| Colgate-Palmolive (Pakistan) Limited |
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| Annual
Report 2001 |
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| CONTENTS |
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| COMPANY
INFORMATION |
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| NOTICE
OF MEETING |
|
| FINANCIAL
SUMMARY |
|
| DIRECTORS'
REPORT |
|
| AUDITORS'
REPORT |
|
| BALANCE
SHEET |
|
| PROFIT
AND LOSS ACCOUNT |
|
| STATEMENT
OF VALUE ADDED |
|
| CASH
FLOW STATEMENT |
|
| STATEMENT
OF CHANGES IN EQUITY |
|
| 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 |
|
|
| BOARD
OF DIRECTORS |
|
| IQBALALI
LAKHANI |
Chairman |
|
| AMIN
MOHAMMED LAKHANI |
|
| TASLEEMUDDIN
AHMED BATLAY |
|
| SOREN
PETER DAM |
|
| EBRAHIM
SIDAT |
|
| RAMZAN
ALI HALANI |
|
| ZULFIQAR
ALI LAKHANI |
Chief Executive |
|
|
| ADVISOR |
|
| SU
LTANALI LAKHANI |
|
|
| COMPANY
SECRETARY |
|
| RAMZAN
ALI HALANI |
|
|
| AUDITORS |
|
| EBRAHIM
& CO. |
|
| Chartered
Accountants |
|
|
| REGISTERED
OFFICE |
|
| Lakson
Square, Building No. 2 |
|
| Sarwar
Shaheed Road |
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| Karachi - 74200 |
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| Pakistan |
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|
| FACTORIES |
|
| 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 23rd Annual General Meeting of Colgate-Palmolive |
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| (Pakistan)
Limited will be held on Wednesday December 12, 2001 at
10.00 a.m. at Avari Towers |
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| Hotel,
Fatima Jinnah Road, Karachi to transact the following business: |
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| 1.
To receive, consider and adopt the audited Balance Sheet, Profit and Loss
Account for the |
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| year
ended June 30, 2001 together with the Directors' and Auditors' Reports
thereon. |
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|
| 2.
To declare final dividend @35% as recommended by the Board of Directors. |
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| 3.
To consider to appoint Auditors and fix their remuneration. |
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By order of the Board |
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|
RAMZAN ALI HALANI |
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| Karachi:
October 25, 2001 |
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Director/Company Secretary |
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| NOTES: |
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| 1.
The share transfer books of the Company will remain closed from December 01,
2001 to |
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| December
12, 2001 both days inclusive. Transfers received in order at the company's
registered |
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| office
situated at Lakson Square, Building No. 2, Sarwar Shaheed Road, Karachi upto |
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| November
30, 2001 will be considered in time to be eligible for payment of the final
dividend |
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| to
the transferees. |
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|
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| 2.
A member who has deposited his/her shares into Central Depository Company of
Pakistan |
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| Limited,
must bring his/her participant's ID number and account/sub-account number
alongwith |
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| original
National Identity Card (NIC) or original Passport at the time of attending
the meeting. |
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|
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| 3.
A member entitled to attend and vote at the general meeting may appoint
another member as |
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| his/her
proxy to attend, speak and vote instead of him/her. |
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| 4.
If a proxy is granted by a member who has deposited his/her shares in Central
Depository |
|
| Company
of Pakistan Limited, the proxy must be accompanied with participant's ID
number |
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| and
account/sub-account number alongwith attested photocopies of NIC or the
Passport of |
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| the
beneficial owner. Representatives of corporate members should bring the usual
documents |
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| required
for such purpose. |
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|
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| 5.
Forms of proxy to be valid must be received at the Company's Registered
Office not later |
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| than
48 hours before the time of the meeting. |
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|
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| 6.
Members are requested to notify the Company promptly of any change in their
addresses. |
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| 7.
Form of proxy is enclosed herewith. |
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|
| FINANCIAL
SUMMARY |
|
| Year
ended June 30, 2001 |
|
|
|
Years ended June 30 |
|
|
| Rupees
in millions except EPS |
|
|
|
1999 |
2000 |
% Change |
2001 |
% Change |
|
|
| Net Sales |
|
1,198 |
1,520 |
26.8% |
1,951 |
28.4% |
|
| Operating Profit |
|
85 |
108 |
26.7% |
168 |
55.9% |
|
| Net
Profit After Tax |
46 |
59 |
27.4% |
95 |
63.0% |
|
| Earning
Per Share (Rs.) |
3.75 |
4.78 |
27.5% |
7.80 |
63.2% |
|
| Shareholders'
Equity |
260 |
282 |
8.4% |
335 |
18.6% |
|
|
|
| DIRECTORS'
REPORT |
|
|
| The
Directors are pleased to present Audited accounts for the year ended June 30,
2001 alongwith the |
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| report
on performance of the company. |
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|
|
Rupees in 000's |
|
|
| Profit
after taxation |
|
|
95,336 |
|
| Unappropriated
profit brought forward |
|
1,415 |
|
|
|
|
------------------ |
|
| Profit
available for appropriation |
|
|
96,751 |
|
|
|
|
|
|
| Appropriations |
|
|
|
| Proposed
cash dividend @ 35% |
|
|
42,806 |
|
| Transfer
to General Reserve |
|
|
50,000 |
|
|
|
|
------------------ |
|
|
|
|
92,806 |
|
|
|
|
------------------ |
|
| Unappropriated
profit carried forward |
|
3,945 |
|
|
|
|
========== |
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|
| OPERATING
RESULTS |
|
| We
are pleased to state that despite several odds and conditions of drought,
which had threatened the |
|
| stability
of Pakistan's economic performance during the year under report, your company
was able to |
|
| drive
up gross sales to over Rs. 2.4 billion. |
|
|
| Efforts
are underway towards closely focusing on achievable growth levels so as to
deliver sustained |
|
| values
to our shareholders. The appreciable rise of 63.18% in earning per share from
Rs. 4.78 to Rs. |
|
| 7.80
over the previous year is a manifestation of this approach. During the year
our operating profit also |
|
| increased
from Rs. 107.920 million to Rs. 168.062 million, showing an increase of
55.73%, while net |
|
| profit
before tax increased by 55.20% from Rs. 91.037 million to Rs. 141.293-million
over the previous |
|
| year. |
|
|
| Continuing
expansion in our distribution coverage, direct consumer contacts, continued
emphasis on |
|
| production
cost savings and increased efficiencies has been our fundamental policy. This
strategy has |
|
| dovetailed
with new product introductions and extensive investment on the electronic
media for our |
|
| existing
core brands. The result is clearly visible in the continuing increase in our
market share. |
|
|
| PROPELLING
GROWTH THROUGH INNOVATIVE PRODUCTS |
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| Our
new products launches have also significantly contributed to our growth. The
company remains |
|
| committed
to use every opportunity' in the market place in this direction. We are happy
to report that |
|
| Colgate
Fresh Energy Gel was launched for the fast 'growing segment of young adults
who are more |
|
| conscious
of oral care concerns. |
|
|
| In
the area of our brand portfolio building strategy, we successfully acquired
the Sparkle toothpaste |
|
| brand,
which is popular with the cost conscious segment of the market. The
acquisition has reinforced |
|
| our
strengths in the oral care sector while pushing up our market presence and
product category share. |
|
|
| The
launch of Palmolive Natural soap in September has also generated considerable
consumer trial |
|
| indicating
a sustainable share in this popular segment. |
|
|
| BUILDING
LONG TERM CONSUMER RELATIONSHIPS |
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| The
company is ongoing with plans to involve our target consumers to establish a
long term relationship |
|
| with
them. The Global Art Contest, organized by Colgate, imparted knowledge to
children about oral |
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| hygiene
and the same time channeled their creative talent. |
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| FUTURE
OUTLOOK |
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| Pakistan
is passing through the most critical of times in its history which are likely
to impact the overall |
|
| economic
situation resulting in a period of uncertainties whereby consumer demand and
supply scenarios |
|
| cannot
be accurately assessed. Pressures on costs for war risk insurance, etc., may
also show up in |
|
| some
measure. However your company is optimistic that conditions will soon
stabilize and our strong |
|
| presence
in market will provide the needed support to tide over the crises with
reasonable success. |
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|
| HUMAN
RESOURCE DEVELOPMENT |
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| The
Directors appreciate the executives and staff for their loyalty and
dedication. We view our employees |
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| as
a valued asset and aim to make Colgate Palmolive the best place to work. |
|
|
| CONTRIBUTION
TO THE NATIONAL ECONOMY |
|
| Our
company has contributed to the national economy in terms of duties and taxes
during the year |
|
| amounting
to Rs. 515 million, an increase of 29.4% over last year. |
|
|
| AUDITORS |
|
| M/s
Ebrahim & Co, Chartered Accountants, the existing Auditors of the company
have offered themselves |
|
| for
re-appointment. |
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|
| ACKNOWLEDGEMENT |
|
| We
would like to thank all business partners, suppliers, bankers, consumers and
other stakeholders for |
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| their
support and trust. |
|
|
| PATTERN
OF SHAREHOLDING |
|
| A
pattern of shareholding of the company as at June 30, 2001 is included. |
|
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|
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|
On behalf of Board of Directors |
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|
|
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|
IQBAL ALI LAKHANI |
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| Karachi:
October 15, 2001 |
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|
Chairman |
|
|
|
| AUDITORS'
REPORTTO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of COLGATE-PALMOLIVE (PAKISTAN)
LIMITED as at |
|
| June
30, 2001 and the related profit and loss account, cash flow statement and
statement of changes in |
|
| equity
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 purposes of our audit. |
|
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| It
is the responsibility of the Company's management to establish and maintain a
system of internal |
|
| control,
and prepare and present the above said statements in conformity with the
approved accounting |
|
| standards
and the requirements of the Companies Ordinance, 1984. Our responsibility is
to express an |
|
| opinion
on these statements based on our audit. |
|
|
| We
conducted our audit in accordance with the auditing standards as applicable
in Pakistan. These |
|
| standards
require that we plan and perform the audit to obtain reasonable assurance
about whether the |
|
| above
said statements are free of any material misstatement. An audit includes
examining, on a test |
|
| basis,
evidence supporting the amounts and disclosures in the above said statements.
An audit also |
|
| includes
assessing the accounting policies and significant estimates made by
management, as well as, |
|
| evaluating
the overall presentation of above said statements. We believe that our audit
provides a |
|
| reasonable
basis for our opinion and, after due verification, we report that: |
|
|
| (a)
in our opinion, proper books of account 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 togetherwith the notes thereon
have been |
|
| drawn
up in conformity with the Companies Ordinance, 1984, and are in agreement
with the |
|
| books
of account 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, cash flow statement and statement of changes
in equity |
|
| together
with the notes forming part thereof conform with approved accounting
standards as |
|
| applicable
in Pakistan, and, 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, 2001 and of the profit, its cash flows and changes in equity
for the year then |
|
| ended; and |
|
|
| d)
in our opinion, Zakat deductible at source under the Zakat and Ushr
Ordinance, 1980 was deducted |
|
| by
the Company and deposited in the Central Zakat Fund established under Section
7 of that |
|
| Ordinance. |
|
|
|
|
|
|
|
|
|
|
|
|
EBRAHIM & CO. |
|
| Karachi:
October 15, 2001 |
|
|
Chartered Accountants |
|
|
|
| BALANCE
SHEET AS AT JUNE 30, 2001 |
|
|
|
|
Note |
2001 |
2000 |
|
|
|
|
(Rs. in
000's) |
|
|
|
|
| TANGIBLE
FIXED ASSETS |
|
3 |
173,610 |
147,719 |
|
| INTANGIBLE
ASSETS |
|
4 |
45,251 |
-- |
|
| LONG
TERM LOANS |
|
5 |
1,798 |
1,745 |
|
| LONG
TERM DEPOSITS AND PREPAYMENTS |
6 |
3,387 |
5,057 |
|
|
|
|
|
|
| CURRENT
ASSETS |
|
|
|
|
| Stores
and spares |
|
7 |
8,728 |
10,650 |
|
| Stock in trade |
|
8 |
301,161 |
246,279 |
|
| Trade debts |
|
9 |
153,598 |
94,839 |
|
| Loans
and advances |
|
10 |
11,351 |
6,356 |
|
| Trade
deposits and short term prepayments |
11 |
8,888 |
8,252 |
|
| Other
receivables |
|
12 |
18,353 |
16,763 |
|
| Cash
and bank balances |
|
13 |
28,614 |
2,232 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
530,693 |
385,371 |
|
|
|
|
| CURRENT
LIABILITIES |
|
|
|
| Current
portion of long term liabilities |
14 |
12,775 |
7,932 |
|
| Short
term loan and running finances |
15 |
126,162 |
51,700 |
|
| Creditors,
accrued and other liabilities |
16 |
175,035 |
141,771 |
|
| Dividends |
|
17 |
43,074 |
36,794 |
|
| Provisions
for taxation |
|
|
5,160 |
1,835 |
|
|
------------------ |
------------------ |
|
|
|
|
362,206 |
240,032 |
|
|
|
|
------------------ |
------------------ |
|
| NET
CURRENT ASSETS |
|
|
168,487 |
145,339 |
|
|
------------------ |
------------------ |
|
|
|
392,533 |
299,860 |
|
|
|
========== |
========== |
|
|
|
|
| FINANCED BY: |
|
|
|
|
| CAPITAL
AND RESERVES |
|
|
|
| Share capital |
|
18 |
122,303 |
122,303 |
|
| Capital reserve |
|
19 |
13,456 |
13,456 |
|
| Revenue
reserves |
|
20 |
198,945 |
146,415 |
|
| Shareholders'
equity |
|
|
334,704 |
282,174 |
|
| LONG
TERM LOAN |
|
21 |
46,875 |
-- |
|
|
|
|
|
|
| LIABILITIES
AGAINST ASSETS SUBJECT |
|
|
| TO
FINANCE LEASES |
|
22 |
-- |
9,650 |
|
|
|
|
|
|
|
| DEFERRED
LIABILITY |
|
23 |
8,240 |
5,843 |
|
| LONG
TERM DEPOSITS |
|
24 |
2,714 |
2,193 |
|
| CONTINGENCIES
AND COMMITMENTS |
25 |
|
|
|
------------------ |
------------------ |
|
|
|
392,533 |
299,860 |
|
|
|
========== |
========== |
|
|
| NOTE:
The annexed notes form an integral part of these accounts. |
|
|
|
ZULFIQAR ALI LAKHANI |
|
|
RAMZAN ALI HALANI |
|
|
Chief Executive |
|
|
Director |
|
|
|
| PROFIT
AND LOSS ACCOUNT |
|
| FOR
THE YEAR ENDED JUNE 30, 2001 |
|
|
|
Note |
2000 |
2001 |
|
|
|
(Rs. in
000's) |
|
|
|
|
| Sales |
|
26 |
1,950,961 |
1,519,711 |
|
| Cost
of goods sold |
|
27 |
1,407,544 |
1,106,737 |
|
|
|
|
------------------ |
------------------ |
|
| Gross profit |
|
|
543,417 |
412,974 |
|
| Administrative
and selling expenses |
28 |
375,355 |
305,054 |
|
|
|
|
------------------ |
------------------ |
|
| Operating profit |
|
|
168,062 |
107,920 |
|
| Other income |
|
29 |
4,284 |
4,691 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
172,346 |
112,611 |
|
|
|
|
------------------ |
------------------ |
|
| Financial
charges |
|
30 |
17,979 |
14,701 |
|
| Other charges |
|
31 |
13,074 |
6,873 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
31,053 |
21,574 |
|
|
------------------ |
------------------ |
|
| Net
profit for the year |
|
|
141,293 |
91,037 |
|
| Taxation |
|
32 |
45,957 |
32,533 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
after taxation |
|
|
95,336 |
58,504 |
|
| Unappropriated
profit brought forward |
|
1,415 |
1,602 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
available for appropriation |
|
|
96,751 |
60,106 |
|
|
|
|
|
|
| Appropriations |
|
|
| Proposed
final dividend at 35% (2000: 30%) |
|
42,806 |
36,691 |
|
| Transfer
to general reserve |
|
|
50,000 |
22,000 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
92,806 |
58,691 |
|
|
|
|
------------------ |
------------------ |
|
| Unappropriated
profit carried forward |
|
3,945 |
1,415 |
|
|
|
|
========== |
========== |
|
| EARNINGS
PER SHARE |
|
33 |
Rs. 7.80 |
Rs. 4.78 |
|
|
|
========== |
========== |
|
|
|
|
| NOTE:
The annexed notes form an integral part of these accounts. |
|
|
|
|
|
ZULFIQAR ALI LAKHANI |
|
|
RAMZAN ALI HALANI |
|
|
Chief Executive |
|
|
Director |
|
|
|
| STATEMENT
OF VALUE ADDED |
|
| Rs. in million |
|
|
|
|
|
Year ended
June 30 |
|
|
|
|
2001 |
2000 |
|
| Wealth
Generated |
|
| Total
revenue net of discount and allowances |
|
2,275 |
1,774 |
|
| Bought-immaterial
& services |
|
|
1,517 |
1,193 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
758 |
581 |
|
|
|
|
========== |
========== |
|
|
|
|
|
|
| Wealth
Distributed |
|
|
|
| TO Employees |
|
| Salaries,
benefits & other costs |
|
|
108 |
91 |
|
|
|
|
| To Government |
|
|
| Excise
duty, income tax, sales tax |
|
|
515 |
398 |
|
|
|
|
| To
Providers of Capital |
|
|
| Dividend
to shareholders |
|
|
43 |
37 |
|
| Mark
up/interest expenses on borrowed funds |
|
18 |
15 |
|
|
|
|
| Retained
for Reinvestment & Growth |
|
| Depreciation
& Retained Profit |
|
|
74 |
40 |
|
|
------------------ |
------------------ |
|
|
|
|
758 |
581 |
|
|
========== |
========== |
|
|
| CASH
FLOW STATEMENT |
|
| FOR
THE YEAR ENDED JUNE 30, 2001 |
|
|
|
|
2001 |
2000 |
|
|
|
(Rs. in
000's) |
|
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
| Net
profit for the year |
|
|
141,293 |
91,037 |
|
| Adjustments
for items not involving movement of funds: |
|
|
| Depreciation |
|
|
21,584 |
18,384 |
|
| Amortisation |
|
|
2,475 |
-- |
|
| Gain
on sale of fixed assets |
|
|
(202) |
(136) |
|
| Insurance
claims on disposal of fixed assets |
|
(57) |
(406) |
|
| Financial
charges |
|
|
17,979 |
14,701 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
183,072 |
123,580 |
|
| (Increase)
in current assets |
|
| Stores
and spares |
|
|
1,922 |
(3,313) |
|
| Stock in trade |
|
|
(54,882) |
(43,219) |
|
| Trade debts |
|
|
(58,759) |
(9,993) |
|
| Loans
and advances |
|
|
(4,995) |
648 |
|
| Trade
deposits and short term prepayments |
|
(636) |
(3,784) |
|
| Other
receivables |
|
|
(1,590) |
(6,954) |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
(118,940) |
(66,615) |
|
| Increase
in Current Liabilities |
|
| Creditors,
accrued and other liabilities |
|
30,891 |
52,521 |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash inflow from operating activities before |
|
|
|
| financial
charges and taxes |
|
|
95,023 |
109,486 |
|
|
|
|
|
|
| Financial
charges paid |
|
|
(15,606) |
(15,225) |
|
| Taxes paid |
|
|
(40,236) |
(21,603) |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash inflow from operating activities |
|
39,181 |
72,658 |
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
| Addition
to fixed assets and capital work in progress |
(47,673) |
(47,326) |
|
| Addition
to intangible assets |
|
(47,726) |
-- |
|
| Proceeds
from sale of fixed assets |
|
355 |
510 |
|
| Insurance
claim on disposal of fixed assets |
|
103 |
419 |
|
| Long term loans |
|
(53) |
292 |
|
| Long
term deposits |
|
1,670 |
(329) |
|
|
|
------------------ |
------------------ |
|
| Net
cash (outflow) from investing activities |
|
(93,324) |
(46,434) |
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
| Repayment
of liabilities against finance leases |
|
(7,932) |
(6,520) |
|
| Short
term loan and running finances |
|
74,462 |
5,394 |
|
| Dividends paid |
|
|
(36,526) |
(24,432) |
|
| Long
term deposits |
|
521 |
95 |
|
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