1. Iqbal Ali Lakhani Chairman/Director 3,273,426
2. Zulfiqar Ali Lakhani Director/Chief Executive 2,374
3. Amin Mohammed Lakhani Director 7,984
4. Aliya Saeeda Khan Director 1,518
5. Kamran Yousuf Mirza Director 632
6. Syed Shahid Ali Bukhari Director 632
7. Peter John Graylin Nominee of Colgate-Palmolive -
Company, USA
8. Ms. Xuan Dai Nominee of Colgate-Palmolive -
Company, USA
9. Ronak Iqbal Lakhani W/o. Iqbal Ali Lakhani 754
10. Fatima Lakhani W/o. Zulfiqar Ali Lakhani 470
11. Saira Amin Lakhani W/o. Amin Mohammed Lakhani 936

iv) EXECUTIVES 1,614

v) PUBLIC SECTOR COMPANIES AND CORPORATIONS NIL

vi) BANKS, DEVELOPMENT FINANCE INSTITUTIONS,

NON-BANKING FINANCE COMPANIES,
INSURANCE COMPANIES, TAKAFUL, MODARABAS
AND PENSION FUNDS AND: 23,724
[Other than those reported at i (5)

vii) SHAREHOLDERS HOLDING 5% OR MORE

Colgate-Palmolive Co., USA. 21,838,654
Arisaig India Fund Limited, Hongkong 3,859,980
[Other than those reported at i(1), i(2) & i(4)]

viii) INDIVIDUALS AND OTHER THAN THOSE

MENTIONED ABOVE 830,492
72,795,583

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Annual Report 2021 – 22

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Annual Report 2021 – 22

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Annual Report 2021 – 22

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Annual Report 2021 – 22

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94
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 26th
day of September,2022 and at any adjournment thereof.

Signed this day of 2022.

Folio CDC Participant CDC Account/ No. of

No. ID No. Sub-Account No. Shares held

Signature

Witness 1 Witness 2

Signature Signature

Name Name

CNIC No. CNIC No.

Address Address

Notes: 1. The proxy must be a member of the Company.

2. The signature must tally with the specimen signature/s registered with the Company.

3. If a proxy is granted by a member who has deposited his/her shares in Central Depository
Company of Pakistan Limited, the proxy must be accompanied with participant’s ID number and
CDC account/sub-account number along with attested photocopies of Computerized National
identity Card (CNIC) or the Passport of the beneficial owner. Representatives of corporate mem-
bers 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 excluding holidays.

95
Fold Here

AFFIX
CORRECT
POSTAGE

Company Secretary
COLGATE-PALMOLIVE (PAKISTAN) LIMITED
Lakson Square, Building No. 2,
Sarwar Shaheed Road,
Karachi.74200
Phone: 38400000

Fold Here
Fold Here Fold Here

Fold Here Fold Here

96
Lakson Square, Building No. 2, Sarwar Shaheed Road, Karachi - 74200.
Tel.: +9221- 38400000