| COLGATE-PALMOLIVE (PAKISTAN) LTD. |
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REPORT AND ACCOUNTS |
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JANUARY 1995 - JUNE 1996 |
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CONTENTS |
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| COMPANY
INFORMATION |
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2 |
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| NOTICE
OF MEETING |
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3-4 |
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| DIRECTORS'
REPORT |
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5-6 |
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| AUDITORS'
REPORT |
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7 |
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| BALANCE
SHEET |
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8-9 |
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| PROFIT
AND LOSS ACCOUNT |
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10 |
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| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
12-13 |
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| NOTES
TO THE ACCOUNTS |
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14-26 |
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| PATTERN
OF HOLDING OF SHARES |
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27 |
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| YEARWISE
FINANCIAL HIGHLIGHTS |
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28 |
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| FORM
OF PROXY |
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COMPANY INFORMATION |
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| BOARD
OF DIRECTORS |
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| IQBALALI
LAKHANI |
Chairman |
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| TASLEEMUDDIN
AHMED BATLAY |
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| CARLOS
ALBERTO VELASQUEZ |
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| EBRAHIM
SIDAT |
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| A.K.M.
SAYEED |
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| A.
AZlZ EBRAHIM |
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| ZULFIQARALI
LAKHANI |
Chief Executive |
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| ADVISOR |
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| SULTANALl
LAKHANI |
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| COMPANY
SECRETARY |
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| RAMZANALI
HALANI |
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| AUDITORS |
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| EBRAHIM
& CO. |
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| Chartered
Accountants |
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| REGISTERED
OFFICE |
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| Lakson
Square, Building No. 2 |
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| Sarwar
Shaheed Road |
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| Karachi
- 74200 |
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| Pakistan |
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| FACTORIES |
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| Detergents,
Soap and Paste Units |
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| G-6,
S.I.T.E. Kotri |
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| Distt.
Dadu (Sindh) |
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| Pakistan |
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NOTICE OF MEETING |
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| NOTICE
IS HEREBY GIVEN that the 18th Annual General Meeting of Colgate-Palmolive
(Pakistan) |
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| Limited
will be held at Avari Renaissance Towers Hotel, Fatima Jinnah Road, Karachi
on Tuesday |
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| December
17, 1996 at 10.30 a.m. to transact the following business: |
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| ORDINARY
BUSINESS |
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| 1.
To receive, consider and adopt the audited Balance Sheet and Profit and Loss
Account for the |
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| period
of 18 months ended June 30, 1996 and the Directors' and Auditors' Reports
thereon. |
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| 2.
To declare a dividend by way of issue of fully paid bonus shares @ 18% i.e.
in the proportion of 9 |
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| shares
for every 50 existing shares as recommended by the Board of Directors. |
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| 3.
To appoint auditors and to fix their remuneration. |
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| SPECIAL
BUSINESS |
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| 4.
To consider to capitalise a sum of Rs. 16,583,400 by way of issue of
1,658,340 bonus shares of |
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| Rs.
10/- each and if thought fit to pass an ordinary resolution in the matter. |
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| 5.
To consider to increase the authorised capital of the Company from Rs. 100
million to Rs. 200 million |
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| and
if thought fit to pass a SPECIAL RESOLUTION in the matter. |
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| A
statement under section 160 of the Companies Ordinance, 1984 and drafts of
the ordinary/special |
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| resolutions
to be passed in the above matters are annexed. |
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By Order of the Board |
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| KARACHI:
November 17, 1996 |
RAMZANALI HALANI |
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|
Company Secretary |
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| NOTES: |
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| 1.
The share transfer books of the Company will remain closed from December 03,
1996 to December |
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| 17,
1996 both days inclusive. Transfers received in order at the registered
office of the Company |
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| upto
December 02, 1996 will be considered in time for entitlement of the bonus
shares. |
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| 2.
A member entitled to attend and vote at the general meeting may appoint
another member as his |
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| proxy
to attend, speak and vote instead of him. |
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| 3.
Forms of proxy to be valid must be received at the Company's registered
office not later than 48 |
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| hours
before the time of the meeting. |
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| 4.
Members are requested to notify the Company promptly of any change in their
addresses. |
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| 5.
Form of proxy is enclosed herewith. |
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|
STATEMENT UNDER SECTION
160 OF THE COMPANIES ORDINANCE, 1984 |
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| This
statement is annexed to the Notice of the Eighteenth Annual General Meeting
and sets out the |
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| material
facts concerning Special Business to be transacted at the meeting. |
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| In
order to declare a dividend by way of issue of fully paid bonus shares, the
Directors recommend |
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| to
issue bonus shares in the proportion of NINE shares for every FIFTY existing
shares held by the |
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| members.
For the purpose of issue of 1,658,340 bonus shares of Rs. 10/- each by way of |
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| capitalization
of a sum of Rs. 16,583,400 out of the reserve for issue of bonus shares, the
following |
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| resolution
will be considered to be passed, as an ordinary resolution: |
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| "RESOLVED
THAT: |
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| i)
a sum of Rs. 16,583,400 out of the reserve for issue of bonus shares be
capitalised and |
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| applied
in making payment in full of 1,658,340 ordinary shares of Rs. 10/- each and
that the |
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| said
shares be allotted as fully paid up bonus shares to those members of the
Company whose |
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| names
appear in the Register of members on December 02, 1996 @ 18% i.e. in the
proportion |
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| of
NINE shares for every FIFTY existing shares held and that such new shares
shall rank pari |
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| passu
as regards future dividends and in all other respects with the existing
ordinary shares |
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| of
the Company; |
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| ii)
in the event of any member holding less than 50 shares or a number of shares
which is not |
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| an
exact multiple of FIFTY, the fractional entitlement of shares of such members
shall be |
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| consolidated
into whole new shares and the Directors of the Company be and are hereby |
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| authorised
to arrange sale of the shares constituted thereby in such manner as they may
think |
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| fit
and to pay the proceeds of the sale to such of the members according to their
entitlement; |
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|
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| iii)
for the purpose of giving effect to the above matters, the Directors be and
are hereby |
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| authorised
to give such directions as may be necessary and to settle any question or |
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| difficulties
that may arise in regard to the distribution of the said new shares as they
think fit." |
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| The
Directors are interested in this business to the extent of their entitlement
of bonus shares as |
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| shareholders. |
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| II--
At present the authorised capital of the Company is Rs. 100,000,000 and the
paid-up capital is |
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| Rs.
92,130,050. The Directors recommend to increase the authorised capital to Rs.
200,000,000 |
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| to
facilitate increase in the paid-up capital as and when required to do so, and
if though fit by the |
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| members
to pass the following resolution as a SPECIAL RESOLUTION: |
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| "RESOLVED
that the authorised capital of the Company be and is hereby increased to |
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| Rs.
200,000,000 by creation of 10,000,000 new ordinary shares of Rs. 10/- each
and that clause V |
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| of
the Memorandum of Association be and is hereby substituted by the following
new clause: |
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| The
authorised capital of the company is Rs. 200,000,000/- (Rupees Two Hundred
Million) divided |
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| into
20,000,000 (Twenty Million) shares of Rs. 10/- (Rupees Ten) each. |
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| RESOLVED
FURTHER that Article 3 of the Articles of Association of the company be and
is hereby |
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| amended
to read as under: |
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| The
authorised capital of the company is Rs. 200,000,000/- (Rupees Two Hundred
Million) divided |
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| into
20,000,000 (Twenty Million) ordinary shares of Rs. 10/- (Rupees Ten)
each." |
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|
DIRECTORS' REPORT |
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| The
Directors of the Company are pleased to present their report together with
the Audited Accounts for the |
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| period
ended June 30, 1996. |
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|
Rupees in 000's |
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| Profit
after taxation |
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|
45,779 |
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| Unappropriated
profit brought forward |
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480 |
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--------- |
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| Profit
available for appropriation |
|
46,259 |
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| Appropriations |
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| Reserve
for proposed issue of bonus shares |
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| in
the ratio of 9 shares for every 50 shares |
16,583 |
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| Income
tax on bonus shares |
|
1,658 |
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| Transfer
to General Reserve |
|
27,500 |
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|
--------- |
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|
45,741 |
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|
--------- |
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| Unappropriated
profit carried forward |
|
518 |
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|
========= |
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OPERATING RESULTS |
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| The
audited accounts reflect the period of 18 months from January 1995 to June
1996 as per requirement |
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| of
Finance Act 1995 whereby the company has changed the Financial Year from
January - December to July- |
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| June. |
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| The
Company's operating results inspite of the difficult business environment
improved, showing increase |
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| in
all divisions, except for soaps. This is due to severe competative pressure
by local and imported brands. |
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| During
the 18 months period on an averaging out basis gross sales increased by
32.53% posting Rs. 1.348 |
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| billion
as compared to Rs. 0.678 billion in the last Annual Accounts. On the same
basis gross profit increased |
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| by
23.72% from the last Annual Accounts. Cummulatively for the 18 months gross
profit for the period |
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| amounted
to Rs. 260.487 million as compared to Rs. 140.364 million in the last Annual
Accounts. |
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| The
net profit for the one and a half year period amounted to Rs. 71.976 million
as compared to Rs. 33.569 |
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| million
of the previous Financial Year, evidencing the ongoing strength of the
company's core business and |
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| supporting
the confidence in Colgate-Palmolive's profitable growth in the future. |
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| Company's
sales and marketing initiatives lifted up the overall volume, revenues and
profits. The new product |
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| momentum
is maintained by the company year after year. Among new product rollouts, Max
Detergent Bar |
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| in
the dishwashing segment has been a big success generating higher sales
volumes and satisfactory profits. |
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| Colgate-Palmolive
expertise in marketing, coupled with advancement in technology allow the
company to |
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| grow
its brands and improve its strong sales and distribution functions even
further. The end result is; better |
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| satisfaction
for Colgate Customers. Company is focusing on higher levels of advertising
and improving |
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| quality
to satisfy consumers throughout the country. Actions to reinforce company
brands and gain higher |
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| market
shares will continue to receive major emphasis in the ongoing period. |
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| LOOKING
AHEAD |
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| The
company is presently under immense pressure due to legislated cost
escalations such as tax hikes, |
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| mounting
service and energy charges, steep and frequent increases in petroleum prices
and above all the |
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| massive
devaluation of the Pak Rupee. Higher selling prices (beyond elasticity) could
result in shrinkage of |
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| markets
and consumer spending. This predicament will receive our utmost attention. |
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| Skewed
income distribution and stagnant per capita incomes have forced the company
to keep a closer watch |
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| on
overall strategies. Moving towards radical business rationalisation, the
company plans to maximise |
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| production
and distribution synergies. This is to sustain growth levels in the coming
years. |
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| STAFF
RELATIONS |
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| The
company continues to provide training facility to enhance the productivity of
the employees. Besides |
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| this
improvement in benefits are also reviewed periodically. The directors are
pleased to record their |
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| appreciation
for the loyal & efficient services rendered by the management and staff,
in achieving the better |
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| results
for the company. |
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| AUDITORS |
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| The
Auditors M/s. Ebrahim & Co., Chartered Accountants retire and being
eligible, offer themselves for re- |
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| appointment. |
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| PATTERN
OF SHARE-HOLDING |
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| The
pattern of Share-Holding in the prescribed form is included in this report. |
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|
AUDITORS' REPORT TO THE
MEMBERS |
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| We
have audited the annexed balance sheet of COLGATE-PALMOLIVE (PAKISTAN)
LIMITED as at June |
|
| 30,
1996 and the related profit and loss account and statement of changes in
financial position together with |
|
| the
notes forming part thereof, for the eighteen months then ended and we state
that we have obtained all |
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| the
information and explanations which to the best of our knowledge and belief
were necessary for the |
|
| purposes
of our audit, and after due verification thereof, we report that: |
|
|
|
| a)
in our opinion, proper books of accounts have been kept by the Company as
required by the |
|
| Companies
Ordinance, 1984; |
|
|
| b)
in our opinion: |
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| i)
the balance sheet and profit and loss account togetherwith the notes thereon
have been |
|
| drawn
up in conformity with the Companies Ordinance, 1984 and are in agreement with
the |
|
| books
of accounts and are further in accordance with accounting policies
consistently |
|
| applied; |
|
|
|
| ii)
the expenditure incurred during the period was for the purpose of the
Company's business; |
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| and |
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|
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| iii)
the business conducted, investments made and the expenditure incurred during
the period |
|
| were
in accordance with the objects of the Company; |
|
|
|
| c)
in our opinion and to the best of our information and according to the
explanations given to us, the |
|
| balance
sheet, profit and loss account and the statement of changes in financial
position |
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| together
with the notes forming part thereof, give the information required by the
Companies |
|
| Ordinance,
1984 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, 1996 and of the profit and changes in
financial position for the |
|
| period
then ended; and |
|
|
| d)
in our opinion no Zakat was deductible at source under the Zakat and Ushr
Ordinance, 1980. |
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|
BALANCE SHEET |
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|
June 30, |
December 31, |
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|
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|
1996 |
1994 |
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|
Notes |
(Rs. in 000's) |
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| SHARE
CAPITAL AND RESERVES |
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| Authorised |
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|
|
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|
| 10,000,000 ordinary shares of Rs. 10 each |
|
100,000 |
100,000 |
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========= |
========= |
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| Issued,
subscribed and paid-up capital |
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3 |
92,131 |
81,894 |
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| Capital
reserves |
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4 |
13,456 |
13,456 |
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| Reserve
for issue of bonus shares |
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|
16,583 |
10,237 |
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| Revenue
reserves |
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|
5 |
64,018 |
36,480 |
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|
--------- |
--------- |
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|
186,188 |
142,067 |
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| REDEEMABLE
CAPITAL |
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|
6 |
|
1,827 |
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| LONG
TERM LOANS |
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|
7 |
|
87 |
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| LONG
TERM DEPOSITS |
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|
8 |
1,367 |
1,342 |
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| CURRENT
LIABILITIES |
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| Current
portion of long term liabilities |
9 |
913 |
5,676 |
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| Short
term loan and running finances |
|
10 |
88,485 |
88,619 |
|
| Creditors,
accrued and other liabilities |
11 |
122,038 |
58,206 |
|
| Dividends |
|
12 |
41 |
41 |
|
| Taxation |
|
13 |
9,355 |
9,510 |
|
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|
--------- |
--------- |
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|
220,832 |
162,052 |
|
|
|
| CONTINGENCIES
AND COMMITMENTS |
|
14 |
|
|
--------- |
--------- |
|
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|
408,387 |
307,375 |
|
|
========= |
========= |
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| NOTE:
The annexed notes form an integral part of these accounts. |
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| AS
AT JUNE 30, 1996 |
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|
| TANGIBLE
FIXED ASSETS |
|
15 |
74,103 |
69,020 |
|
|
| LONG
TERM LOANS AND ADVANCES |
|
16 |
1,118 |
340 |
|
| LONG
TERM DEPOSITS |
|
17 |
1,952 |
1,361 |
|
|
|
| CURRENT
ASSETS |
|
|
| Stores
and spares |
|
18 |
5,622 |
4,980 |
|
| Stock
in trade |
|
19 |
226,075 |
117,480 |
|
| Trade debts |
|
20 |
76,139 |
55,939 |
|
| Loans
and advances |
|
21 |
16,168 |
20,802 |
|
| Trade
deposits and short term prepayments |
22 |
3,710 |
1,118 |
|
| Other
receivables |
|
23 |
2,408 |
1,906 |
|
| Short
term investments |
|
24 |
- |
32,500 |
|
| Cash
and bank balances |
|
25 |
1,092 |
1,929 |
|
|
--------- |
--------- |
|
|
|
331,214 |
236,654 |
|
|
|
|
|
--------- |
--------- |
|
|
|
408,387 |
307,375 |
|
|
========= |
========= |
|
|
|
|
PROFIT AND LOSS ACCOUNT |
|
|
FOR THE EIGHTEEN MONTHS
ENDED JUNE 30, 1996 |
|
|
|
|
|
Eighteen |
Year Ended |
|
|
|
Months ended |
December 31, |
|
|
|
|
June 30, 1996 |
1994 |
|
|
|
|
Notes |
(Rs. in 000's) |
|
|
|
|
|
|
| Sales |
|
26 |
1,347,965 |
678,474 |
|
|
| Cost
of goods sold |
|
27 |
1,087,478 |
538,110 |
|
|
|
|
|
--------- |
--------- |
|
|
| Gross profit |
|
|
260,487 |
140,364 |
|
|
| Administrative
and selling expenses |
28 |
160,796 |
90,641 |
|
|
|
|
--------- |
--------- |
|
|
| Operating
profit |
|
|
99,691 |
49,723 |
|
|
| Other income |
|
29 |
9,903 |
4,044 |
|
|
|
|
--------- |
--------- |
|
|
|
|
109,594 |
53,767 |
|
|
|
|
|
|
|
| Financial
charges |
|
3O |
32,292 |
17,800 |
|
| Workers'
profit participation fund |
|
3,865 |
1,798 |
|
| Workers'
welfare fund |
|
1,461 |
60O |
|
|
--------- |
--------- |
|
|
|
37,618 |
20,198 |
|
|
|
--------- |
--------- |
|
| Net
profit for the period |
|
71,976 |
33,569 |
|
| Taxation |
|
|
|
|
| Current
period |
|
25,865 |
11,000 |
|
| Previous
year |
|
332 |
3,842 |
|
|
|
--------- |
--------- |
|
|
|
26,197 |
14,842 |
|
|
|
--------- |
--------- |
|
| Profit
after taxation |
|
45,779 |
18,727 |
|
| Unappropriated
profit brought forward |
|
48O |
990 |
|
|
--------- |
--------- |
|
| Profit
available for appropriation |
|
46,259 |
19,717 |
|
|
|
|
| Appropriation |
|
|
|
| Reserve
for proposed issue of |
|
|
|
| bonus
shares - 18% (1994: 12.5%) |
|
16,583 |
10,237 |
|
| Tax thereon |
|
1,658 |
- |
|
|
|
--------- |
--------- |
|
|
|
18,241 |
10,237 |
|
| Transfer
to general reserve |
|
27,500 |
9,000 |
|
|
--------- |
--------- |
|
|
|
45,741 |
19,237 |
|
|
--------- |
--------- |
|
| Unappropriated
profit carried forward |
|
518 |
48O |
|
|
|
|
========= |
========= |
|
|
|
|
|
|
| NOTE:
The annexed notes form an integral part of these accounts. |
|
|
|
|
|
STATEMENT OF CHANGES IN
FINANCIAL POSITION (CASH FLOW STATEMENT) |
|
|
FOR THE EIGHTEEN MONTHS
ENDED JUNE 30, 1996 |
|
|
|
|
Eighteen |
Year Ended |
|
|
|
Months ended |
December 31, |
|
|
|
June 30, 1996 |
1994 |
|
|
|
(Rs. in 000's) |
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
|
|
|
|
|
| Net
profit for the period |
|
|
71,976 |
33,569 |
|
| Adjustments
for items not involving movement of funds: |
|
|
|
|
|
|
| Depreciation |
|
|
12,801 |
8,148 |
|
|
|
|
|
| Amortization
of long term prepayments |
|
|
|
|
| and
deferred cost |
|
|
- |
158 |
|
|
|
|
|
| Profit
on sale of fixed assets |
|
|
(548) |
(270) |
|
|
|
--------- |
--------- |
|
|
|
|
84,229 |
41,605 |
|
| (Increase)/Decrease
in current assets |
|
|
|
|
| Stores
and spares |
|
|
(642) |
(2,369) |
|
| Stock
in trade |
|
|
(108,595) |
8,802 |
|
| Trade debts |
|
|
(20,200) |
(5,129) |
|
| Advances,
deposits and prepayments |
|
|
2,042 |
(14,598) |
|
| Other
receivables |
|
|
(5O2) |
(449) |
|
|
|
--------- |
--------- |
|
|
|
|
(127,897) |
(13,743) |
|
|
|
|
|
|
| Increase/(Decrease)
in current liabilities |
|
|
|
| Creditors, accrued and other liabilities |
|
63,832 |
3,396 |
|
|
|
--------- |
--------- |
|
| Net
cash from operating activities before tax |
|
20,164 |
31,258 |
|
| Tax paid |
|
|
(28,010) |
(3,745) |
|
|
|
|
--------- |
--------- |
|
| Net
cash from operating activities |
|
|
(7,846) |
27,513 |
|
|
|
|
|
|
|
|
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
|
|
| Addition
to fixed assets and capital |
|
|
|
| work
in progress |
|
|
(18,035) |
(7,643) |
|
| Long
term loans and advances |
|
|
(778) |
(134) |
|
| Long
term deposits |
|
|
(591) |
113 |
|
| Proceeds
from sale of fixed assets |
|
|
699 |
34O |
|
|
|
|
--------- |
--------- |
|
| Net
cash from investing activities |
|
|
(18,705) |
(7,324) |
|
|
|
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
|
|
| Redemption
of redeemable capital |
|
|
(6,241) |
(6,327) |
|
| Repayment
of long term loans |
|
|
(436) |
(1,298) |
|
| Short
term loan and running finances |
|
|
(134) |
21,287 |
|
| Long
term deposits |
|
|
25 |
(117) |
|
|
|
|
--------- |
--------- |
|
| Net
cash from financing activities |
|
|
(6,786) |
13,545 |
|
|
|
|
--------- |
--------- |
|
| Net
(decrease)/increase in cash and cash equivalents |
(33,337) |
33,734 |
|
|
|
|
|
|
| Cash
and cash equivalents at the beginning of the period |
34,429 |
695 |
|
|
|
|
--------- |
--------- |
|
| Cash
and cash equivalents at the end of the period |
|
1,092 |
34,429 |
|
|
========= |
========= |
|
|
|
|
|
NOTES TO THE ACCOUNTS |
|
|
|
|
FOR THE EIGHTEEN MONTHS
ENDED JUNE 30, 1996 |
|
|
|
|
| 1.
NATURE AND STATUS OF BUSINESS |
|
| The
Company was incorporated in Pakistan on December 5, 1977 as a public limited
Company and |
|
| its
shares are quoted on the stock exchanges in Pakistan. The Company is mainly
engaged in |
|
| manufacture
and sales of detergents, personal and other products. |
|
|
|
| 2.
SIGNIFICANT ACCOUNTING POLICIES |
|
| 2.1
Accounting year |
|
| Consequent
to the amendments announced in the Finance Act, 1995 regarding fixation of
the |
|
| fiscal
year as the income year, the company have changed their accounting year to
July - June. |
|
| As
a result the profit and loss account has been prepared for the eighteen
months period from |
|
| January
01, 1995 to June 30, 1996. |
|
|
| The
comparative figures are in respect of the year ended December 31, 1994, being
the last year |
|
