| Colgate-Palmolive (Pakistan) Limited |
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| Report
and Accounts July 1997-June 1998 |
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| In
the past 12 months, Colgate-Palmolive (Pakistan) Ltd. has been |
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| tremendous
change that can be attributed to a shift in consumer preferences |
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| and
the subsequent efforts of the company to cater to these changing |
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| needs.
Some of the highlights of the last year that should be mentioned are:- |
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| 1.
Focus on rural penetration. |
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| 2.
Introduction of smaller/low priced sizes. |
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| 3.
Launches of Brite 20g and Palmolive Sachet. |
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| 4.
Launch of Anti Bacterial range of scourers. |
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| 5.
Low price products launches such as Bonus Tristar. |
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| CONTENTS |
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| COMPANY
INFORMATION |
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| NOTICE
OF MEETING |
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| DIRECTORS'
REPORT |
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| AUDITORS'
REPORT |
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| BALANCE
SHEET |
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| PROFIT
AND LOSS ACCOUNT |
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| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
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| NOTES
TO THE ACCOUNTS |
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| YEARWISE
FINANCIAL HIGHLIGHTS |
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| PATTERN
OF HOLDING OF SHARES |
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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 |
|
| CARLOS
ALBERTO VELASQUEZ |
|
| EBRAHIM
SIDAT |
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| A.K.M.
SAYEIED |
|
| A.
AZIZ 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 |
|
| 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 20th Annual General Meeting of Colgate-Palmolive
(Pakistan) |
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| Limited
will be held on Thursday December 24, 1998 at 9.30 a.m. at Avari Towers
Hotel, Fatima Jinnah |
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| Road,
Karachi 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 year |
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| ended
June 30, 1998 and the Directors' and Auditors' reports thereon. |
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| 2.
To declare a dividend. |
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| 3.
To appoint Auditors and to fix their remuneration. |
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| 4.
To elect seven Directors as fixed by the Board of Directors for a term of
three years commencing |
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| from
March 10, 1999, in accordance with the provisions of the Companies Ordinance,
1984. The |
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| retiring
Directors namely M/s. Iqbalali Lakhani, Zulfiqarali Lakhani, Tasleemuddin
Ahmed Batlay, |
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| Carlos
Alberto Velasquez, Ebrahim Sidat, A.K.M. Sayeed and A. Aziz Ebrahim are
eligible for re-election. |
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| SPECIAL
BUSINESS |
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| 5.
To consider and approve the remuneration and allowances of the full time
working Directors. |
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| The
statement under section 160 of the Companies Ordinance, 1984 and the draft of
the ordinary |
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| resolution
to be passed in the above matter are annexed. |
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|
By Order of the Board |
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|
RAMZANALI HALANI |
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| KARACHI:
November 16, 1998 |
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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
11,1998 to December |
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| 24,
1998 both days inclusive. Transfers received in order at the Registered
Office of the Company |
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| situated
at Lakson Square, Building No. 2, Sarwar Shaheed Road, Karachi upto December
10, 1998 |
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| will
be considered in time for entitlement of the dividend. |
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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 by the Company not later than 48
hours before the time |
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| 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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| The
shareholders' approval will be sought for the payment of remuneration to the
full time working Directors |
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| as
recommended by the Board of Directors of the Company. For this purpose, the
following ordinary |
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| resolution
will be moved at the meeting: |
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|
| "RESOLVED
that the following full time working Directors be and are hereby authorised
to draw |
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| remuneration
and avail perquisites and allowances as under for the next term of three
years with effect from |
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| March
10, 1999: |
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| (1)
Mr. Zulfiqarali Lakhani |
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| Remuneration: |
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Gross aggregate annual
sum not exceeding |
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|
Rs. 3,000,000 (Rupees
three million only) as may be |
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|
determined by the
Chairman from year to year. (This |
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|
will include house rent
allowance). |
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| Telephone,
Electricity, Gas and |
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| Water
at residence: |
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Bills at actuals. |
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| Conveyance: |
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Company maintained car
with driver. |
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| Provident
Fund, Bonus, |
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| Medical
and Leave: |
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As per Company's policy,
rules and regulations inforce |
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|
from time to time. |
|
|
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| (2)
Mr. Tasleemuddin Ahmed Batlay |
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| Remuneration: |
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Gross aggregate annual
sum not exceeding |
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|
Rs. 2,000,000 (Rupees two
million only) as may be |
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|
determined by the
Chairman from year to year. (This |
|
|
will include house rent
allowance). |
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|
|
| Conveyance,
Provident Fund, |
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| Bonus,
Medical, Leave and |
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| Telephone at residence: |
|
As per Company's policy,
rules and regulations inforce |
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|
from time to time." |
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| The
aforesaid full time working Directors are interested in this business to the
extent of their respective |
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| remunerations,
perquisites and allowances. |
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| DIRECTORS'
REPORT |
|
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| The
Directors of the Company present their report together with the audited
accounts for the year |
|
| ended
June 30, 1998. |
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|
Rupees in 000's |
|
|
| Profit
after taxation |
|
29,943 |
|
| Unappropriated
profit brought forward |
|
503 |
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|
-------------- |
|
| Profit
available for appropriation |
|
30,446 |
|
| Appropriations. |
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| Proposed
dividend @ 12.5% |
|
15,288 |
|
| Transfer
to General Reserve |
|
14,000 |
|
|
-------------- |
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|
29,288 |
|
|
-------------- |
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| Unappropriated
profit carried forward |
|
1,158 |
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|
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|
========== |
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| OPERATING
RESULTS |
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| The
gross sales achieved during the year was Rs. 1.129 billion as compared to Rs.
1.056 billion of |
|
| last
year, showing an increase of 7%. A changing economy and market dynamics
dictated the |
|
| previous
year's strategy for CPPL. As the lower and middle class masses saw the
shrinking of their |
|
| disposable
incomes, companies found it increasingly challenging to maintain a stable
growth |
|
| pattern.
However, it proved to be a sustainable year for CPPL. |
|
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| In
March 1998, the benefit translated from the reduction in the sales tax was
passed onto the |
|
| consumer
through a decrease in selling prices. This action affected the overall
revenue of the |
|
| company. |
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| A
re-alignment of some of CPPL-'s core marketing philosophies dictated a shift
from upscale |
|
| marketing
to down scale deep root penetration' and bringing quality CP products into a
more |
|
| affordable
bracket within the reach of the mass consumer. Smaller pack sizes such as the
Brite 20. |
|
| grams
and Palmolive 75 grams sachets, and price-off promotions on packs such as the
Colgate 70 |
|
| grams
were introduced. In addition, careful analysis of the lower end market saw
the evolution of |
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| affordable
products such as our Bonus Tristar detergent powder. |
|
|
| During
the past months, equally exhaustive efforts were made to discover and align
the urban |
|
| consumers'
preferences and needs. In view of the growing awareness of hygiene and
cleanliness, |
|
| the
Max anti-bacterial range was launched and successfully tried by consumers. |
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|
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| During
the year under review, strong competition was faced in the fabric care
category leading to |
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| high
media expenses which increased nearly 36% over the corresponding year. |
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|
| PROSPECTS |
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| With
certain imbalances in policies of the government the import of finished
products is facilitated |
|
| rather
than the production of these consumer products locally. With the duties on
finished goods |
|
| equal
to that of their raw materials, it is becoming increasingly difficult for
companies to manufacture |
|
| locally
when there exists such an attractive option for imports. |
|
|
| With
competition bringing in comparable imported goods, it poses a threat to
locally manufactured |
|
| products
such as our own, a result of which has been volume erosion in some of our
major brands. |
|
|
| Economically
the situation in Pakistan has not improved much and it is in-fact now
becoming harder |
|
| for
raw material importers to get their L/Cs confirmed. This will prove to be
adverse for the overall |
|
| performance
and growth of' the company. |
|
|
| The
results of this past year shows, the marketing efforts of the company geared
towards rural. |
|
| penetration
which was a step in the right direction. Similarly, the coming year shall see
CP continuing |
|
| in
its efforts to reach and fulfill the needs of the rural consumer, keeping in
mind a separate strategy |
|
| commensurate
with the changing lifestyle of the urban consumer. |
|
|
| STAFF
RELATIONS |
|
| Company's
programmes of in-house training as well as from outside sources is continuing
and in this |
|
| connection,
we appreciate the contribution of Colgate-Palmolive Company, USA. The
Directors are |
|
| pleased
to record their appreciation for the efforts and dedication of the Staff and
Management in |
|
| achieving
profitability during the difficult periods. |
|
|
| YEAR
2000 COMPLIANCE |
|
| The
Management had initiated early action to ensure smooth transition into the
year 2000. For this |
|
| purpose,
changes in computer hardware and other related equipment as well as systems
and |
|
| programs
are all expected to be completed by 31 December 1998. The Company had also
alerted |
|
| its
major Customers, Suppliers and Financial Institutions for ensuring the
updating of their systems |
|
| with
respect to our business with them. These are all designed to ensure that
interruptions in the |
|
| business
dealings and programmes of the Company do not take place. With a co-ordinated |
|
| approach,
the ushering in of the changes for the start of the next millennium will be
smooth. |
|
|
| AUDITORS |
|
| M/s.
Ebrahim & Co., Chartered Accountants, the retiring Auditors of the
Company being eligible |
|
| have
offered themselves for re-appointment. |
|
|
| PATTERN
OF SHARE-HOLDING |
|
| The
Share-Holding pattern in the prescribed form is given in this report. |
|
|
|
On behalf of Board of Directors |
|
|
|
|
|
IQBALALI LAKHANI |
|
| Karachi:
November 10, 1998 |
|
Chairman |
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of COLGATE-PALMOLIVE (PAKISTAN)
LIMITED as |
|
| at
June 30, 1998 and the related profit and loss account and statement of
changes in financial |
|
| position
together with the notes forming part thereof, for the year then ended 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 purpose 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: |
|
|
| i)
the balance sheet and profit and loss account together with 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 year was for the purpose of the Company's |
|
| business;
and |
|
|
| iii)
the business conducted, investments made and the expenditure incurred during
the |
|
| year
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
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, 1998 and of profit and
changes |
|
| in
financial position for the year then ended; and |
|
|
| d)
in our opinion no Zakat was deductible at source under the Zakat and Ushr
Ordinance, 1980. |
|
|
|
EBRAHIM & CO. |
|
| Karachi:
November 10,1998 |
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET |
|
| AS
AT JUNE 30, 1998 |
|
|
|
Notes |
1998 |
1997 |
|
|
(Rs. in 000's) |
|
|
| TANGIBLE
FIXED ASSETS |
|
3 |
107,202 |
101,820 |
|
| LONG
TERM LOANS |
|
4 |
1,210 |
1,394 |
|
| LONG
TERM DEPOSITS |
|
5 |
4,175 |
4,239 |
|
| CURRENT
ASSETS |
|
|
|
| Stores
and spares |
|
6 |
5,848 |
6,834 |
|
| Stock
in trade |
|
7 |
172,391 |
189,554 |
|
| Trade debts |
|
8 |
82,901 |
72,507 |
|
| Loans
and advances |
|
9 |
13,566 |
12,315 |
|
| Trade
deposits and short term prepayments |
10 |
8,282 |
4,214 |
|
| Other
receivables |
|
11 |
2,639 |
583 |
|
| Cash
and bank balances |
|
12 |
81,983 |
1,425 |
|
|
|
--------------- |
--------------- |
|
|
|
367,610 |
287,432 |
|
| CURRENT
LIABILITIES |
|
|
|
| Current
portion of long term liabilities |
13 |
2,842 |
282 |
|
| Short
term loans and running finances |
14 |
114,652 |
50,029 |
|
| Creditors,
accrued and other liabilities |
15 |
81,440 |
83,893 |
|
| Dividends |
|
16 |
15,326 |
36 |
|
| Taxation |
|
17 |
-- |
7,354 |
|
|
|
--------------- |
--------------- |
|
|
|
214,260 |
141,594 |
|
|
|
--------------- |
--------------- |
|
| NET
CURRENT ASSETS |
|
|
153,350 |
145,838 |
|
|
|
--------------- |
--------------- |
|
|
|
265,937 |
253,291 |
|
|
|
========== |
========== |
|
|
|
|
| FINANCED
BY : |
|
| CAPITAL
AND RESERVES |
|
| Share
capital |
|
18 |
122,303 |
108,714 |
|
| Capital
reserve |
|
19 |
13,456 |
13,456 |
|
| Reserve
for issue of bonus shares |
|
|
-- |
13,590 |
|
| Revenue
reserves |
|
20 |
103,158 |
88,503 |
|
|
|
--------------- |
--------------- |
|
| Shareholders'
equity |
|
|
238,917 |
224,263 |
|
| LIABILITIES
AGAINST ASSETS SUBJECT |
|
|
|
| TO
FINANCE LEASES |
|
21 |
24,102 |
26,944 |
|
|
|
|
| DEFERRED
LIABILITY |
|
22 |
1,284 |
634 |
|
| LONG
TERM DEPOSITS |
|
23 |
1,634 |
1,450 |
|
| CONTINGENCIES
AND COMMITMENTS |
|
24 |
-- |
-- |
|
|
--------------- |
--------------- |
|
|
265,937 |
253,291 |
|
|
========== |
========== |
|
|
|
|
| NOTE:
The annexed notes form an integral part of these accounts. |
|
|
|
ZULFIQARALI LAKHANI |
|
TASLEEMUDDIN A. BATLAY |
|
|
Chief Executive |
|
Director |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 1998 |
|
|
|
Notes |
1998 |
1997 |
|
|
(Rs. in 000's) |
|
|
| Sales |
|
25 |
1,078,617 |
1,016,921 |
|
| Cost
of goods sold |
|
26 |
845,587 |
804,267 |
|
|
|
--------------- |
--------------- |
|
| Gross
profit |
|
|
233,030 |
212,654 |
|
| Administrative
and selling expenses |
|
27 |
167,673 |
136,495 |
|
|
|
--------------- |
--------------- |
|
| Operating
profit |
|
|
65,357 |
76,159 |
|
| Other
income |
|
28 |
5,125 |
4,656 |
|
|
|
--------------- |
--------------- |
|
|
|
70,482 |
80,815 |
|
|
|
--------------- |
--------------- |
|
| Financial
charges |
|
29 |
19,257 |
17,821 |
|
| Workers'
profit participation fund |
|
|
2,561 |
3,150 |
|
| Workers'
welfare fund |
|
|
1,018 |
1,240 |
|
|
|
--------------- |
--------------- |
|
|
|
22,836 |
22,211 |
|
|
|
--------------- |
--------------- |
|
| Net
profit for the year |
|
|
47,646 |
58,604 |
|
| Taxation |
|
30 |
17,703 |
20,529 |
|
|
|
--------------- |
--------------- |
|
| Profit
after taxation |
|
|
29,943 |
38,075 |
|
| Unappropriated
profit brought forward |
|
503 |
518 |
|
|
|
--------------- |
--------------- |
|
| Profit
available for appropriation |
|
|
30,446 |
38,593 |
|
| Appropriations |
|
|
|
| Proposed
dividend @ 12.5% (1997: Nil) |
|
15,288 |
-- |
|
|
|
|
| Reserve
for proposed issue of |
|
|
|
| bonus
shares Nil (1997: 12.5%) |
|
|
-- |
13,590 |
|
|
|
|
| Transfer
to general reserve |
|
|
14,000 |
24,500 |
|
|
|
--------------- |
--------------- |
|
|
|
29,288 |
38,090 |
|
|
|
--------------- |
--------------- |
|
| Unappropriated
profit carried forward |
|
1,158 |
503 |
|
|
========== |
========== |
|
|
| NOTE:
The annexed notes form an integral part of these accounts. |
|
|
|
ZULFIQARALI LAKHANI |
|
TASLEEMUDDIN A. BATLAY |
|
|
Chief Executive |
|
Director |
|
|
|
|
| STATEMENT
OF CHANGES IN FINANCIAL POSITION |
|
| (CASH
FLOW STATEMENT) |
|
| FOR
THE YEAR ENDED JUNE 30, 1998 |
|
|
|
1998 |
1997 |
|
|
(Rs. in 000's) |
|
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
| Net
profit for the year |
|
47,646 |
58,604 |
|
| Adjustments
for items not involving movement of funds: |
|
|
| Depreciation |
|
12,537 |
12,352 |
|
| Profit
on sale of fixed assets |
|
(374) |
(77) |
|
|
--------------- |
--------------- |
|
|
59,809 |
70,879 |
|
|
|
|
| Decrease
/ (Increase) in Current Assets |
|
| Stores
and spares |
|
986 |
(1,212) |
|
| Stock
in trade |
|
17,163 |
36,521 |
|
| Trade debts |
|
(10,394) |
3,632 |
|
| Loans
and advances |
|
7,673 |
3,853 |
|
| Trade
deposits and short term prepayments |
|
(4,068) |
(504) |
|
| Other
receivables |
|
(2,056) |
1,825 |
|
|
--------------- |
--------------- |
|
|
9,304 |
44,115 |
|
|
| (Decrease)
in Current Liabilities |
|
|
| Creditors,
accrued and other liabilities |
|
(2,453) |
(38,145) |
|
|
--------------- |
--------------- |
|
| Net
cash from operating activities before tax |
|
66,660 |
76,849 |
|
| Tax paid |
|
(33,332) |
(21,896) |
|
|
--------------- |
--------------- |
|
| Net
cash from operating activities |
|
33,328 |
54,953 |
|
|
|
|
1998 |
1997 |
|
|
(Rs. in 000's) |
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
| Addition
to fixed assets and capital work in progress |
(18,292) |
(40,245) |
|
| Long
term loans |
|
184 |
(276 |
|
| Long
term deposits |
|
64 |
(2,287 |
|
| Proceeds
from sale of fixed assets |
|
747 |
253 |
|
|
--------------- |
--------------- |
|
| Net
cash from investing activities |
|
(17,297) |
(42,555) |
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
| Finance
obtained on sale and leaseback |
|
-- |
27,450 |
|
| Redemption
of redeemable capital |
|
-- |
(913) |
|
| Repayment
of liabilities against finance lease |
|
(282) |
(224) |
|
| Short
term loans and running finances |
|
64,623 |
(38,456) |
|
| Dividend |
|
2 |
(5) |
|
| Long
term deposits |
|
184 |
83 |
|
|
--------------- |
--------------- |
|
| Net
cash from financing activities |
|
64,527 |
(12,065) |
|
|
--------------- |
--------------- |
|
| Net
increase / (decrease) in cash and cash equivalents |
80,558 |
333 |
|
| Cash
and cash equivalents at the beginning of the year |
1,425 |
1,092 |
|
|
--------------- |
--------------- |
|
| Cash
and cash equivalents at the end of the year |
|
81,983 |
1,425 |
|
|
|
|
|
========== |
========== |
|
|
|
ZULFIQARALI LAKHANI |
|
TASLEEMUDDIN A. BATLAY |
|
|
Chief Executive |
|
Director |
|
|
|
| NOTES
TO THE ACCOUNTS |
|
| FOR
THE YEAR ENDED JUNE 30, 1998 |
|
|
| 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
Cost convention |
|
| These
accounts have been prepare |
