Third Quarter Report - Colgate Palmolive Pakistan
Third Quarter Report - Colgate Palmolive Pakistan
Third Quarter Report - Colgate Palmolive Pakistan
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<strong>Third</strong> <strong>Quarter</strong> <strong>Report</strong><br />
January - March 2013
CONTENTS<br />
Page<br />
COMPANY INFORMATION 2<br />
DIRECTORS’ REVIEW 3-4<br />
CONDENSED INTERIM BALANCE SHEET 5<br />
CONDENSED INTERIM PROFIT AND LOSS ACCOUNT 6<br />
CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY 7<br />
CONDENSED INTERIM CASH FLOW STATEMENT 8<br />
NOTES TO AND FORMING PART OF THE CONDENSED<br />
INTERIM FINANCIAL STATEMENTS 9-19<br />
1
COMPANY INFORMATION<br />
BOARD OF DIRECTORS<br />
Iqbal Ali Lakhani<br />
Amin Mohammed Lakhani<br />
Tasleemuddin Ahmed Batlay<br />
Jerome Graham Webb<br />
Mukul Deoras<br />
A. Aziz H. Ebrahim<br />
Zulfiqar Ali Lakhani<br />
ADVISOR<br />
Sultan Ali Lakhani<br />
AUDIT COMMITTEE<br />
Iqbal Ali Lakhani<br />
Amin Mohammed Lakhani<br />
Tasleemuddin Ahmed Batlay<br />
HUMAN RESOURCE &<br />
REMUNERATION COMMITTEE<br />
Iqbal Ali Lakhani<br />
Zulfiqar Ali Lakhani<br />
A. Aziz H. Ebrahim<br />
COMPANY SECRETARY<br />
Mansoor Ahmed<br />
AUDITORS<br />
A. F. Ferguson & Co.<br />
Chartered Accountants<br />
INTERNAL AUDITORS<br />
BDO Ebrahim & Co.<br />
Chartered Accountants<br />
REGISTERED OFFICE<br />
Lakson Square, Building No. 2,<br />
Sarwar Shaheed Road,<br />
Karachi-74200<br />
<strong>Pakistan</strong><br />
SHARES REGISTRAR<br />
FAMCO Associates (Private) Limited<br />
State Life Building No. 1-A, 1st Floor,<br />
I.I. Chundrigar Road, Karachi.<br />
FACTORIES<br />
G-6, S.I.T.E., Kotri<br />
District Jamshoro (Sindh)<br />
217, Sundar Industrial Estate<br />
Raiwind Road, Lahore<br />
WEBSITE<br />
www.colgate.com.pk<br />
2<br />
Chairman<br />
Chief Executive<br />
Chairman<br />
Chairman
DIRECTORS’ REVIEW<br />
The Directors are pleased to present the un-audited financial statements of the Company for the<br />
third quarter and nine months period ended March 31, 2013.<br />
Financial Highlights<br />
Financial results of the Company are summarized below:<br />
Turnover<br />
Jan-Mar Jan-Mar<br />
2013 2012<br />
Rs. in million<br />
6,597 6,134<br />
Variance<br />
%<br />
7.5%<br />
July-Mar July-Mar<br />
2012-13 2011-12<br />
Rs. in million<br />
18,648 17,229<br />
Variance<br />
%<br />
8.2%<br />
Gross Profit<br />
1,516<br />
1,515<br />
0.1%<br />
4,192<br />
4,061<br />
3.2%<br />
- as % age to Net Sales<br />
29.01%<br />
30.79%<br />
(178)bps<br />
28.24%<br />
29.32%<br />
(108)bps<br />
Selling & Distribution Costs<br />
774<br />
787<br />
-1.6%<br />
2,282<br />
2,035<br />
12.2%<br />
- as % age to Net Sales<br />
14.82%<br />
15.99%<br />
(117)bps<br />
15.38%<br />
14.69%<br />
69bps<br />
Administrative Expenses<br />
47<br />
47<br />
-1.0%<br />
135<br />
136<br />
-0.6%<br />
- as % age to Net Sales<br />
0.89%<br />
0.96%<br />
(07)bps<br />
0.91%<br />
0.98%<br />
(07)bps<br />
Profit from Operations<br />
653<br />
642<br />
1.7%<br />
1,704<br />
1,777<br />
-4.1%<br />
Profit After Tax<br />
436<br />
395<br />
10.4%<br />
1,183<br />
1,148<br />
3.0%<br />
Earnings per Share (Restated) Rs.<br />
10.00<br />
9.05<br />
10.4%<br />
27.13<br />
26.33<br />
3.0%<br />
The Company revenue growth achieved at 7.5% was only marginally higher for the quarter ended<br />
March 31, 2013 due to various reasons. Some of those include the continuing competitive pressure,<br />
as well as the unstable political and economic conditions. However, the Company was still able to<br />
achieve an increase of 10.4% in absolute Profit after tax. This was largely due to reduction in general<br />
& administrative expenses and increased income from investments.<br />
On a nine months basis, the Company has registered a growth of 8.2%. The decline in Gross Profit<br />
as a percentage of Net Sales was mainly caused by an adverse exchange rate movement, resulting<br />
in higher raw material costs coupled with increased depreciation expense due to major investments<br />
in plant & machinery.<br />
Selling & Distribution costs for the nine months ended increased by 12.2% owing to a needed<br />
increase in advertisement & sales promotion spend, employee related expenses and transportation<br />
costs. We have been able to reduce our administrative expenses by 0.6% with a strict control on<br />
costs applied by the management. As a result the net profit after tax for the nine months period<br />
increased by 3.0% in absolute terms.<br />
3
Home and Personal Care Categories<br />
Our focus remained on defending market share, as competitors' spend in all the key categories<br />
increased. Our new Integrated Marketing Communication Strategy in the Oral Care category helped<br />
in growing our share during this period. In Home Care, we continued the advertising and promotion<br />
investment to fortify our leadership in detergents and dish washing categories. Reaching consumers<br />
and shoppers for an experiential engagement with our brands remained at the core of all our<br />
promotional activations.<br />
Future Outlook<br />
It is a volatile time for businesses in <strong>Pakistan</strong>, as elections are around the corner and things are<br />
uncertain. The political condition of the country is fragile and coupled with the election factor, it is<br />
often difficult to execute strategic plans on time.<br />
The competition has been very aggressive, and is expected to intensify its' spending in our three<br />
main categories namely; toothpaste, dish washing and detergents.<br />
The perennial problems of the energy crisis, the weakening currency and the law & order situation<br />
will continue to deter uninterrupted business workings.<br />
Acknowledgement<br />
We thank our customers for their trust in our brands and our shareholders, bankers and suppliers<br />
for their continued support. We also thank our employees for their relentless efforts and acknowledge<br />
their continued support, commitment and loyalty.<br />
On behalf of Board of Directors<br />
Karachi : April 25, 2013<br />
IQBAL ALI LAKHANI<br />
Chairman<br />
4
CONDENSED INTERIM BALANCE SHEET (Unaudited - Note 2)<br />
As at March 31, 2013<br />
Note March 31,<br />
2013<br />
June 30,<br />
2012<br />
(Rupees in ’000)<br />
ASSETS<br />
NON-CURRENT ASSETS<br />
Long term loans 12,174 9,452<br />
Long term security deposits 13,552 10,712<br />
Property,plant and equipment<br />
Intangible assets<br />
5<br />
6<br />
3,142,091<br />
3,880<br />
2,863,125<br />
6,341<br />
3,171,697 2,889,630<br />
CURRENT ASSETS<br />
Stores and spares 70,137 64,952<br />
Stock in trade 7 2,149,490 2,852,671<br />
Trade debts 633,895 492,437<br />
Loans and advances 8 120,859 92,344<br />
Trade deposits and short term prepayments 9 63,694 20,198<br />
Other receivables 10 33,385 20,936<br />
Profit receivable from banks 283 29<br />
Taxation 313,223 369,239<br />
Short term investments - available for sale 11 964,330 255,329<br />
Cash and bank balances 991,331 837,882<br />
5,340,627 5,006,017<br />
TOTAL ASSETS 8,512,324 7,895,647<br />
EQUITY AND LIABILITIES<br />
SHARE CAPITAL AND RESERVES<br />
Authorised share capital<br />
75,000,000 ordinary shares of Rs.10 each 12 750,000 400,000<br />
Issued,subscribed and paid-up share capital 12 435,954 363,295<br />
Reserves 5,789,246 5,187,742<br />
Surplus on revaluation of investments - net of tax 20,057 3,189<br />
6,245,257 5,554,226<br />
LIABILITIES<br />
NON-CURRENT LIABILITIES<br />
Deferred taxation 465,561 458,872<br />
Long term deposits 17,654 14,748<br />
483,215 473,620<br />
CURRENT LIABILITIES<br />
Trade and other payables 13 1,783,844 1,867,778<br />
Accrued mark-up 8 23<br />
1,783,852 1,867,801<br />
TOTAL LIABILITIES 2,267,067 2,341,421<br />
CONTINGENCIES AND COMMITMENTS 14<br />
TOTAL EQUITY AND LIABILITIES 8,512,324 7,895,647<br />
The annexed notes 1 to 19 form an integral part of this condensed interim financial<br />
statements.<br />
Zulfiqar Ali Lakhani<br />
Chief Executive<br />
Tasleemuddin Ahmed Batlay<br />
Director<br />
5
CONDENSED INTERIM PROFIT AND LOSS ACCOUNT (Unaudited - Note 2)<br />
For the <strong>Quarter</strong> and Nine months period ended March 31, 2013<br />
Note<br />
<strong>Quarter</strong> ended<br />
March 31,<br />
2013<br />
<strong>Quarter</strong> ended<br />
March 31,<br />
2012<br />
(Rupees in ’000)<br />
Nine months<br />
period ended<br />
March 31,<br />
2013<br />
Nine months<br />
period ended<br />
March 31,<br />
2012<br />
Turnover 6,596,773 6,134,448 18,648,278 17,229,409<br />
Sales tax (995,587) (924,763) (2,814,035) (2,543,470)<br />
Trade discounts (374,786) (290,292) (991,504) (835,438)<br />
Net turnover 5,226,400 4,919,393 14,842,739 13,850,501<br />
Cost of sales (3,710,350) (3,404,825) (10,651,032) (9,789,130)<br />
Gross profit 1,516,050 1,514,568 4,191,707 4,061,371<br />
Selling and distribution costs (774,393) (786,717) (2,282,412) (2,035,091)<br />
Administrative expenses (46,738) (47,221) (135,265) (136,034)<br />
Other operating expenses (60,892) (55,939) (129,142) (153,749)<br />
Other operating income 19,092 16,893 59,195 40,599<br />
Profit from operations 653,119 641,584 1,704,083 1,777,096<br />
Finance cost (3,595) (3,770) (11,166) (13,944)<br />
Profit before taxation 649,524 637,814 1,692,917 1,763,152<br />
Taxation<br />
- Current - for the period 219,509 233,680 537,500 514,000<br />
- for prior years’ (1,817) - (31,864) -<br />
- Deferred (4,355) 9,520 4,505 101,304<br />
(213,337) (243,200) (510,141) (615,304)<br />
Profit after taxation 436,187 394,614 1,182,776 1,147,848<br />
Other comprehensive income for the period<br />
Surplus on investments categorised<br />
as 'available for sale’ 9,783 - 18,705 -<br />
Deferred tax (961) - (1,837) -<br />
8,822 - 16,868 -<br />
Total comprehensive income for the period 445,009 394,614 1,199,644 1,147,848<br />
Earnings per share (Rupees) - restated 15 10.00 9.05 27.31 26.33<br />
The annexed notes 1 to 19 form an integral part of this condensed interim financial statements.<br />
6<br />
Zulfiqar Ali Lakhani<br />
Chief Executive<br />
Tasleemuddin Ahmed Batlay<br />
Director
CONDENSED INTERIM STATEMENT OF CHANGES IN EQUITY (Unaudited Note -2)<br />
For the Nine months period ended March 31, 2013<br />
Balance as at July 1, 2011<br />
Comprehensive income for the period<br />
Net profit for the nine months period ended<br />
March 31, 2012<br />
Other comprehensive income<br />
Surplus on revaluation of investments - net of tax<br />
Transfer to general reserve<br />
Total other comprehensive income<br />
Total comprehensive income for the nine months<br />
period ended March 31, 2012<br />
Transactions with owners<br />
Final dividend for the year ended June 30, 2011<br />
(Rs 14 per share)<br />
Bonus shares issued at the rate of three share<br />
for every twenty shares held<br />
Total transactions with owners<br />
Balance as at March 31, 2012<br />
Balance as at July 1, 2012<br />
Issued,<br />
subscribed<br />
and paid up<br />
share capital<br />
315,909<br />
-<br />
-<br />
-<br />
-<br />
-<br />
-<br />
47,386<br />
47,386<br />
363,295<br />
363,295<br />
Capital<br />
reserveshare<br />
premium<br />
13,456<br />
-<br />
-<br />
-<br />
-<br />
-<br />
-<br />
-<br />
-<br />
13,456<br />
13,456<br />
Revenue reserves<br />
General<br />
Unappropriated<br />
reserve<br />
profit<br />
(Rupees in ‘000)<br />
2,870,000<br />
-<br />
-<br />
680,000<br />
680,000<br />
680,000<br />
-<br />
-<br />
-<br />
3,550,000<br />
3,550,000<br />
1,174,310)<br />
1,147,848)<br />
-<br />
(680,000)<br />
(680,000)<br />
467,848)<br />
(442,273)<br />
(47,386)<br />
(489,659)<br />
1,152,499)<br />
1,624,286)<br />
Surplus on<br />
revaluation<br />
of<br />
investments<br />
-<br />
-<br />
-<br />
-<br />
-<br />
-<br />
-<br />
-<br />
-<br />
-<br />
3,189<br />
Total<br />
4,373,675)<br />
1,147,848)<br />
-<br />
-<br />
-<br />
1,147,848)<br />
(442,273)<br />
-<br />
(442,273)<br />
5,079,250)<br />
5,554,226)<br />
Comprehensive income for the period<br />
Net profit for the nine months period ended<br />
March 31, 2013<br />
Other comprehensive income<br />
Surplus on revaluation of investments - net of tax<br />
-<br />
-<br />
-<br />
-<br />
-<br />
-<br />
1,182,776)<br />
-<br />
Transfer to general reserve<br />
-<br />
- 1,040,000 (1,040,000)<br />
Total other comprehensive income<br />
-<br />
- 1,040,000 (1,040,000)<br />
Total comprehensive income for the nine months<br />
period ended March 31, 2013<br />
-<br />
- 1,040,000 142,776)<br />
Transactions with owners<br />
Final dividend for the year ended June 30, 2012<br />
Bonus shares issued at the rate of one share<br />
for every five shares held<br />
Total transactions with owners<br />
Balance as at March 31, 2013<br />
(Rs 14 per share)<br />
72,659<br />
72,659<br />
435,954<br />
-<br />
-<br />
-<br />
13,456<br />
-<br />
-<br />
-<br />
4,590,000<br />
-<br />
(72,659)<br />
(581,272)<br />
1,185,790)<br />
(508,613)<br />
The annexed notes 1 to 19 form an integral part of this condensed interim financial statements.<br />
-<br />
16,868<br />
-<br />
16,868<br />
16,868<br />
-<br />
-<br />
-<br />
20,057<br />
1,182,776)<br />
16,868)<br />
-<br />
16,868)<br />
1,199,644)<br />
(508,613)<br />
-<br />
(508,613)<br />
6,245,257)<br />
Zulfiqar Ali Lakhani<br />
Chief Executive<br />
Tasleemuddin Ahmed Batlay<br />
Director<br />
7
CONDENSED INTERIM CASH FLOW STATEMENT (Unaudited - Note 2)<br />
For the Nine months period ended March 31, 2013<br />
Note<br />
Nine months<br />
period ended<br />
March 31,<br />
2013<br />
Nine months<br />
period ended<br />
March 31,<br />
2012<br />
(Rupees in ‘000)<br />
CASH FLOWS FROM OPERATING ACTIVITIES<br />
Cash generated from operations 16 2,357,133 1,506,992<br />
Staff retirement gratuity paid (20,467) (19,281)<br />
Finance costs paid (11,181) (14,051)<br />
Taxes paid (449,620) (505,859)<br />
Long term loans (2,722) 4,707<br />
Long term security deposits (2,840) (1,507)<br />
Long term deposits 2,906 892<br />
Net cash inflows from operating activities 1,873,209 971,893<br />
CASH FLOWS FROM INVESTING ACTIVITIES<br />
Fixed capital expenditure (568,728) (403,414)<br />
Purchase of Intangible assets (1,331) (2,188)<br />
Sale proceeds on disposal of property,plant and equipment 11,625 7,744<br />
Profit on bank deposits received 21,507 23,693<br />
Purchase of short term investment (1,400,000) (100,000)<br />
Profit on short term investment received 163 61<br />
Sale proceeds on redemption of short term investment 725,000 -<br />
Net cash outflows due to investing activities (1,211,764) (474,104)<br />
CASH FLOWS FROM FINANCING ACTIVITIES<br />
Dividend paid (507,996) (441,748)<br />
Net cash outflows due to financing activities (507,996) (441,748)<br />
Net increase in cash and cash equivalents 153,449 56,041<br />
Cash and cash equivalents at the beginning of the period 837,882 618,843<br />
Cash and cash equivalents at the end of the period 991,331 674,884<br />
The annexed notes 1 to 19 form an integral part of this condensed interim financial<br />
statements.<br />
8<br />
Zulfiqar Ali Lakhani<br />
Chief Executive<br />
Tasleemuddin Ahmed Batlay<br />
Director
NOTES TO AND FORMING PART OF THE<br />
CONDENSED INTERIM FINANCIAL STATEMENTS (Unaudited - Note 2)<br />
For the <strong>Quarter</strong> and Nine months period ended March 31, 2013<br />
1. STATUS AND NATURE OF BUSINESS<br />
<strong>Colgate</strong>-<strong>Palmolive</strong> (<strong>Pakistan</strong>) Limited (the Company) was initially incorporated in<br />
<strong>Pakistan</strong> on December 5, 1977 as a public limited Company with the name of National<br />
Detergents Limited. The name of the Company was changed to <strong>Colgate</strong>- <strong>Palmolive</strong><br />
(<strong>Pakistan</strong>) Limited on March 28, 1990 when the Company entered into a Participation<br />
Agreement with <strong>Colgate</strong>-<strong>Palmolive</strong> Company, USA.The Company is listed on the<br />
Karachi and Lahore Stock Exchanges. The registered office of the Company is situated<br />
at Lakson Square, Building No.2, Sarwar Shaheed Road, Karachi.<br />
The Company is mainly engaged in the manufacture and sale of detergents, personal<br />
care and other related products.<br />
2. STATEMENT OF COMPLIANCE<br />
2.1 This condensed interim financial statements of the Company for the nine months<br />
period ended March 31,2013 has been prepared in accordance with the requirements<br />
of the International Accounting Standard 34 - ‘Interim Financial <strong>Report</strong>ing’ and provisions<br />
of and directives issued under the Companies Ordinance,1984 (the Ordinance). In<br />
case where requirements differ, the provisions of or directives issued under the<br />
Ordinance have been followed.These interim financial statements should be read in<br />
conjunction with the financial statements for the year ended June 30,2012 as they<br />
provide an update of previously reported information.<br />
2.2 This condensed interim financial statements comprises of the condensed interim<br />
balance sheet as at March 31,2013 and the condensed interim profit and loss account,<br />
condensed interim statement of changes in equity and the condensed interim cash<br />
flow statement for the nine months period then ended.This condensed interim financial<br />
statements also includes the condensed interim profit and loss account for the quarter<br />
ended March 31,2013.<br />
2.3 The comparative condensed balance sheet, presented in this condensed interim<br />
financial statements, as at June 30,2012 has been extracted from the annual audited<br />
financial statements of the Company for the year ended June 30,2012 whereas the<br />
comparative condensed interim profit and loss account, condensed interim statement<br />
of changes in equity and condensed interim cash flow statement for the nine months<br />
period ended March 31,2012 are also included in this condensed interim financial<br />
statements.<br />
9
2.4 Standards, amendments to approved accounting standards and new<br />
interpretations becoming effective during the period ended March 31, 2013 :<br />
There are certain new standards, amendments and International Financial <strong>Report</strong>ing<br />
Interpretations Committee (IFRIC) interpretations that became effective during the<br />
period and are mandatory for accounting periods beginning on or after July 1,2012<br />
but are considered not to be relevant or have any significant effect on the Company's<br />
operations and are, therefore, not disclosed in this condensed interim financial<br />
statements.<br />
2.5 Standards, amendments to approved accounting standards and interpretations<br />
that are not yet effective and have not been early adopted by the Company :<br />
There are other amendments to the standards and new interpretations that are<br />
mandatory for accounting periods beginning on or after July 1, 2013 but are considered<br />
not to be relevant or do not have any significant effect on Company's operations and<br />
are, therefore, not detailed in this condensed interim financial statements.<br />
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES<br />
The accounting policies and the methods of computation adopted in the preparation<br />
of this condensed interim financial statements are the same as those applied in the<br />
preparation of the financial statements for the year ended June 30, 2012.<br />
4. ACCOUNTING ESTIMATES , JUDGEMENTS AND FINANCIAL RISK MANAGEMENT<br />
The preparation of this condensed interim financial statements in conformity with the<br />
approved accounting standards requires management to make estimates, assumptions<br />
and use judgments that affect the application of policies and reported amounts of<br />
assets and liabilities and income and expenses. Estimates, assumptions and judgments<br />
are continually evaluated and are based on the historical experience and other factors,<br />
including reasonable expectations of future events. Revision to accounting estimates<br />
are recognised prospectively commencing from the period of revision.<br />
Judgements and estimates made by the management in the preparation of this<br />
condensed interim financial statements are the same as those that were applied to<br />
financial statements as at and for the year ended June 30, 2012.<br />
5. PROPERTY, PLANT AND EQUIPMENT<br />
Note<br />
March 31,<br />
2013<br />
(Rupees in ‘000)<br />
June 30,<br />
2012<br />
Operating fixed assets - net book value 5.1 & 5.2 2,747,098 2,711,483<br />
Capital work-in-progress - at cost 5.4 394,993 151,642<br />
3,142,091 2,863,125<br />
10
5.1 Additions - operating fixed assets (at cost)<br />
Nine months<br />
period ended<br />
March 31,<br />
Nine months<br />
period ended<br />
March 31,<br />
2013<br />
2012<br />
(Rupees in ‘000)<br />
Leasehold Land - 18,214<br />
Factory building on leasehold land 8,744 6,303<br />
Plant and machinery 206,598 612,244<br />
Electric fittings and installation 3,920 19,184<br />
Furniture and fixtures 2,149 9,008<br />
Tools and equipment 7,015 97,117<br />
Vehicles 50,142 28,854<br />
Computers and accessories 37,840 14,313<br />
Office equipment 8,969 2,589<br />
325,377 807,826<br />
5.1.1 Additions include transfers from capital work-in-progress aggregating Rs 144.517<br />
million (March 31,2012: Rs 619.288 million).<br />
5.2 Disposals - operating fixed assets (at net book value)<br />
Vehicles 6,145 4,765<br />
Computers and accessories 68 108<br />
6,213 4,873<br />
5.3 Depreciation charge during the period 282,564 235,581<br />
5.4 Additions - Capital Work-in-Progress (at cost)<br />
Factory building on leasehold land 47,927 28,289<br />
Plant and machinery 303,905 161,412<br />
Electric fittings and installation 11,734 10,823<br />
Tools and equipment 12,863 3,150<br />
Furniture & fixture 733 9,181<br />
Office equipment 10,706 2,021<br />
387,868 214,876<br />
5.5 Included in fixed assets are few items having cost of Rs. 22.332 million (June<br />
30,2012: Rs. 22.332 million) held by related parties and Rs. 28.597 million (June<br />
2012: Rs. 43.614 million) held by third parties for manufacturing certain products<br />
for the Company.These fixed assets are free of lien and the Company has full<br />
rights of repossession of these assets.<br />
5.6 During the period, the Company has identified certain items of property, plant and<br />
equipment from which further economic benefits are no longer being derived.<br />
11
Therefore, assets having cost of Rs 4.872 million (March 31, 2012: Rs 6.606<br />
million) and net book value of Rs 0.985 million (March 31, 2012: Rs 1.355 million)<br />
have been retired from active use and have been written off in these financial<br />
statements. These items do not include any assets which have been fully depreciated<br />
in prior periods.<br />
6. INTANGIBLE ASSETS<br />
Note<br />
March 31,<br />
2013<br />
(Rupees in ‘000)<br />
June 30,<br />
2012<br />
6.1 Intangibles - net book value 6.2 & 6.3 3,880 6,341<br />
6.2 Additions - intangibles (at cost)<br />
Nine months<br />
period ended<br />
March 31,<br />
Nine months<br />
period ended<br />
March 31,<br />
2013<br />
2012<br />
(Rupees in ‘000)<br />
Computer Software 1,331 2,188<br />
6.3 Amortisation charge during the period 3,792 11,584<br />
7. STOCK IN TRADE<br />
March 31,<br />
2013<br />
(Rupees in ‘000)<br />
June 30,<br />
2012<br />
Raw and packing material 7.1 1,328,151 2,023,414<br />
Work-in-process 166,749 185,395<br />
Finished goods 654,590 643,862<br />
2,149,490 2,852,671<br />
7.1 Includes stock in transit aggregating to Rs 355.095 million (June 30,2012 : Rs<br />
666.364 million).<br />
8. LOANS AND ADVANCES<br />
12<br />
Considered good<br />
Current portion of long term loans<br />
- due from executives 1,162 2,309<br />
- due from other employees 7,622 6,949<br />
8,784 9,258<br />
Advances<br />
- to employees 8.1 8,630 9,411<br />
- to contractors and suppliers 8.2 103,445 73,675<br />
112,075 83,086<br />
120,859 92,344
8.1 Advances to employees are provided to meet business expenses and are settled<br />
as and when the expenses are incurred.<br />
8.2 Included in advances to contractors and suppliers is an amount of Rs. 0.357 million<br />
(June 30, 2012 Rs.1.956 million) given to related parties.<br />
Note March 31, June 30,<br />
2013<br />
2012<br />
9. TRADE DEPOSITS AND SHORT TERM PREPAYMENTS<br />
(Rupees in ‘000)<br />
Security deposits 9,647 4,885<br />
Prepayments 54,047 15,313<br />
63,694 20,198<br />
10. OTHER RECEIVABLES<br />
Receivable from related parties 10.1 15,626 6,426<br />
Value added tax claimable 5,394 5,421<br />
Special excise duty claimable 11,849 8,720<br />
Claims receivable from an insurance company 516 369<br />
33,385 20,936<br />
10.1 Other receivables include the following amounts due from related parties:<br />
Clover <strong>Pakistan</strong> Limited 39 639<br />
Tetley Clover (Private) Limited 10,470 5,778<br />
Rollins Industries (Private) Limited - 9<br />
Employee gratuity fund 5,117 -<br />
15,626 6,426<br />
March 31, June 30,<br />
2013<br />
2012<br />
No. of units<br />
11. SHORT TERM INVESTMENTS - AVAILABLE FOR SALE<br />
Balance as at July 1,2012 / 2011 2,531,959 -<br />
Purchases 13,944,945 5,968,430<br />
Bonus 356,303 52,190<br />
Redemptions (7,205,279) (3,488,661)<br />
Balance as at 9,627,928 2,531,959<br />
March 31, June 30,<br />
2013<br />
2012<br />
(Rupees in ‘000)<br />
Carrying value 942,089 251,793<br />
Market value 964,330 255,329<br />
Unrealised gain 22,241 3,536<br />
13
11.1 These represent investments made during the period in Lakson Money Market<br />
Fund, a related party of the Company and UBL Liquidity Plus Fund.<br />
12. SHARE CAPITAL<br />
12.1 Authorised share capital<br />
March 31, June 30,<br />
2013 2012<br />
(Number of shares)<br />
March 31, June 30,<br />
2013<br />
2012<br />
(Rupees in ‘000)<br />
75,000,000 40,000,000 Ordinary shares of 750,000 400,000<br />
Rs. 10 each<br />
12.1.1 Pursuant to a special resolution passed at the annual general meeting held on<br />
September 24,2012, the authorised share capital of the Company has increased<br />
from Rs 400 million to Rs 750 million and the relevant clauses in Memorandum<br />
and Articles of Association have been amended accordingly.<br />
12.2 Issued, subscribed and paid-up share capital<br />
March 31, June 30,<br />
2013 2012<br />
(Number of shares)<br />
March 31, June 30,<br />
2013<br />
2012<br />
(Rupees in ‘000)<br />
5,882,353 5,882,353 Ordinary shares of 58,824 58,824<br />
Rs. 10 each fully paid<br />
in cash<br />
37,713,037 30,447,139 Ordinary shares of 377,130 304,471<br />
Rs. 10 each issued<br />
as fully paid bonus<br />
shares<br />
43,595,390 36,329,492 435,954 363,295<br />
12.2.1 These shares include 7,265,898 bonus shares of Rs 10 each (June 30,2012:<br />
4,738,630 bonus shares of Rs 10 each) issued by the Company during the current<br />
period.<br />
14
13. TRADE AND OTHER PAYABLES<br />
Note<br />
March 31, June 30,<br />
2013<br />
2012<br />
(Rupees in ‘000)<br />
Trade creditors 13.1 457,945 554,043<br />
Accrued liabilities 13.2 593,749 342,285<br />
Bills payable 338,608 554,124<br />
Amounts due to distributors 38,857 31,159<br />
Sales tax payable 146,275 85,940<br />
Royalty payable to an associated undertaking 59,844 78,500<br />
Workers' profit participation fund 90,166 120,327<br />
Workers' welfare fund 32,500 82,136<br />
Retention money payable 4,980 5,447<br />
Unclaimed dividend 3,314 2,698<br />
Others 13.3 17,606 11,119<br />
1,783,844 1,867,778<br />
13.1 This includes Rs. 82.358 million (June 30,2012: Rs. 58.504 million) payable to<br />
related parties.<br />
13.2 This includes Rs. 2.188 million (June 30,2012: Rs. 1.280 million) payable to related<br />
parties.<br />
13.3 This includes Rs. 4.644 million (June 30,2012: Rs. 0.327 million) payable to related<br />
parties.<br />
14. CONTINGENCIES AND COMMITMENTS<br />
14.1 Contingencies<br />
14.1.1 As a result of a recovery suit of Rs 31.455 million along with interest at the rate of<br />
thirteen percent (13%) per annum filed by the Octroi Contractor against the<br />
Government of Sindh, Union Council Bulari and Kotri Association of Trade and<br />
Industries (KATI) in the Civil Court, the Honorable Senior Judge issued a decree<br />
of Rs 7.336 million in favor of Octroi Contractor. KATI had filed an appeal in the<br />
High Court of Sindh, whereas, the Octroi Contractor had also filed an appeal<br />
requesting to enhance the amount of decree. Subsequently, the case was transferred<br />
to the Additional District Judge Kotri by the High Court of Sindh. The District Judge<br />
allowed the appeal in favour of KATI and remanded the case to Senior Civil Judge<br />
Kotri for adjudication. The relevant case has been dismissed by the Senior Civil<br />
Judge in favor of KATI. Subsequently, the Octroi Contractor has filed an appeal in<br />
the District Court Jamshoro against the dismissal. If the Contractor's appeal is<br />
decided in its favor, then the Company, being a member of KATI, would be required<br />
to pay its share as determined by the Court out of the total decree amount. The<br />
management of the Company, based on the advice of its legal counsel handling the<br />
subject matter, is confident that the appeal will be decided in favor of KATI. Accordingly,<br />
no provision has been made in the financial statements on this account.<br />
15
14.1.2 Cases have been filed against the Company by some employees claiming<br />
approximately Rs 2.587 million (June 30,2012: Rs 0.804 million) in aggregate.<br />
Provision has not been made in these financial statements for the aforementioned<br />
amounts as the management of the Company is of the opinion that matters shall<br />
be decided in the Company's favor.<br />
14.1.3 Post dated cheques have been issued to custom authorities as a security in respect<br />
of duties and taxes amounting to Rs 234.976 million (June 30, 2012: Rs 360.031<br />
million) payable at the time of exbonding of imported goods.In the event the goods<br />
are not cleared from custom warehouse within the prescribed time period,cheques<br />
issued as security shall be encashable.<br />
14.1.4 Contingent liabilities in respect of indemnities given to financial institutions for<br />
guarantees issued by them on behalf of the Company in the normal course of<br />
business aggregate Rs.29.547 million (June 30,2012 - Rs. 29.547 million).<br />
14.2 Commitments<br />
14.2.1 Commitments in respect of capital expenditure amount to Rs. 99.060 million (June<br />
30,2012:Rs. 222.852 million).<br />
14.2.2 Outstanding letters of credit and acceptances amount to Rs. 735.375 million (June<br />
30,2012:Rs. 500.560 million).<br />
14.2.3 Outstanding duties leviable on clearing of stocks amount to Rs. 6.725 million (June<br />
30,2012:Rs. 12.612 million).<br />
15. EARNINGS PER SHARE<br />
<strong>Quarter</strong> ended<br />
March 31,<br />
2013<br />
<strong>Quarter</strong> ended<br />
March 31,<br />
2012<br />
(Rupees in ’000)<br />
Nine months<br />
period ended<br />
March 31,<br />
2013<br />
Nine months<br />
period ended<br />
March 31,<br />
2012<br />
Profit after taxation 436,187 394,614 1,182,776 1,147,848<br />
(Number of shares)<br />
Weighted average number of<br />
ordinary shares outstanding<br />
during the period (restated) 43,595,390 43,595,390 43,595,390 43,595,390<br />
(Rupees)<br />
Earnings per share (restated) 10.00 9.05 27.13 26.33<br />
16<br />
15.1 There were no dilutive potential ordinary shares outstanding as at March 31, 2013 and March<br />
31, 2012.
Note<br />
16. CASH GENERATED FROM OPERATIONS<br />
Nine months<br />
period ended<br />
March 31,<br />
2013<br />
Nine months<br />
period ended<br />
March 31,<br />
2012<br />
(Rupees in ‘000)<br />
Profit before taxation 1,692,917 1,763,152<br />
Adjustment for non-cash charges and other items:<br />
Depreciation and amortisation expense 286,356 247,165<br />
Gain on disposal of property,plant and equipment (5,413) (2,873)<br />
Provision for staff retirement gratuity 15,350 14,461<br />
Property,plant and equipment written off 985 1,355<br />
Provision for doubtful debts - 75<br />
Profit on savings and term deposit accounts (21,760) (24,098)<br />
Profit on short term investment (163) (61)<br />
Gain on redemption of short term investment (14,949) -<br />
Finance costs 11,166 13,944<br />
Stocks written off 2,225 -<br />
Net exchange loss 4,512 7,420<br />
Working capital changes 16.1 385,907 (513,548)<br />
2,357,133 1,506,992<br />
16.1 Working capital changes<br />
Decrease / (Increase) in current assets:<br />
Stores and spares (5,185) (32,423)<br />
Stock in trade 700,956 (479,871)<br />
Trade debts (141,458) (220,801)<br />
Loans and advances (28,515) (34,446)<br />
Trade deposits and short term prepayments (43,496) (20,321)<br />
Other receivables (7,332) 28,623<br />
474,970 (759,239)<br />
(Decrease) / Increase in current liabilities:<br />
Trade and other payables (89,063) 245,691<br />
385,907 (513,548)<br />
17. RELATED PARTIES<br />
17.1 Disclosure of transactions between the Company and related parties<br />
The related parties comprise associated companies, staff retirement funds, directors<br />
and key management personnel. The Company in the normal course of business<br />
carries out transactions with various related parties. Significant balances and<br />
transactions with related parties are as follows:<br />
17
Nature of Transaction<br />
Relationship<br />
with the<br />
Company<br />
Nine months<br />
period ended<br />
March 31,<br />
2013<br />
(Rupees in ‘000)<br />
Nine months<br />
period ended<br />
March 31,<br />
2012<br />
Sale of goods, services and reimbursement Associates /<br />
of expenses Related Party 761,157 646,269<br />
Purchase of goods and services received Associates /<br />
and reimbursement of expenses Related Party 2,916,667 2,598,104<br />
Purchase of short term investments Associates 1,200,000 100,000<br />
Sale proceeds on redemption of short<br />
term investments Associates 725,000 -<br />
Profit on short term investments Associates 163 61<br />
Rent, allied and other charges<br />
Associates/<br />
Related Party 19,830 17,611<br />
Royalty charges Associates 59,844 58,579<br />
Insurance claims received Associates 3,409 6,927<br />
Insurance commission income Associates 5,083 6,915<br />
Purchase of property,plant and equipment Associates 5,942 2,505<br />
Sale of property,plant and equipment Associates - 1,200<br />
Contribution to staff retirement benefits<br />
Retirement<br />
benefit fund 30,840 27,609<br />
Key management personnel compensation Directors 28,599 24,964<br />
Donation Associates 11,700 12,850<br />
Dividend paid<br />
Associates/<br />
Related Party 447,330 404,887<br />
March 31, June 30,<br />
2013<br />
2012<br />
(Rupees in ‘000)<br />
Receivable against sale of goods Associates 73,702 50,747<br />
Loans and advances Associates Refer note 8<br />
Other receivables from related parties Associates Refer note 10<br />
Royalty payable to associated undertaking Associates Refer note 13<br />
Due from gratuity fund<br />
Retirement<br />
benefit fund Refer note 10<br />
Payable against purchase of goods Associates Refer note 13<br />
18
18. ENTITY-WIDE INFORMATION<br />
18.1 The Company constitutes of a single reportable segment, the principal classes of<br />
which are Personal Care, Home Care and Others.<br />
18.2 Information about products<br />
The Company's principal classes of products accounted for the following percentages<br />
of sales :<br />
Nine months Nine months<br />
period ended period ended<br />
March 31, March 31,<br />
2013<br />
2012<br />
----------------- % ------------------<br />
Personal Care 21% 21%<br />
Home Care 75% 75%<br />
Others 4% 4%<br />
100% 100%<br />
18.3 Information about geographical areas<br />
The Company does not hold non-current assets in any foreign country. Revenues<br />
from external customers attributed to foreign countries in aggregate are not material.<br />
18.4 Information about major customers<br />
The Company does not have transactions with any external customer which amount<br />
to 10 percent or more of the entity's revenues.<br />
19. DATE OF AUTHORISATION FOR ISSUE<br />
This condensed interim financial statements were authorised for issue on April 25,<br />
2013 by the Board of Directors of the Company.<br />
Zulfiqar Ali Lakhani<br />
Chief Executive<br />
Tasleemuddin Ahmed Batlay<br />
Director<br />
19
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