third quarter report - colgatecolgate.com.pk/.../04/cppl-third-qtr-accounts-march-2015.pdf · have...

Third Quarter ReportJanuary-March 2015

PageCONTENTS

COMPANY INFORMATION 2

DIRECTORS’ REVIEW 3-4

CONDENSED INTERIM BALANCE SHEET 5

CONDENSED INTERIM PROFIT AND LOSS ACCOUNT 6

CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY 7

CONDENSED INTERIM CASH FLOW STATEMENT 8

NOTES TO AND FORMING PART OF THE CONDENSEDINTERIM FINANCIAL STATEMENTS 9-19

1

2

BOARD OF DIRECTORSIqbal Ali Lakhani ChairmanAmin Mohammed LakhaniTasleemuddin Ahmed BatlayMukul DeorasLisa Mather (form October 20, 2014)Jerome Graham Webb (upto October 20, 2014)Aliya Saeeda KhanZulfiqar Ali Lakhani Chief Executive

ADVISORSultan Ali Lakhani

AUDIT COMMITTEEAliya Saeeda Khan ChairpersonIqbal Ali LakhaniAmin Mohammed LakhaniTasleemuddin Ahmed Batlay

HUMAN RESOURCE &REMUNERATION COMMITTEE

Iqbal Ali Lakhani ChairmanZulfiqar Ali LakhaniAmin Mohammed Lakhani

COMPANY SECRETARYMansoor Ahmed

AUDITORSA. F. Ferguson & Co.Chartered Accountants

INTERNAL AUDITORSBDO Ebrahim & Co.Chartered Accountants

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

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

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

217, Sundar Industrial EstateRaiwind Road, Lahore

WEBSITEwww.colgate.com.pk

COMPANY INFORMATION

3

DIRECTORS’ REVIEW

Despite intense competitive pressure, the turnover of the Company was Rs. 23,414 million, anincrease of 8.5% versus the nine-month period of the previous year. The gross profit margin increasedby 381 basis points to 31.37%. The declining commodity prices and raw material costs helped inthe increase of the gross profit margin.

Selling and Distribution expenses increased by 15.9% to Rs. 3,116 million mainly due to higheradvertisement & sales promotion spend and employee related costs. HR related costs attributedto the rise in administrative expenses, which amounted to Rs. 197 million, a 22.3% increase overthe corresponding period last year.

During this nine month period, profit from operations increased by 33.9% to Rs. 2,425 million. Otherincome grew by 68.4% to Rs. 175.726 million largely due to the realization of profits on short terminvestments.

As a result, the nine-month Profit After Tax of the Company grew by 32.5% to Rs. 1,664 million.Earnings per share increased to Rs. 34.69, a 32.5% increase versus corresponding period last year.

The Directors are pleased to present the third quarter report along with condensed interim financialinformation of the Company for the nine month period ending March 31, 2015.

Financial Highlights

The Financial results of the Company are summarized below:

July- March July- March2014-15 2013-14

Rs. in million Rs. in millionTurnover 23,414 21,589 8,5%

Gross Profit 5,753 4,705 22.3%

- as % age to Net Sales 31.37% 27.56% 381 bps

Selling and Distribution Costs 3,116 2,688 15.9%


Administrative Expenses 197 161 22.3%


Profit from Operations 2,425 1,811 33.9%

Profit After Tax 1,664 1,256 32.5%

Earnings per Share (Restated) - Rs. 34.69 26.19 32.5%

Variance(%)

4

Home and Personal Care Categories

Competition in fabric detergents is intensifying. Aggressive competitive advertising coupled withrecent price promotions by all leading industry players have made it a fiercely fought turf to defendand to grow market shares.

Our dishwashing brands have shown good growth despite competition's aggressive advertising andpromotional spends. This growth is mainly due to our highly engaging promotional programs thathave helped attract consumers towards our brands and increase our user's base.

We continue to grow our market share in toothpaste. In the toothbrush category, the Company isleading in both volume and value market shares. Our proven business strategies, oral healtheducation and awareness programs for school going children, urban and rural consumers, and ourhighly impactful integrated marketing campaigns have resulted in our oral care leadership.

Future Outlook

With pressure on commodity prices and its impact on disposable income of agrarian based consumers,an overall reduction in packaged consumer goods consumption is being observed. The pricereductions in some categories will incentivize consumers to buy but will impact profitability as wecontinue to be aggressive in defending and growing our market shares with increased advertisingand promotion spend.

In the near future, we foresee the market will continue operating at reduced price levels necessitatingthe Company to focus on cost optimization in all areas of business operations.

Acknowledgement

We would like to thank our customers for their continued loyalty and trust in our brands. We wouldalso like to thank our shareholders, bankers and suppliers for their support, and our employees fortheir commitment to the Company.

On behalf of Board of Directors

IQBAL ALI LAKHANIKarachi : April 22, 2015 Chairman

5Zulfiqar Ali Lakhani

Chief ExecutiveTasleemuddin Ahmed Batlay

Director

As at March 31, 2015CONDENSED INTERIM BALANCE SHEET (Unaudited-Note 2)

(Rupees in ’000)

March 31,2015

(unaudited)

June 30,2014

(audited)

Note

ASSETSNON-CURRENT ASSETSProperty, plant and equipment 4 2,989,009 3,147,236Intangible assets 6,814 4,810Long term loans 20,073 14,306Long term security deposits 14,267 14,587

3,030,163 3,180,939CURRENT ASSETSStores and spares 165,254 125,720Stock in trade 5 2,527,160 2,473,246Trade debts 581,079 653,003Loans and advances 109,532 122,898Trade deposits and short term prepayments 6 74,854 39,127Other receivables 7 25,114 25,749Profit receivable from banks 391 188Taxation 661,605 588,551Short term investments 8 2,867,518 2,144,508Cash and bank balances 1,204,523 853,956

8,217,030 7,026,946TOTAL ASSETS 11,247,193 10,207,885

EQUITY AND LIABILITIESSHARE CAPITAL AND RESERVESAuthorised share capital 75,000,000 ordinary shares of Rs.10 each 750,000 750,000

Issued, subscribed and paid-up share capital 9 479,549 479,549Reserves 8,081,828 7,233,554Remeasurement on post retirement benefits obligation (43,623) (43,623)Surplus on revaluation of investments 109,193 75,754

8,626,947 7,745,234LIABILITIESNON-CURRENT LIABILITIESDeferred taxation 422,943 439,239Long term deposits 21,491 21,232Deferred liability 22,189 22,189

466,623 482,660CURRENT LIABILITIESTrade and other payables 10 2,153,623 1,979,991TOTAL LIABILITIES 2,620,246 2,462,651

TOTAL EQUITY AND LIABILITIES 11,247,193 10,207,885

CONTINGENCIES AND COMMITMENTS 11

The annexed notes 1 to 16 form an integral part of these condensed interim financialstatements.

6Tasleemuddin Ahmed Batlay

DirectorZulfiqar Ali Lakhani

Chief Executive

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

For the Quarter and Nine months period ended March 31, 2015

Note Nine monthsperiod ended

March 31,2015

Nine monthsperiod ended

March 31,2014

Quarter endedMarch 31,

2015


2014

(Rupees in ’000)

(Rupees)

Turnover 7,937,626 7,467,738 23,413,810 21,589,317Sales tax (1,265,289) (1,189,342) (3,724,870) (3,431,742)Trade discounts (489,956) (356,635) (1,348,113) (1,086,347)Net turnover 6,182,381 5,921,761 18,340,827 17,071,228

Cost of sales (4,193,517) (4,248,709) (12,588,050) (12,366,360)Gross profit 1,988,864 1,673,052 5,752,777 4,704,868Selling and distribution costs (1,075,814) (968,363) (3,116,371) (2,688,371)Administrative expenses (67,228) (56,350) (196,603) (160,705)Other expenses (63,992) (53,052) (190,565) (149,122)Other income 66,060 42,067 175,726 104,320Profit from operations 847,890 637,354 2,424,964 1,810,990Finance cost and bank charges (5,003) (4,663) (14,973) (13,513)Profit before taxation 842,887 632,691 2,409,991 1,797,477Taxation - Current - for the period 271,502 204,251 772,300 543,700 - for prior years - - (3,857) (1,715)

271,502 204,251 768,443 541,985 - Deferred (1,154) (15,444) (21,960) (393)

(270,348) (188,807) (746,483) (541,592)Profit after taxation 572,539 443,884 1,663,508 1,255,885Other comprehensive income

for the period - net of taxItems that may be reclassified

subsequently to profit and lossSurplus on investments categorised

as 'available for sale' 9,099 18,247 39,104 35,251Impact of deferred tax (1,137) (1,825) (5,665) (3,525)

7,962 16,422 33,439 31,726Total comprehensive income

for the period 580,501 460,306 1,696,947 1,287,611

Earnings per share - restated 12 11.94 9.26 34.69 26.19

The annexed notes 1 to 16 form an integral part of these condensed interim financial statements.

7

Zulfiqar Ali LakhaniChief Executive

Tasleemuddin Ahmed BatlayDirector

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

For the Nine months period ended March 31, 2015

(Rupees in ‘000)

Issued,subscribedand paid upshare capital

Capitalreserve-

sharepremium

Generalreserve

Unappro-priatedprofit

Totalequity

Revenue reserves Surplus onrevaluation

ofinvestments-

net to tax

SubTotal -

reserves

Remeasurementon post retire-ment benefits

obligation -net of tax

Balance as at July 1, 2013

Comprehensive income for the period

Profit after taxation for the nine monthsperiod ended March 31, 2014

Other comprehensive income Surplus on revaluation of investments

Total comprehensive income for the period

Transfer to general reserve

Transactions with owners

Final dividend for the year endedJune 30, 2013 (Rs. 14.00 per share)

Bonus shares issued at the rate of one share for every ten shares held

Total transactions with owners

Balance as at March 31, 2014

Balance as at July 1, 2014

Comprehensive income for the period

Profit after taxation for the nine months periodended March 31, 2015

Other comprehensive income Surplus on revaluation of investments

Total comprehensive income for the period

Transfer to general reserve

Transactions with owners

Final dividend for the year endedJune 30, 2014 (Rs. 17.00 per share)

Balance as at March 31, 2015

435,954 13,456 4,590,000 1,590,776 6,194,232 (26,738) 27,970 6,631,418

- - - 1,255,885 1,255,885 - - 1,255,885

- - - - - - 31,727 31,727

- - - 1,255,885 1,255,885 - 31,727 1,287,612

- - 935,000 (935,000) - - - -

- - - (610,336) (610,336) - - (610,336)

43,595 - - (43,595) (43,595) - - -

43,595 - - (653,931) (653,931) - - (610,336)

479,549 13,456 5,525,000 1,257,730 6,796,186 (26,738) 59,697 7,308,694

479,549 13,456 5,525,000 1,695,098 7,233,554 (43,623) 75,754 7,745,234

- - - 1,663,508 1,663,508 - - 1,663,508

- - - - - - 33,439 33,439

- - - 1,663,508 1,663,508 - 33,439 1,696,947

- - 878,000 (878,000) - - - -

- - - (815,234) (815,234) - - (815,234)

479,549 13,456 6,403,000 1,665,372 8,081,828 (43,623) 109,193 8,626,947

The annexed notes 1 to 16 form an integral part of these condensed interim financial statements.



8

CONDENSED INTERIM CASH FLOW STATEMENT (Unaudited - Note 2)For the Nine months period ended March 31, 2015

(Rupees in ‘000)


March 31,2015


March 31,2014

Note

CASH FLOWS FROM OPERATING ACTIVITIESCash generated from operations 13 2,813,085 2,183,590Staff retirement gratuity paid (16,941) (61,723)Finance cost and bank charges paid (14,973) (13,504)Taxes paid (841,497) (665,335)Long term loans (5,767) (2,332)Long term security deposits 320 (549)Long term deposits 259 2,612Net cash inflow from operating activities 1,934,486 1,442,759

CASH FLOWS FROM INVESTING ACTIVITIESFixed capital expenditure (236,215) (297,526)Purchase of Intangible assets (4,430) (2,583)Sale proceeds on disposal of items of property,

plant and equipment 18,566 14,200Profit received on savings accounts 42,259 34,917Purchase of short term investments (2,500,000) (1,750,000)Proceeds on redemption of short term investments 1,910,365 941,127Net cash outflow from investing activities (769,455) (1,059,865)

CASH FLOWS FROM FINANCING ACTIVITIESDividend paid (814,464) (609,659)

Net cash outflow from financing activities (814,464) (609,659)

Net increase / (decrease) in cash and cash equivalents 350,567 (226,765)

Cash and cash equivalents at the beginning of the period 853,956 1,051,925

Cash and cash equivalents at the end of the period 1,204,523 825,160

The annexed notes 1 to 16 form an integral part of these condensed interim financialstatements.

9

NOTES TO AND FORMING PART OF THECONDENSED INTERIM FINANCIAL STATEMENTS (Unaudited - Note 2)For the Nine months period ended March 31, 2015

1. THE COMPANY AND ITS OPERATIONS

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

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

2. BASIS OF PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES

2.1 These condensed interim financial statements of the Company for the nine monthsperiod ended March 31, 2015 have been prepared in accordance with the requirementsof approved accounting standards as applicable in Pakistan for interim financialreporting which comprise of the International Accounting Standard 34 - 'Interim FinancialReporting' and provisions of and directives issued under the Companies Ordinance,1984 (the Ordinance). In case where requirements differ, the provisions of or directivesissued under the Ordinance have been followed. These interim financial statementsshould be read in conjunction with the financial statements for the year ended June30, 2014 as they provide an update of previously reported information.

2.2 These condensed interim financial statements comprise of the condensed interimbalance sheet as at March 31, 2015 and the condensed interim profit and loss account,the condensed interim statement of changes in equity, the condensed interim cashflow statement and notes thereto for the nine months period then ended. Thesecondensed interim financial statements also includes the condensed interim profitand loss account for the quarter ended March 31, 2015.

2.3 The comparative condensed balance sheet presented in these condensed interimfinancial statements, as at June 30, 2014 has been extracted from the annual auditedfinancial statements of the Company for the year ended June 30, 2014 whereas thecomparative condensed interim profit and loss account, condensed interim statementof changes in equity and condensed interim cash flow statement for the nine monthsperiod ended March 31, 2014 have been extracted from the condensed interim financialstatements of the Company for the nine months period then ended. The comparativecondensed interim profit and loss account for the quarter ended March 31, 2014 arealso included in these condensed interim financial statements.

2.4 New standards, amendments to approved accounting standards and newinterpretations which became effective during the nine months period endedMarch 31, 2015:

10

There were certain new standards, amendments to the approved accounting standardsand new interpretation issued by the international Financial Reporting InterpretationsCommittee (IFRIC) which became effective during the period but are considered notto be relevant or have any significant effect on the Company's operations and are,therefore, not disclosed in these financial statements.

2.5 New standards, amendments to approved accounting standards and newinterpretations that are not yet effective and have not been early adopted bythe Company:

There are certain new amendments to the approved accounting standards that aremandatory for accounting periods beginning after July 1, 2014, but are considerednot to be relevant or have any significant effect on the Company's operations andare, therefore, not disclosed in these financial statements.

2.6 The accounting policies and the methods of computation adopted in the preparationof these condensed interim financial statements are same as those applied in thepreparation of the financial statements for the year ended June 30, 2014.

3. SIGNIFICANT ACCOUNTING ESTIMATES , JUDGEMENTS AND FINANCIAL RISKMANAGEMENT

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

Judgements and estimates made by the management in the preparation of thesecondensed interim financial statements are same as those applied to financialstatements as at and for the year ended June 30, 2014.

The Company's financial risk management objectives and policies are consistentwith those disclosed in the financial statements as at and for the year ended June30, 2014.

(Rupees in ‘000)

March 31,2015

(unaudited)

June 30,2014

(audited)

Note

4. PROPERTY, PLANT AND EQUIPMENT

Operating fixed assets - net book value 4.1,4.2 & 4.3 2,928,485 3,047,545Capital work-in-progress - at cost 4.6 60,524 99,691

2,989,009 3,147,236

11


March 31,2015


March 31,2014

(Rupees in ‘000)4.1 Additions - operating fixed assets (at cost)

Factory building on leasehold land 6,764 40,989 Plant and machinery 141,974 317,091 Electric fittings and installation 5,917 32,906 Furniture and fixtures 2,646 442 Tools and equipment 11,592 5,537 Vehicles 75,475 79,812 Computers and accessories 17,795 10,023 Office equipment 13,219 4,936

275,382 491,736

4.1.1 Additions include transfers from capital work-in-progress aggregating Rs 104.447million (March 31,2014: Rs 379.831 million).

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

Plant and machinery 1,422 - Vehicles 7,943 9,216 Computer and accessories 163 99 Office equipment 398 -

9,926 9,315

4.3 Depreciation charge during the period 384,232 332,673

4.4 Included in operating fixed assets are items having cost of Rs. 38.265 million (June30, 2014: Rs. 39.890 million) held by third parties for manufacturing certain productsof the Company. These operating fixed assets are free of lien and the Company hasfull right of repossession of these assets.

4.5 During the period, the Company has identified certain items of operating fixed assetsfrom which further economic benefits are no longer being derived. Therefore, assetshaving cost of Rs 3.108 million (March 31, 2014: Rs 5.563 million) and net bookvalue of Rs 0.284 million (March 31, 2014: Rs 0.454 million) have been retired fromactive use and have been written off in these condensed interim financial statements.

12


March 31,2015


March 31,2014

(Rupees in ‘000)

(Rupees in ‘000)

March 31,2015

(unaudited)

June 30,2014

(audited)

4.6 Additions - Capital Work-in-Progress (at cost)

Factory building on leasehold land 16,011 23,799Plant and machinery 36,738 93,394Electric fittings and installation 1,161 20,273Tools and equipment 126 4,900Furniture & fixtures 1,520 13,965Office equipment 386 240Vehicles 9,338 29,050

65,280 185,621

5. STOCK IN TRADE

Raw and packing materials 1,436,561 1,455,682Work-in-process 243,373 360,531Finished goods - Manufactured 704,136 528,842Finished goods - Trading 143,090 128,191

847,226 657,033

2,527,160 2,473,246

5.1 Stock in trade include raw and packing materials in transit aggregating to Rs348.579 million (June 30,2014 : Rs 384.998 million) and finished goods in transitaggregating to Rs 12.892 million (June 30,2014 : Rs 4.381million).

6. TRADE DEPOSITS AND SHORT TERM PREPAYMENTS

Security deposits 11,585 15,875Prepayments 63,269 23,252

74,854 39,127

13

(Rupees in ‘000)

March 31,2015

(unaudited)

June 30,2014

(audited)

Note

87,653

8,207

-

17,292

10,966

355

319

124,792

12,687,575

5,126,897

5,144,548

199,318

-

-

-

23,158,338

8,594,461

2,364,937

-

1,249,499

39,051,643

13,193,308

1,317,575

65,771,423

-

-

-

-

-

-

-

-

8.1 Name of theinvesteesCompany

As at July01, 2014

Purchaseduring the

period

Sales /Redemptions

during theperiod

As atMarch

31, 2015

Fair Valueas at March

31, 2015

UnrealisedGain

as at March31, 2015

Average costas at March

31, 2015

Lakson Money Market Fund

UBL Liquidity Plus Fund

Meezan Sovereign Fund

Atlas Money Market Fund

ABL Cash Fund

ABL Govt.Securities Fund

UBL Govt.Securities Fund

(7,249,104)

(5,333,141)

(5,144,548)

(376,058)

(14,102,914)

-

-

(32,205,765)

14,032,932

2,158,693

-

1,072,759

24,948,729

13,193,308

1,317,575

56,723,996

1,408,260

222,307

-

556,613

255,546

150,000

150,000

2,742,726

1,495,913

230,514

-

573,905

266,512

150,355

150,319

2,867,518

Number of units Rupees in ‘000

Bonusunits

7. OTHER RECEIVABLES

Receivable from related parties 7.1 10,258 10,787Sales tax claimable 5,803 5,376Special excise duty claimable 8,720 8,720Claims receivable from an insurance Company 324 866Other 9 -

25,114 25,749

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

Clover Pakistan Limited - 39Tetley Clover (Private) Limited 6,023 10,748Employee gratuity fund 4,235 -

10,258 10,787

8. SHORT TERM INVESTMENTS

Investments - Available for sale 8.1 2,867,518 2,144,508

14

9. SHARE CAPITAL

March 31,2015

(unaudited)

June 30,2014

(audited)

March 31,2015

(unaudited)

June 30,2014

(audited)(Rupees in ‘000)(Number of shares)

9.1 Authorised share capital

75,000,000 75,000,000 Ordinary Shares 750,000 750,000 of Rs 10 each

9.2 Issued, subscribed and paid-up share capital

5,882,353 5,882,353 Ordinary shares of 58,824 58,824Rs.10 each fullypaid in cash

42,072,576 42,072,576 Ordinary shares of 420,725 420,725Rs.10 each issuedas fully paid bonusshares

47,954,929 47,954,929 479,549 479,549

10. TRADE AND OTHER PAYABLES

Trade creditors 10.1 630,830 470,883Accrued liabilities 10.2 818,412 748,820Bills payable 231,482 221,000Amounts due to distributors 27,970 35,349Sales tax payable 146,405 188,114Royalty payable to an associated undertaking 81,481 106,282Workers' profit participation fund 129,210 132,071Workers' welfare fund 45,885 49,101Retention money payable 3,172 4,318Unclaimed dividend 4,734 3,964Others 10.3 34,042 20,089

2,153,623 1,979,991

10.1 This includes Rs. 49.947 million (June 30,2014: Rs. 44.802 million) payable to related parties.



Note

15

11. CONTINGENCIES AND COMMITMENTS

11.1 Contingencies

11.1.1 There has been no significant development in the case disclosed as contingencyin note 24.1.1 to the Company's financial statements for the year ended June 30,2014.

11.1.2 During the year 2011, the Gas Infrastructure Development Cess (GIDC) was leviedat Rs 13 per unit of gas consumption through the Gas infrastructure DevelopmentCess Act, 2011 (the Act) .The rate was increased to Rs 100 per unit w.e.f. July2012 whereas subsequently it was reduced to Rs 50 per unit through a notificationdated September 7, 2012. The Sindh High Court through its order dated September19, 2012, however, has restrained Sui Southern Gas Company Limited (SSGCL),being the Company required to charge and collect the cess, from charging cessover and above Rs 13 per unit from the Company. In case of a separate petitionon June 13, 2013, the said Act was declared unconstitutional by the PeshawarHigh Court (PHC) and such judgment was also upheld by the Supreme Court onAugust 22, 2014.

On September 25, 2014, the Gas infrastructure Development Cess Ordinance,2014 (the Ordinance) was promulgated which levied GIDC at Rs 150 per unit.Section 8 of the Ordinance interlia states that notwithstanding anything to thecontrary contained in any decree of any court, the cess levied under the Act shallbe deemed to have been validly levied under the provision of the Ordinance (i.e.retrospective application). The Company has filed a petition to invalidate thepromulgation of the Ordinance which is pending adjudication. In the meantime onthe basis of the Company's application on October 20, 2014, the Sindh High Courtissued a stay order in favour of the Company refraining Sui Sourthern Gas CompanyLimited from collecting GIDC Under the Ordinance.

The amount of cess if determined to be payable by the Company with retrospectiveeffect shall aggregate Rs 32 million approximately, However the Company, basedon the advice of its legal counsel, is confident of a favorable outcome of theaforementioned application to the Sindh High Court and, therefore, has notaccounted for the amount of Rs 32 million in the condensed interim financialstatements.

11.1.3 Cases have been filed against the Company by some employees claiming Rs0.784 million (June 30, 2014: Rs 2.078 million) in aggregate. Provision has notbeen made in these financial statements for the said amounts as the managementof the Company, based on the advice of its legal counsel handling the subjectcases, is of the opinion that matters shall be decided in the Company's favor.

11.1.4 Post dated cheques have been issued to custom authorities in respect of dutiesand taxes amounting to Rs 94.906 million (June 30, 2014: Rs 76.026 million) asa security in the event that the imported goods are not consumed within theprescribed time period and the certificate of the same is not provided to the collectorof customs, cheques issued as security shall be encashable.

16

12.1 There were no dilutive potential ordinary shares outstanding as at March 31, 2015 or 2014.

11.1.5 Contingent liabilities in respect of indemnities given to financial institutions forguarantees issued by them on behalf of the Company in the normal course ofbusiness aggregate Rs.32.931 million (June 30, 2014 - Rs. 32.931 million).

11.2 Commitments

11.2.1 Commitments in respect of capital expenditure and inventory items amount to Rs.11.096 million and Rs. 376.104 respectively (June 30, 2014: Rs. 46.134 millionand Rs. 325.056 respectively).

11.2.2 Outstanding letters of credit amount to Rs. 418.255 million (June 30, 2014: Rs.726.451 million).

11.2.3 Outstanding duties leviable on clearing of stocks amount to Rs. 2.215 million(June 30, 2014: Rs. 10.677 million).

12. EARNINGS PER SHARENine monthsperiod ended

March 31,2015


March 31,2014


2015


2014

(Rupees in ’000)

(Rupees)

(Number of shares)

Profit after taxation 572,539 443,884 1,663,508 1,255,885

Weighted average number of ordinary shares outstanding

during the period (restated) 47,954,929 47,954,929 47,954,929 47,954,929

Earnings per share (restated) 11.94 9.26 34.69 26.19

17


March 31,2015


March 31,2014

(Rupees in ‘000)

Note

13. CASH GENERATED FROM OPERATIONS

Profit before taxation 2,409,991 1,797,477Adjustment for non-cash charges and other items:Depreciation and amortisation expense 386,658 335,207Gain on disposal of items of property,

plant and equipment (8,640) (4,886)Expenses for staff retirement gratuity 12,705 16,116Property, plant and equipment written off 4.5 284 454Profit on savings accounts (42,462) (35,352)Profit on treasury bills - (3,269)Gain on redemption of short term investments (94,272) (33,918)Finance cost and bank charges 14,973 13,513Stocks in trade written off 12,390 11,119Liabilities no longer payable written back (52) (25)Working capital changes 13.1 121,510 87,154

2,813,085 2,183,590

13.1 Working capital changes

Increase in current assets:

Stores and spares (39,534) (33,430)Stock in trade (66,304) 155,328Trade debts 71,924 (109,130)Loans and advances 13,366 (87,866)Trade deposits and short term prepayments (35,727) (28,915)Other receivables 4,878 8,575

(51,397) (95,438)Increase in current liabilities:

Trade and other payables 172,907 182,592121,510 87,154

14. RELATED PARTIES

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

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

18

Nature of balance

(Rupees in ‘000)

March 31,2015

(unaudited)

June 30,2014

(audited)

(Rupees in ‘000)

Nature of transactions Nine monthsperiod ended

March 31,2015


March 31,2014

Relationshipwith the

Company

Trade debts Associates 2,581 2,105Other receivables Associates Refer note 7.1Short term investments Associates 1,495,913 1,270,077Trade and other payable Associates Refer note 10

For better presentation, the Company has reassessed the requirements of IAS 24 - 'Related- Party Disclosures' and has changed related party balances alongwith the correspondingamounts in these condensed interim financial statements.

Sale of goods, services provided and reimbursement of expenses Associates 23,134 21,812Purchase of goods, services received and reimbursement of expenses Associates 1,242,276 1,225,227Purchase of short term investments Associates 900,000 750,000Sale proceeds on redemption of short term investments Associates 750,000 375,000Rent, allied and other charges Associates 20,128 15,676Royalty charges Joint venture

company 80,952 75,890Insurance claims received Associates 12,007 7,059Insurance commission income Associates 16,741 5,569Sale of property, plant and equipment Associates 30 98Purchase of property, plant and equipment Associates 1,831 958Contribution to staff retirement benefits Employee fund 34,045 33,637Compensation paid to Key management personnel Key management

personnel 43,187 28,364Donations Associates 13,500 13,500Dividend paid Associates/

Joint venture 716,973 536,771

19



%


March 31,2015


March 31,2014

15. ENTITY-WIDE INFORMATION

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

15.2 Information about products

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

Personal Care 22% 22%Home Care 74% 74%Others 4% 4%

100% 100%

15.3 Information about geographical areas

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

15.4 Information about major customers

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

16. DATE OF AUTHORISATION FOR ISSUE

These condensed interim financial statements were authorised for issue on April 22,2015 by the Board of Directors of the Company.

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

Tel: +9221-35698000

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