| Colgate-Palmolive (Pakistan) Limited. |
|
|
|
|
|
|
|
|
| Annual Report 1999 |
|
|
| CONTENTS |
|
| Company Information |
|
| Notice of Meeting |
|
| Directors' Report |
|
| Pattern
of Holding of Shares |
|
| Auditors' Report |
|
| Balance Sheet |
|
| Profit and Loss Account |
|
| Statement
of Changes in Financial Position |
|
| Notes of the Accounts |
|
| Yearwise
Financial Highlights |
|
|
|
| COMPANY
INFORMATION |
|
| Iqbal Lakhani |
|
Chairman |
|
| Amin
Mohammad Lakhani |
|
| Tasleemuddin
Ahmed Batlay |
|
| Soren Peter Dam |
|
| Ebrahim Sidat |
|
| A. Aziz Ebrahim |
|
| Zulfiqarali Lakhani |
|
Chief Executive |
|
|
| ADVISOR |
|
| Sultanali Lakhani |
|
|
| COMPANY
SECRETARY |
|
| Ramzanali 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 |
|
|
|
| NOTICE
OF MEETING |
|
|
| NOTICE
IS HEREBY GIVEN that the21st Annual General Meeting of Colgate-Palmolive
(Pakistan) Limited |
|
| will
be held on Saturday, December 11, 1999 at 10.00 am at Avari Towers Hotel,
Fatima Jinnah Road, Karachi |
|
| to
transact the following business: |
|
|
| 1.
To receive, consider and adopt the audited balance sheet and profit and loss
account for the year |
|
| ended
June 30, 1999 and the directors' and Auditors' reports thereon. |
|
|
| 2.
To declare a dividend @20% i.e. Rs. 2.00 per share of Rs. 10 each as
recommended by the Board of Directors. |
|
|
| 3.
To appoint Auditors and to fix their remuneration. |
|
|
|
By Order of the Board |
|
|
Ramazanali Halani |
|
| Karachi: October 28, 1999 |
|
Company Secretary |
|
|
| NOTES: |
|
| 1.
The share transfer books of the Company will remain closed form November 27,
1999 to December 11, 1999 both days inclusive. |
|
| Transfers
received in order at the Registered Office of the Company situated at Lakson
Square, Building No. 2, Sarwar Shaheed |
|
| Road,
Karachi, upto November 26, 1999 will be considered in time for entitlement of
the dividend. |
|
|
| 2.
A member entitled to attend and vote at the general meeting may appoint
another member as his |
|
| proxy
ot attend, speak and vote instead of him. |
|
|
| 3.
Forms of proxy to be valid must be received at the company's registered
office not later than 48 hours |
|
| before
the time of the meeting. |
|
|
| 4.
Members are requested to notify the Company promptly of any change in their
addresses. |
|
|
| 5.
Form of proxy is enclosed herewith. |
|
|
|
| DIRECTORS'
REPORT |
|
|
|
| The
Directors are pleased to submit Audited Report for the year ended June 30,
1999 alongwith the report |
|
| on
the performance of the Company. |
|
|
|
Rupees in 000's |
|
|
| Profit after taxation |
|
45,905 |
|
| Unappropriated
profit brought forward |
|
1,158 |
|
|
----------------- |
|
| Profit
available for appropriation |
|
47,063 |
|
|
| Appropriations |
|
| Proposed
dividend @ 20% |
|
24,461 |
|
| Transfer
to General Reserve |
|
21,000 |
|
|
----------------- |
|
|
45,461 |
|
|
----------------- |
|
| Unappropriated
profit carried forward |
|
1,602 |
|
|
========== |
|
|
| OPERATING RESULTS |
|
| Total
sales for the year reached Rs. 1.4 Billion showing a growth of 27.3% over the
previous year. Sales volume also |
|
| increased
by 19% during the same period. Inspite of the exchange rate devaluation and
inflationary pressures, the |
|
| Company
was able to increase its gross profit by 36%. The gross profit margin at
26.4% of sales shows an improvement |
|
| as
compared to 23.7% of sales for the same period last year. |
|
|
| Profit
before tax also improved from Rs 47.64 million to Rs. 69.75 million posting a
growth of 46.4%. |
|
|
| Selling
and administrative expenses have increased to Rs. 231.4 million in 1999 from
Rs. 167.7 million in |
|
| the
same period, showing an increase of 38% over last year. |
|
|
| This
escalation is mainly due to our policy for enhanced investment in marketing,
sales promotion |
|
| and
expansion of our distribution net-work. The upward movement to these
expenditures is also |
|
| partly
due to much higher media and promotional spend by competition. |
|
|
| In
the last Budget, duties on finished imported goods were further reduced form
45% to 35% and |
|
| duties
on imported bulk consumer goods such as Detergent Powder etc. were also
reduced from 35% |
|
| to
25%. Ironically, however, import duties for a number of raw materials used
for the local manufacture |
|
| of
detergents are still at 355. Additionally, Central Excise Duty on imported
finished products |
|
| such
as detergents is levied on landed
cost, whereas Central Excise Duty on locally manufactured |
|
| detergents
are levied on retail prices. These anomalies are unfortunately promoting
import |
|
| of
finished products at the expense of local manufacture. |
|
|
| FUTURE PROSPECTS |
|
| The
above described anomalous situation must be rectified by Government, as not
only the collection of |
|
| taxes
on imported finished product is much less, but also the much needed foreign
exchange of the country |
|
| is
being wasted unnecessarily. |
|
|
| We
have approached the tariff Commission to rectify this anomaly and
sincerely hope that |
|
| correction
will soon come about. Import of finished goods such as Skin and Hair-care
products and |
|
| Fabric-wash
preparations only deter and discourage the industrial manufacture such items
within |
|
| Pakistan
where ample capacities are available to produce and market quality products. |
|
|
| Such
a policy also adversely affects the support manufacturing activity to the
up-stream manufacture |
|
| of
such products thereby capping the potential of the country resulting in
reduced economic activity. |
|
|
| The
test-marketing of Colgate Sensation Whitening tooth paste has shown excellent
results and the |
|
| product
is expected to do well in the market. |
|
|
| Colgate
Junior Tooth Paste introduced in the third quarter of the year has also been
well received |
|
| and
is expected to be a good success with children whose habits of oral hygiene
it is designed to |
|
| improve. |
|
|
| Your
Company will continue to improve its marketing thrust and invest in our
existing core brands, |
|
| so
as to support, consolidate and enhance market shares. |
|
|
| ISO 9002 |
|
|
| Your
Company is proud to be the first tooth paste manufacturing company in
Pakistan which has |
|
| received
ISO 9002 Certification for manufacture and sale. This will indeed provide an
assurance to |
|
| the
consumer whereby our products will continue to move from better to best in
terms of product |
|
| quality
in the market place. |
|
|
| STAFF RELATIONS |
|
|
| Your
Company values the human resources above all other invaluable assets and
resources. As a |
|
| result,
excellent relationship exists between the staff, workers and the management.
Due to this |
|
| excellent
relationship, the staff and Management have jointly made dedicated efforts to
keep up with |
|
| the
high standards of productivity, despite difficult circumstances. |
|
|
| YEAR
2000 COMPLIANCE |
|
|
| We
are pleased to confirm that all the Computer Hardware, systems and programmes
have been |
|
| harmonized
to comply with the year 2000 requirement. In addition to this, Contingency
Plans have |
|
| been
prepared and lined up to meet any disruptions in Production and Selling
Activity of the Company |
|
| resulting
from any inadequacies from outside sources. |
|
|
| Confirmations
from major customers as well as on-site inspections have been carried out to
ensure |
|
| that
no interruption occurs on their account. Simultaneously alternate sourcing of
suppliers has been |
|
| arranged. |
|
|
| AUDITORS |
|
|
| The
present Auditors M/s. Ebrahim & Co., Chartered Accountants, retire and
being eligible, have |
|
| offered
themselves for re-appointment. |
|
|
| PATTERN
OF SHAREHOLDING |
|
|
| The
Share-Holding pattern in the prescribed form is given in this report. |
|
|
| On
behalf of Board of Directors |
|
|
|
| PATTERN
OF HOLDING OF SHARES |
|
| HELD
BY THE SHAREHOLDERS AS AT JUNE 30, 1999 |
|
|
| No. of |
|
Shareholding |
|
Total Shares |
|
|
| Shareholders |
From |
|
To |
Held |
|
|
|
| 159 |
1 |
100 |
Shares |
7 041 |
|
| 197 |
101 |
500 |
Shares |
46 612 |
|
| 50 |
501 |
1 000 |
Shares |
31 045 |
|
| 62 |
1 001 |
5 000 |
Shares |
151 556 |
|
| 12 |
5 001 |
10 000 |
Shares |
75 860 |
|
| 11 |
10 001 |
15 000 |
Shares |
128 882 |
|
| 2 |
15 001 |
20 000 |
Shares |
32 033 |
|
| 4 |
20 001 |
25 000 |
Shares |
83 152 |
|
| 3 |
30 001 |
35 000 |
Shares |
98 830 |
|
| 1 |
35 001 |
40 000 |
Shares |
39 502 |
|
| 5 |
40 001 |
45 000 |
Shares |
207 698 |
|
| 2 |
50 001 |
55 000 |
Shares |
106 288 |
|
| 1 |
75 001 |
80.00 |
Shares |
76 819 |
|
| 1 |
100,001 |
105.00 |
Shares |
103 955 |
|
| 1 |
125.00 |
130.00 |
Shares |
129 760 |
|
| 1 |
210 001 |
215 000 |
Shares |
212 378 |
|
| 1 |
295 001 |
300 000 |
Shares |
299 802 |
|
| 1 |
310 001 |
315 000 |
Shares |
312 219 |
|
| 1 |
325 001 |
330 000 |
Shares |
327 046 |
|
| 1 |
345001 |
350 000 |
Shares |
349 227 |
|
| 1 |
365 001 |
370 000 |
Shares |
367.28 |
|
| 1 |
425 001 |
430 000 |
Shares |
426 543 |
|
| 1 |
460 001 |
465 000 |
Shares |
464.58 |
|
| 1 |
465 001 |
470 000 |
Shares |
469.40 |
|
| 1 |
790 001 |
795 000 |
Shares |
791 783 |
|
| 1 |
845 001 |
850 000 |
Shares |
845.41 |
|
| 1 |
1,150 001 |
1,155 000 |
Shares |
1,151 484 |
|
| 1 |
1,220,001 |
1,225,000 |
Shares |
1,225 000 |
|
| 1 |
3,665,001 |
3,670,000 |
Shares |
3,669 077 |
|
|
|
|
| 525 |
|
12,230,263 |
|
|
| Categories
of Shareholders |
Number |
Shares held |
Percentage |
|
|
| Individuals |
|
509 |
4,176,090 |
34.14 |
|
| Joint Stock Companies |
|
10 |
3,143,157 |
25.70 |
|
| Financial Institutions |
|
3 |
12,957 |
0.11 |
|
| Others: |
|
|
| Foreign Companies |
|
3 |
4,898,059 |
40.05 |
|
|
|
------------------ |
------------------ |
------------------ |
|
|
|
525 |
12,230,263 |
100.00 |
|
|
========== |
========== |
========== |
|
|
|
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
|
| We
have audited the annexed balance sheet of COLGATE-PALMOLIVE (PAKISTAN)
LIMITED as |
|
| at
June 30, 1999 and the related profit and loss account and statement of
changes in financial |
|
| position
togetherwith 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, 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 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 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
togetherwith 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, 1999 and of the
profit and |
|
| changes
in financial position 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, 1999 |
|
Chartered Accountants |
|
|
| BALANCE
SHEET AS AT JUNE 30, 1999 |
|
|
|
|
| 1999 |
|
1999 |
1998 |
|
|
|
|
Note |
(Rs. in 000's) |
|
|
|
|
|
|
|
| TANGIBLE
FIXED ASSETS |
|
3 |
119,164 |
107,202 |
|
|
| LONG TERM LOANS |
|
4 |
2,037 |
1,210 |
|
|
| LONG
TERM DEPOSITS |
|
5 |
4,728 |
4,175 |
|
|
| CURRENT ASSETS |
|
|
|
|
|
| Stores and spares |
|
6 |
7,337 |
5,848 |
|
|
| Stock in trade |
|
7 |
187,255 |
172,391 |
|
|
| Trade debts |
|
8 |
84,846 |
82,901 |
|
|
| Loans and advances |
|
9 |
14,127 |
13,566 |
|
|
| Trade
deposits and short term prepayments |
10 |
4,468 |
8,282 |
|
|
| Other receivables |
|
11 |
9,809 |
2,639 |
|
|
| Cash and bank balances |
|
12 |
1,471 |
81,983 |
|
|
|
------------------ |
------------------ |
|
|
|
309,313 |
367,610 |
|
|
| CURRENT LIABILITIES |
|
|
| Current
portion of long term liabilities |
|
13 |
6,520 |
2,842 |
|
| Short
term loans and running finances |
|
14 |
46,306 |
114,652 |
|
| Creditors,
accrued and other liabilities |
|
15 |
73,969 |
814.40 |
|
| Dividends |
|
16 |
24,535 |
15,326 |
|
|
------------------ |
------------------ |
|
|
151,330 |
214,260 |
|
|
|
|
------------------ |
------------------ |
|
| NET CURRENT ASSETS |
|
|
157,983 |
153,350 |
|
|
------------------ |
------------------ |
|
|
|
283,912 |
265,937 |
|
|
========== |
========== |
|
|
| FINANCED BY: |
|
| CAPITAL
AND RESERVES |
|
| Share capital |
|
|
17 |
122,303 |
122,303 |
|
| Capital reserve |
|
|
18 |
13,456 |
13,456 |
|
| Revenue reserves |
|
|
19 |
124,602 |
103,158 |
|
|
|
|
------------------ |
------------------ |
|
| Shareholders' equity |
|
|
260,361 |
238,917 |
|
|
|
|
|
|
| LIABILITIES
AGAINST ASSETS SUBJECT |
|
| TO FINANCE LEASES |
|
20 |
17,582 |
24,102 |
|
|
|
|
| DEFERRED LIABILITY |
|
21 |
3,871 |
1,284 |
|
| LONG
TERM DEPOSITS |
|
22 |
2,098 |
1,634 |
|
| CONTINGENCIES
AND COMMITMENTS |
23 |
|
|
------------------ |
------------------ |
|
|
|
|
283,912 |
265,937 |
|
|
|
|
========== |
========== |
|
| 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, 1999 |
|
|
|
|
1999 |
1998 |
|
|
|
Note |
(Rs. in 000's) |
|
|
| Sales |
|
|
24 |
1,198,375 |
983,455 |
|
| Cost of goods sold |
|
|
25 |
881,840 |
750,425 |
|
|
------------------ |
------------------ |
|
| Gross profit |
|
|
316,535 |
233,030 |
|
| Administrative
and selling expenses |
|
26 |
231 438 |
167,673 |
|
|
|
|
|
|
------------------ |
------------------ |
|
|
| Operating profit |
|
|
85,097 |
65,357 |
|
| Other income |
|
27 |
6,904 |
5 125 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
|
92,001 |
70, 482 |
|
|
|
|
|
|
|
|
|
|
|
| Financial charges |
|
|
28 |
17,155 |
19 257 |
|
| Workers'
profit participation fund |
|
|
3,743 |
2,561 |
|
| Workers' welfare fund |
|
|
1,351 |
1,018 I |
|
|
------------------ |
------------------ |
|
|
|
22,249 |
22,836 |
|
|
------------------ |
------------------ |
|
| Net profit for the year |
|
|
|
69,752 |
47,646 |
|
| Taxation |
|
|
29 |
23,847 |
17,703 |
|
|
------------------ |
------------------ |
|
| Profit after taxation |
|
|
45,905 |
29,943 |
|
| Unappropriated
profit brought forward |
|
|
1,1 58 |
503 |
|
|
|
------------------ |
------------------ |
|
| Profit
available for appropriation |
|
|
47,063 |
30,446 |
|
|
|
|
|
| Appropriations |
|
| Proposed
dividend @ 20% (1998' 12.5%) |
|
|
24,461 |
15,288 |
|
| Transfer
to general reserve |
|
|
21,000 |
14,000 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
45,461 |
29,288 |
|
|
------------------ |
------------------ |
|
| Unappropriated
profit carried forward |
|
|
1,602 |
1,158 |
|
|
========== |
========== |
|
| EARNINGS PER SHARE |
|
30 |
Rs. 3.75 |
Rs. 2.45 |
|
|
========== |
========== |
|
| 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, 1999 |
|
|
|
1999 |
1998 |
|
|
|
(Rs. in 000's) |
|
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
|
| Net profit for the year |
|
|
|
69,752 |
47,646 |
|
| Adjustments
for items not involving movement of funds: |
|
| Depreciation |
|
|
14,267 |
12,537 |
|
| Profit
on sale of fixed assets |
|
(1,052) |
(374) |
|
|
|
--------------- |
--------------- |
|
|
|
|
82,967 |
59,809 |
|
| (Increase)
/ Decrease in Current Assets |
|
| Stores and spares |
|
|
(1,489) |
986 |
|
| Stock in trade |
|
|
(14,864) |
17,163 |
|
| Trade debts |
|
|
(1,945) |
(10,394) |
|
| Loans and advances |
|
|
(2,362) |
7,673 |
|
| Trade
deposits and short term prepayments |
|
3,814 |
(4,068) |
|
| Other receivables |
|
|
(7,170) |
(2,056) |
|
|
|
--------------- |
--------------- |
|
|
|
-24,016 |
9,304 |
|
| (Decrease)
in Current Liabilities |
|
|
| Creditors,
accrued and other liabilities |
|
|
(7,471) |
(2,453) |
|
| Net
cash from operating activities before tax |
|
51,480 |
66,660 |
|
| Tax paid |
|
|
(19,459) |
(33,332) |
|
|
|
--------------- |
--------------- |
|
| Net
cash from operating activities |
|
|
32,021 |
33,328 |
|
|
| CASH
FLOW FROM INVESTING ACTIVITIES |
|
| Addition
to fixed assets and capital work in progress |
|
(26,656) |
(18,292) |
|
| Long term loans |
|
(827) |
184 |
|
| Long term deposits |
|
(553) |
64 |
|
| Proceeds
from sale of fixed assets |
|
1,479 |
747 |
|
|
|
--------------- |
--------------- |
|
| Net
cash from investing activities |
|
(26,557) |
(17,297) |
|
|
| CASH
FLOW FROM FINANCING ACTIVITIES |
|
| Repayment
of liabilities against finance leases |
|
(2,842) |
(282) |
|
| Short
term loans and running finances |
|
(68,346) |
64,623 |
|
| Dividend |
|
(15,252) |
2 |
|
| Long term deposits |
|
464 |
184 |
|
| Net
cash from financing activities |
|
(85,976) |
64,527 |
|
| Net
(decrease) /increase in cash and cash equivalents |
|
(80,512) |
80,558 |
|
| Cash
and cash equivalents at the beginning of the year |
|
81,983 |
1,425 |
|
|
|
--------------- |
--------------- |
|
| Cash
and cash equivalents at the end of the year |
|
1,471 |
81,983 |
|
|
========= |
========= |
|
|
|
|
| ZULFIQARALI
LAKHANI |
|
TASLEEMUDDIN A. BATLAY |
|
| Chief Executive |
|
|
Director |
|
|
|
|
|
|
|
| NOTES
TO THE ACCOUNTS |
|
| FOR
THE YEAR ENDED JUNE 30, 1999 |
|
|
| 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 prepared under the historical cost convention without any |
|
| adjustments
for the effect of inflation or current values. |
|
|
| 2.2
Staff retirement benefits |
|
|
| A
recognised provident fund scheme is in operation which covers all permanent
employees. |
|
| Equal
contributions are made by the Company and the employees. |
|
|
| 2.3 Taxation |
|
|
|
