| COLGATE - PALMOLIVE PAKISTAN LIMITED. |
|
|
|
|
|
|
|
|
| Annual Reports 2002 |
|
| |
| CONTENTS. |
|
| |
| Company Information |
|
| Notice od Meeting |
|
| Fianancial Summary |
|
| Director's Report |
|
| Statement
of Corporate and Financial Reporting frame work |
|
| Statement
of Value Added |
|
| Statement
of Compiliance with best Practices of Corporate Governance |
|
| Auditor's
Report to the Members |
|
| Balance Sheet |
|
| Profit
and Loss Account |
|
| Cash flow Statement |
|
| Statement
of changes in enquity |
|
| Notes to the Accounts |
|
| Pattern of Shareholding |
|
| Yearwise
Financial Highlights |
|
| |
| BOARD
OF DIRECTORS |
|
| |
|
| IQBALALI LAKHANI |
|
Chairman |
|
| AMIN
MOHAMMED LAKHANI |
|
| TASLEEMUDDIN
AHMED BATLAY |
|
| SOREN PETER DAM |
|
| EBRAHIMSIDAT |
|
| RAMZAN
ALI HALANI |
|
| ZULFIQARALI
LAKHANI |
Chief Executive |
|
| |
|
| ADVISOR |
|
| SULTANALI
LAKHANI |
|
| |
|
| AUDIT COMMITTEE |
|
| EBRAHIMSIDAT |
|
Chairman |
|
| IQBALALI LAKHANI |
|
| TASLEEMUDDIN
AHMED BATLAY |
|
| |
|
| COMPANY
SECRETARY |
|
| RAMZAN
ALI HALANI |
|
| |
|
| AUDITORS |
|
| EBRAHIM&CO. |
|
| Chartered Accountants |
|
| |
|
| REGISTERED OFFICE |
|
| Lakson Square, Building No. 2 |
|
| Sarwar
Shaheed Road |
|
| Karachi
- 74200 |
|
| Pakistan |
|
| |
|
| FACTORIES |
|
| Detergents, Soap and Paste
Units |
|
| G-6,
S.l.T.E. Kotri |
|
| Distt.
Dadu (Sindh) |
|
| Pakistan |
|
| |
|
| NOTICE OF MEETING |
|
| |
|
| NOTICE
IS HEREBY GIVEN that the 24th Annual General Meeting ofColgate-Palmolive
(Pakistan) |
|
| Limited
will be held on Friday October 18, 2002 at 10.30 a.m. at Avari Towers Hotel,
Fatima |
|
| Jinnah
Road, Karachi to transact the following business: |
|
| |
|
| 1. To receive, consider and adopt the audited
financial statements for the year ended June 30, |
|
| 2002
together with the Directors' and Auditors' Reports thereon. |
|
| |
|
| 2. To declare final dividend @50% i.e. Rs.
5.00 per share of Rs. 10/- each as recommended by the |
|
| Board of Directors. |
|
| |
|
| 3. To appoint Auditors and fix their
remuneration. |
|
| |
|
| By order of the Board |
|
| |
|
| RAMZAN ALI HALANI |
|
| Karachi:
September 1 7, 2002
Director/Company Secretary |
|
| |
|
| NOTES: |
|
| 1. The share transfer books of the Company
will remain closed from October 08, 2002 to October |
|
| 18,
2002 both days inclusive. Transfers received in order at the Company's
registered office |
|
| situated
at Lakson Square, Building No. 2, Sarwar Shaheed Road, Karachi upto October
07, |
|
| 2002
will be considered in time to be eligible for entitlement of the final
dividend. |
|
| |
|
| 2. A member who has deposited his/her shares
into Central Depository Company of Pakistan |
|
| Limited,
must bring his/her participant's ID number and account/sub-account number
alongwith |
|
| original
National Identity Card (NIC) or original Passport at the time of attending
the meeting. |
|
| |
|
| 3. A member entitled to attend and vote at
the general meeting may appoint another member as |
|
| his/her
proxy to attend, speak and vote instead of him/her. |
|
| |
|
| 4. Forms of proxy to be valid must be
received properly filled-in/executed, at the Company's |
|
| Registered
Office not later than 48 hours before the time of the meeting. |
|
| |
|
| 5. Members are requested to notify the
Company promptly of any change in their addresses. |
|
| |
|
| 6. Form of proxy is enclosed herewith. |
|
| |
|
| |
Years ended June 30 |
|
| Rupees
in millions except EPS |
2000 |
2001 |
% Change |
2002 |
% Change |
|
| |
|
|
| Net Sales |
|
1,520 |
1,951 |
28.40% |
2,246 |
15.10% |
|
| Operating Income |
|
108 |
168 |
55.60% |
220 |
30.90% |
|
| Net Profit After Tax |
|
59 |
95 |
63.00% |
121 |
27.40% |
|
| Earnings
per share (Rs.) |
4.78 |
7.8 |
63.20% |
9.9 |
26.90% |
|
| Shareholders' Equity |
|
282 |
335 |
18.80% |
395 |
17.90% |
|
| |
|
| DIRECTORS'
REPORT |
|
| |
|
| The
Directors take pleasure in presenting the Annual Report together with the
Company's audi |
|
| accounts
for the year ended June 30,2002. |
|
| |
|
| PROFIT
AND APPROPRIATIONS |
|
| |
(Rupees in 000's) |
|
| Profit after taxation |
|
121,062 |
|
| Unappropriated
profit brought forward |
|
3,945 |
|
| Profit
available for appropriation |
|
125,007 |
|
| Appropriations |
|
| Proposed
cash dividend @ 50% Rs. 5.00 per share |
|
| (2001
: 35% Rs. 3.50 per share) |
|
61,151 |
|
| Transfer
to General Reserve |
|
60,000 |
|
| |
121,151 |
|
| Unappropriated
profit carried forward |
|
3,856 |
|
| Earnings per share |
|
Rs. |
9.9 |
|
| |
|
| OPERATING
RESULTS |
|
| |
|
| Our
Company managed to continue its growth momentum despite difficult economic
conditions and |
|
| turbulent
business environment. The gross sales achieved during the year was Rs. 2.803
billion as |
|
| compared
to Rs. 2.401 billion during the previous year, recording gross sales growth
of 16.74% |
|
| whereas
unit volume grew by 23.57 %. |
|
| |
|
| The
gross profit increased from Rs. 543.417 million (27.85 % of net sales) to Rs.
578.854 million |
|
| (25.78%
of net sales). Major growth in volume has come from the products with low
price and low |
|
| margins.
This coupled with deferred price increases and higher trade discounts has
resulted in the |
|
| drop
of 2.07 % gross profit as a % of net sales. |
|
| |
|
| The
selling, general and administrative expenses were Rs.359.061 million as
compared to Rs. 375.355 |
|
| million
in the last year. The Company has controlled the marketing expenses without
affecting the |
|
| volume
of advertising. Cross channel media advertising and optimised media planning
has helped |
|
| the
Company to achieve this goal. |
|
| |
|
| The
net profit for the year has increased from Rs. 141.293 million to Rs. 187.285
million showing an |
|
| increase
of 32.55 % over the last year. |
|
| |
|
| CHALLENGES
AND PROSPECTS |
|
| |
|
| The
Company is committed to achieve higher growth and higher profitability. To
meet the growth in |
|
| market
demand , the Company has planned for the expansion of its existing plant
capacity for which |
|
| financing
arrangements have already been made. |
|
| |
|
| The
Company has to face challenges on account of competition as they have
intensified below the |
|
| line
activities to have trade dominance in the metro markets. Our Company is fully
geared up to |
|
| meet these challenges. |
|
| |
|
| Company's
future products are in the plans and some of them in the pipeline, line
extensions and |
|
| improvement
of existing portfolios are under active consideration. The aim is to optimize
the product |
|
| lines
and improve the equities wherever possible. |
|
| |
|
| HUMAN RESOURCE |
|
| |
|
| Development
of best quality people is a continuous process. The quality of people for
high |
|
| performance
is integral to the Company's growth and success. Overseas training, in-house
exposure |
|
| and
leadership nurturing is reinforced year after year. |
|
| |
|
| COMMUNITY
DEVELOPMENT |
|
| |
|
| Being
the leaders in Oral Care worldwide, the Company is focusing on the school
going children by |
|
| creating
oral health awareness. Colgate's "Bright Smile Bright Future"
program is being expanded |
|
| and
coverage of the number of children is being increased every year. The Company
has taken in |
|
| coverage
smaller towns as well to benefit the children in rural areas. |
|
| |
|
| CORPORATE
GOVERNANCE |
|
| |
|
| The
Securities and Exchange Commission of Pakistan(SECP) issued Code of Corporate
Governance |
|
| in
March 2002 making it obligatory for all listed companies in Pakistan to form
Audit Committees, |
|
| chalk
out significant policies and strengthen and formalize corporate
decision-making process. In |
|
| compliance
with the directives issued by SECP the Company has formed an Audit
Committee |
|
| comprising
of two Non-Executive Directors and one Executive Director. |
|
| |
|
| The
Management feels that the Code of Corporate Governance will go a long way in
achieving |
|
| good
corporate governance whereby a listed company is managed in accordance with
the best |
|
| practices
as provided in the relevant rules and regulations. |
|
| |
|
| A
separate statement is attached in compliance with clause xix of the Code of
Corporate Governance |
|
| for
the information of the shareholders. |
|
| |
|
| AUDITORS |
|
| |
|
| M/S
Ebrahim & CO. Chartered Accountants, the existing Auditors of the Company
being eligible, |
|
| have
offered themselves for re-appointment. |
|
| |
|
| ACKNOWLEDGMENT |
|
| |
|
| We
take pleasure in thanking all of our staff and people for the hard work,
commitment, loyalty and |
|
| enthusiasm
that they bring to their tasks. We are also grateful to our customers ,
suppliers, bankers |
|
| and
shareholders for their support and trust. |
|
| |
|
| On
behalf of Board of Directors |
|
| |
|
| IQBALALI LAKHANI |
|
| Chairman |
|
| |
|
| Karachi :
September 04, 2002 |
|
| |
|
| STATEMENTS
ON CORPORATE AND FINANCIAL REPORTING FRAME WORK |
|
| |
|
| a. The financial statements, prepared by
the management of the Company, present fairly it's |
|
| state
of affairs, the result of it's operations, cash flows and changes in equity. |
|
| |
|
| b. Proper books of account of the Company
have been maintained. |
|
| |
|
| c. Appropriate accounting policies have
been consistently applied in preparation of financial |
|
| statements
and accounting estimates are based on reasonable and prudent judgement. |
|
| |
|
| d. International Accounting Standards, as
applicable in Pakistan, have been follov/ed in |
|
| preparation
of financial statements and any departure therefrom has been adequately |
|
| disclosed. |
|
| |
|
| e. The system of internal control, which
was in place, is being continuously reviewed by internal |
|
| audit
and other such procedures. The process of review will continue and any
weaknesses in |
|
| controls
will be removed. |
|
| |
|
| f. There are no doubts upon the Company's
ability to continue as a going concern. |
|
| |
|
| g. There has been no material departure
from the best practices of corporate governance, as |
|
| detailed
in the listing regulations. |
|
| |
|
| h. Financial Highlights for the last 6
years is annexed. |
|
| |
|
| i. There are no outstanding taxes and
levies except those reported in Note # 26 relating to |
|
| Contingencies. |
|
| |
|
| j. The value of Provident Fund Investment
based on Audited Accounts as on December 31, |
|
| 2001
amounted to Rs. 47.384 million. |
|
| |
|
| k. During the year Five Meetings of the
Board of Directors were held and attended by each |
|
| Directors As Follows: |
|
| |
|
| Name of Directors |
|
No. of Meetings Attended |
|
| |
|
| Mr. Iqbalali Lakhani |
|
2 |
|
| Mr. ZulfiqarAli Lakhani |
|
5 |
|
| Mr.
Amin Mohammed Lakhani |
3 |
|
| Mr.
Tasleemuddin Ahmed Batlay |
4 |
|
| Mr. Ramzan Ali Halani |
|
5 |
|
| Mr. Soren Peter Dam |
|
0 (Nominee of CP-USA) |
|
| Mr. Ebrahim Sidot |
|
5 (Nominee of CP-USA) |
|
| |
|
| Leave
of absence was granted to Directors who could not attend some of the Board
meetings. |
|
| Pattern
of share holdings is annexed. |
|
| |
|
| IQBALALI LAKHANI |
|
| Chairman |
|
| |
| Karachi
: September 04, 2002 |
|
| |
|
| |
Year ended June 30 |
|
| |
2002 |
2001 |
|
| |
(Rs. in miIlion) |
|
| Wealth Generated |
|
| Total
revenue net of discount and allowanes |
|
2,636 |
2,275 |
|
| Bought-in-material
and services |
|
1,731 |
1,517 |
|
| |
905 |
758 |
|
| Wealth Distributed |
|
| To Employees |
|
| Salaries,
benefits and other costs |
|
118 |
108 |
|
| To Government |
|
| Excise
duty, income tax, sales tax |
|
619 |
515 |
|
| To Providers of Capital |
|
| Dividend
to shareholders |
|
61 |
43 |
|
| Mark
up/interest expenses on borrowed funds |
|
23 |
18 |
|
| Retained
for Reinvestment and Future Growth |
|
| Depict-iunon
unu iciuii icu [->. otits |
|
84 |
74 |
|
| |
905 |
758 |
|
| |
|
| STATEMENT
OF COMPLIANCE WITH BEST PRACTICES OF CORPORATE GOVERNANCE |
|
| |
|
| The
Company is in process of implementing all facets of the Code of Corporate
Governance issuec |
|
| by
the Karachi and Lahore Stock Exchanges. The Board feels pleasure in stating
that provisions of th( |
|
| code,
relevant for the period from May 2, 2002 to June 30, 2002 have been duly
complied with. |
|
| |
|
| TASLEEMUDDIN A. BATLAY |
|
| Karachi:
September 04, 2002
Director |
|
| |
|
| REVIEW
REPORT TO THE MEMBERS ON STATEMENT OF COMPLIANCE WITH BEST PRACTICES |
|
| OF
CODE OF CORPORATE GOVERNANCE |
|
| |
|
| We
have reviewed the Statement of Compliance with the best practices contained
in the Code of |
|
| Corporate
Governance prepared by the Board of Directors of Colgate-Palmolive (Pakistan)
Limited |
|
| to
comply with the .isting Regulation No. 37 of the Karachi Stock Exchange and
Chapter XIII of the |
|
| Lahore
Stock Exchange where the Company is listed. |
|
| |
|
| The
responsibility for compliance with the Code of Corporate Governance is that
of the Board of |
|
| Directors
of the Company. Our responsibility is to review, to the extent where such
compliance can |
|
| be
objectively verified, whether the Statement of Compliance reflects the status
of the Company's |
|
| compliance
with the provisions of the Code of Corporate Governance and report if it does
not. A |
|
| review
is limited primarily to inquiries of the Company personnel and review of
various documents |
|
| prepared
by the Company to comply with the Code. |
|
| |
|
| As
part of our audit of the financial statements we are required to obtain an
understanding of the |
|
| accounting
and internal control systems sufficient to plan the audit and develop an
effective audit |
|
| approach.
We have not carried out any special review of the internal control system to
enable us to |
|
| express
an opinion as to whether the Board's statement on internal control covers all
controls and |
|
| the
effectiveness of such internal controls. |
|
| |
|
| Based
on our review nothing has come to our attention which causes us to believe
that the Statement |
|
| of
Compliance does not appropriately reflect the Company's compliance, in all
material respects, |
|
| with
the best practices contained in the Code of Corporate Governance as
applicable to the Company |
|
| for
the year ended June 30, 2002. |
|
| |
|
| Karachi:
September 04, 2002 |
|
| |
|
| EBRAHIM&CO |
|
| Chartered Accountants |
|
| |
|
| AUDITORS'
REPORT TO THE MEMBERS |
|
| |
|
| We
have audited the annexed balance sheet of CUn-iAlt-r'ALMULIVb (h-AMblAN)
LIMIItU as at |
|
| June
30, 2002 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. |
|
| |
|
| 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, 1 984. 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,
1 984, 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, 2002 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. |
|
| |
|
| BALANCE SHEET |
|
| AS AT JUNE 30, 2002 |
|
| |
|
| |
2002 |
2001 |
|
| |
Note |
(Rs. In 000's) |
|
| TANGIBLE
FIXED ASSETS |
|
| Operating assets |
|
3 |
178,305 |
154,374 |
|
| Capital
work in progress |
|
4 |
25,064 |
19,236 |
|
| |
203,369 |
173,610 |
|
| INTANGIBLE ASSETS |
|
5 |
44,201 |
45,251 |
|
| LONG TERM LOANS |
|
6 |
1,874 |
1,798 |
|
| LONG
TERM DEPOSITS AND PREPAYMENTS |
|
7 |
3 |
3,387 |
|
| CURRENT ASSETS |
|
|
|
| Stores and spares |
|
8 |
9,651 |
8,728 |
|
| Stock in trade |
|
9 |
302,241 |
301,161 |
|
| Trade debts |
|
10 |
124,860 |
153,598 |
|
| Loans and advances |
|
25,252 |
10,570 |
|
| Trade
deposits and short term prepayments |
|
12 |
7,045 |
8,888 |
|
| Other receivables |
|
13 |
15,324 |
18,353 |
|
| Cash
and bank balances |
|
14 |
157,018 |
28,614 |
|
| |
641,391 |
529,912 |
|
| CURRENT
LIABILITIES |
|
|
|
| Current
portion of long term liabilities |
|
15 |
18,572 |
12,775 |
|
| Short
term running finances |
|
16 |
