COLGATE - PALMOLIVE (PAKISTAN) LTD.
Annual Reports 2003.
Company Information
Corporate Profile
Our Equities and Activities
Notice of Meeting
Financial Summary
Directors' Report
Statement of Value Added
Statement of Compliance with the Code
of Corporate Governance
Auditors' Review on Statement of Compliance
with the Code of Corporate Governance
Auditors' Report to the Members
Balance Sheet
Profit & Loss Account
Cash Flow Statement
BOARD OF DIRECTORS
Iqbalali Lakhani		Chairman
Amin Mohammed Lakhani
Tasleemuddin Ahmed Batlay
Soren Peter Dam
Ebrahim Sidat
Ramzan Ali Halani
ZulfiqarAli Lakhani		Chief Executive
ADVISOR
Sultanali Lakhani
AUDIT COMMITTEE
Ebrahim Sidat		Chairman
Iqbalali Lakhani
Tasleemuddin Ahmed Batlay
COMPANY SECRETARY
Ramzan Ali Halani
AUDITORS
EBRAHIM & CO.
Chartered Accountants
REGISTERED OFFICE
Lakson Square, Building No. 2,
Sarwar Shaheed Road,
Karachi-74200
Pakistan
FACTORIES
Detergents, Soap and Paste Units
G-6, S.I.T.E. Kotri
Distt. Dadu (Sindh)
Pakistan
COLGATE-PALMOLIVE'(PAKISTAN) L TD.
CP's mission is to become a fast growing consumer goods
company by developing and delivering innovative new
products to consumers and marketing them more efficiently.
CP's brands, in four core categories include household
names like Colgate toothpaste, Brite Total washing powder,
Max Bar, Palmolive Soap, Express detergent etc.
The period of July 2002 to June 2003 was indeed an eventful
year for us. With profitability and growth in revenue averaging
at around 44.3% and 23.5% respectively, we continued to
delight our customers and maintain the growth momentum
well into the current year. A lot of this expansion came about
from our successful product launches and revitalizations in
the year, such as Colgate Herbal, Colgate Total Fresh Stripe,
and the relaunches of our popular equities Express detergent
and Palmolive Naturals soap.
With a unique combination of the right products and an
extensive distribution drive, we hope to continue this healthy
growth momentum with an end to improve the life of every
Pakistani consumer.
NOTICE OF MEETING
NOTICE IS HEREBY GIVEN that the 25th Annual General Meeting of COLGATE-PALMOLIVE
(PAKISTAN) LIMITED will be held on Monday October 06, 2003 at 10.30 a.m. at Karachi Sheraton
Hotel & Towers, Club Road, Karachi to transact the following business:
1.       To receive, consider and adopt the audited financial statements for the year ended June 30,
2003 together with the Directors' and Auditors' Reports thereon.
2.       To declare final dividend @ 70% i.e. Rs.7.00 per share of Rs.10/- each as recommended by the
Board of Directors.
3.       To appoint auditors and fix their remuneration.
By Order of the Board
RAMZAN ALI HALANI
KARACHI: September 01 , 2003                                                      Director & Company Secretary
NOTES:
1.       The share transfer books of the Company will remain closed from September 24, 2003 to
October 06, 2003, both days inclusive. Transfers received in order at the Company's Registered
Office situated at Lakson  Square,  Building  No. 2,  Sarwar Shaheed  Road,  Karachi  upto
September 23, 2003 will be considered in time for entitlement of the dividend.
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 account/sub-account number alongwith
Original National Identity Card (NIC) or original Passport at the time of attending the meeting.
3.       A member entitled to attend and vote at the general meeting may appoint another member as
his/her proxy to attend, speak and vote instead of him/her.
4.       Forms of proxy to be valid must be properly filled-in executed and  received at the Company's
Registered Office not later than 48 hours before the time of the meeting.
5.       Members are requested to notify the Company promptly of any change in their addresses.
6.       Form of proxy is enclosed herewith.
FINANCIAL SUMMARY
Year ended June 30, 2003
Rupees in million except EPS		2001	2002	%Change	2003	%Change
Gross Sales		2,401	2,803	16.70%	3,462	23.50%
Operating Income		159	210	32.10%	292	39.00%
Net Profit After Tax		95	121	27.40%	175	44.60%
Earnings per share (Rs.)		7.8	9.9	26.90%	14.31	44.50%
Shareholders' Equity		335	395	17.90%	484	22.50%
DIRECTORS' REPORT
The Directors take pleasure in presenting the 25th Silver Jubilee Annual Report together with the
Company's audited accounts for the year ended June 30, 2003.
				(Rupees in thousand)
PROFIT AND APPROPRIATIONS
Profit after taxation				175,022
Un-appropriated profit brought forward				3,856
Profit available for appropriation				178,878
Appropriations
Proposed cash dividend @ 70% Rs. 7.00 per share				85,612
(2002: 50% Rs. 5.00 per share )
Transfer to General Reserve				90,000
				175,612
Un-appropriated profit carried forward				3,266
Earnings per share				Rs. 14.31
OPERATING RESULTS
Our Company's growth momentum has continued with the emerging economic stability, even though
challenges of economic, political and social conditions still remain dominant in the Country. The gross
sales achieved during the year was Rs. 3.462 billion as compared to Rs. 2.803 billion during the
previous year, recording a growth of 23.51% whereas unit volume grew by 21.90%.
The gross profit margin increased to 27.7 % from the 2002 level of 25.8 %. This increase in the gross
profit from Rs. 578.854 million (25.8 % of net sales) to Rs. 757.288 million (27.7% of net sales) reflects
the Company's successful strategy to improve all aspects of its supply chain, cost reduction initiatives
and its continuous emphasis on margin improvements.
The selling, general and administrative expenses were Rs.454.519 million as compared to Rs. 359.061
million in the last year. The increase in 2003 is primarily driven by spending on advertising, promotion
and other marketing incentives towards brand building and brand support. In addition the increase is
also due to the introduction of employees' gratuity plan.
Financial charges reduced substantially due to decline in the interest rates. Term loans obtained for our
expansion projects were re-priced to bring in line with the prevailing market lending rates. Company's
financial charges of Rs. 22.016 million were lower than last year by 5.1% inspite of major term loans
having been acquired to finance the expansion plans during the year.
The net profit before tax for the year has increased to Rs. 270.279 million from Rs. 187.285 million
showing an increase of 44.3 % over the last year.
LIQUIDITY AND CAPITAL RESOURCES
Company's improved profitability has helped increase cash flows from operations. Net cash provided
by operations increased by 30.6% to Rs.276.397 million compared with Rs.211.635 million of last year.
The increase reflects the Company's improved profitability and efficient working capital management.
Cash generated from operations was used to fund capital spending and increased dividend payout.
CHALLENGES AND PROSPECTS
The Company is well positioned for further growth and profitability. Nevertheless, the market is
becoming intensely competitive with greater media spending and higher trade incentives by major
competition. The competitive trends are expected to intensify in the coming year.
Your Company's Projects are being completed on time. Capital expenditure includes capacity
expansion besides improving the manufacturing facilities, modernization and removal of the
bottlenecks to achieve the desired synergies.
In order to achieve growth targets, the Company continues with its efforts to introduce new products,
line extensions and improvement of existing brand portfolios.
HUMAN RESOURCE
The Company continues the efforts to improve the manpower quality through training and ongoing
exposure to the workforce at different levels. At the same time the efforts are directed towards
improving conditions and work environment to nurture the high potential managers in different
disciplines. Thus making the Company the "Best Place To Work".
COMMUNITY DEVELOPMENT
Community development work under the program of "Colgate Bright Smile Bright Future" is expanding
to cover greater number of school children in more geographical locations. Smaller towns have also
been taken into the coverage area. The Global Art contest is also a successful activity. Colgate
Pakistan won the world competition in the art contest for the second consecutive year.
CORPORATE AND FINANCIAL REPORTING FRAMEWORK
The directors are pleased to state that your Company is compliant with the provisions of the Code of
Corporate Governance as required by Securities & Exchange Commission of Pakistan (SECP).
Following are the Statements on Corporate and Financial Reporting Frame Work:
•         The financial statements, prepared by the management of the Company, present fairly its state
of affairs, the result of its operations, cash flows and changes in equity.
•         The Company has maintained 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 judgement.
•         In preparation of these financial statements International Accounting Standards, as applicable in
Pakistan, have been followed.
•         The system of internal control is sound in design. The system is being continuously monitored
by Internal Audit and through other such monitoring procedures. The process of monitoring
internal controls will continue as an ongoing process with the objective to further strengthen the
controls and bring in improvements in the system.
There are no doubts upon 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.
A summary of key operating and financial data of the Company of last six years is annexed in
this report.
Information about taxes and levies is given in the notes to the accounts.
The value of investments made by Staff Provident fund and amount held in PLS Saving Account
based on audited accounts' as at   December 31, 2002 amounted to Rs. 53.363 million.
The Gratuity Fund was established on January 1, 2003.  The balance in PLS saving account
before credit of profit amounted to Rs. 10.936 million as on June 30, 2003. Since the year is not
completed the audited accounts will be available after December 31, 2003.
The Board had four (4) meetings during the year. Attendance by each Director was as follows:
			Attended
Mr. Iqbalali Lakhani			2
Mr. Zulfiqar All Lakhani			3
Mr. Amin Mohammed Lakhani			4
Mr. Tasleemuddin Ahmed Batlay			4
Mr. Ramzan Ali Halani			4
Mr. Soren Peter Dam   Nominee of CP-USA			0
Mr. Ebrahim Sidat         Nominee of CP-USA			4
Leave of absence was granted to directors who could not attend some of the Board meetings.
PATTERN OF SHAREHOLDING
•         A statement showing pattern of shareholding of the Company and additional information as at
June 30, 2003 is included in this report.
•         The Directors, CEO, CFO, Company Secretary and their spouses and minor children did not
carry out any transaction in the shares of the Company during the year.