MIRA INFORM REPORT

Report Date :

24.08.2011

IDENTIFICATION DETAILS

Name :	COLGATE-PALMOLIVE (PAKISTAN) LIMITED

Formerly Known As :	National Detergents Limited

Registered Office :	Lakson Square, Building No. 2, Sarwar Shaheed Road, Karachi-74200

Country :	Pakistan

Financials (as on) :	30.06.2010

Year of Establishment :	1977

Com. Reg. No.:	0005832

Legal Form :	Public Limited Company

Line of Business :	manufacture and sale of detergents, personal and other related products

RATING & COMMENTS

MIRA’s Rating :

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Status :	Satisfactory
Payment Behaviour :	No Complaints
Litigation :	Clear

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – March 31^st, 2011

Country Name

Previous Rating

(31.12.2010)

Current Rating

(31.03.2011)

Pakistan

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

Business Name

COLGATE-PALMOLIVE (PAKISTAN) LIMITED

Full Address

Registered Address

Lakson Square, Building No. 2, Sarwar Shaheed Road, Karachi-74200, Pakistan

Tel #	92 (21) 35698000, 35685135
Fax #	92 (21) 35684712, 35683410
Website	www.colgate.com.pk

Short Description Of Business

a.	Nature of Business	Company is mainly engaged in the manufacture and sale of detergents, personal and other related products.
b.	Year Established	1977
c.	Registration #	0005832

Factory Location

G-6, S.I.T.E. Kotri

District Jamshoro (Sindh)

Pakistan

Branches

In Karachi, Lahore, Rawalpindi, Multan, Peshawar & Quetta

Auditors

A.F. Ferguson & Co.

(Chartered Accountants)

Legal Status

Colgate-Palmolive (Pakistan) Limited was initially incorporated in Pakistan on December 5, 1977 as a public limited company with the name of National Detergents Limited. The name of the company was changed to Colgate-Palmolive (Pakistan) Limited on March 28, 1990 when the company entered into a Participation Agreement with Colgate-Palmolive Company, USA. The company is listed on the Karachi and Lahore Stock Exchanges.

Details of Chairman/Directors

Names

Designation

Mr. Iqbal Ali Lakhani

Mr. Zulfiqar Ali Lakhani

Mr. Amin Mohammed Lakhani

Mr. Tasleemuddin Ahmed Batlay

Mr. Peter Justin Skala

Mr. Peter John Graylin

Mr. A. Aziz H. Ebrahim

Mr. Derrick Samuel

Mr. Jerome Graham Webb

Chairman

Chief Executive

Director

Categories of Shareholders

Categories

Shareholding (%)

Directors, Chief Executive Officer, and their spouse and minor children

Associated Companies, undertakings and related parties

NIT and ICP

Banks, Development Financial Institutions, Non Banking Financial Institutions

Insurance Companies

Modarabas and Mutual Funds

Share holders holding 10%

General Public

a. Local

b. Foreign

1.44

41.21

0.002

0.02

0.04

0.02

71.02

6.90

0.09

Associated Companies

(1) Century Paper & Board Mills Limited, Pakistan.

(2) Cyber Internet Services (Pvt) Limited, Pakistan.

(3) Century Insurance Company Limited, Pakistan.

(4) Tritex Cotton Mills Limited, Pakistan.

(5) Clover Foods Pakistan Limited, Pakistan.

(6) Merit Packaging Limited, Pakistan.

(7) Siza Foods (Pvt) Limited, Pakistan.

(8) Reliance Chemicals Limited, Pakistan.

(9) Century Power Generation Limited, Pakistan.

(10) Accuray Surgicals Ltd, Pakistan.

(11) Siza (Pvt) Limited, Pakistan.

(12) Siza Services (Pvt) Limited, Pakistan.

(13) Siza Commodities (Pvt) Limited, Pakistan.

(14) Premier Fashions (Pvt) Limited, Pakistan.

Principle Activities

Company is mainly engaged in the manufacture and sale of detergents, personal and other related products.

Number of Employees

480

Plant Capacity & Production

The capacity and production of the company’s plant is indeterminable as it involves varying processes of manufacture.

Annual Sales Turnover

Year	In Pak Rupees
2010	14,583,936,000/-

Distributors Network

Mainly in all major cities of Pakistan.

Bankers

· Faysal Bank Limited, Pakistan.

· Habib Metropolitan Bank Limited, Pakistan.

· Habib Bank Limited, Pakistan.

· The Hongkong & Shanghai Banking Corporation Ltd.

· Meezan Bank Limited, Pakistan.

· Muslim Commercial Bank Limited, Pakistan.

· National Bank of Pakistan, Pakistan.

· Oman International Bank S.A.O.G. , Pakistan

· Soneri Bank Limited, Pakistan.

· Standard Chartered Bank, Pakistan.

· United Bank Limited, Pakistan.

Business Overview

During the year ended June 30, 2010, the company registered growth in all of its profit indicators, namely gross profit +37.7%, operating profit +48.6% and profit after tax +53.6%. Our gross revenue and net revenue have grown by 4.2% and 2.3% respectively. Major increase in profit was due to the reduced cost of raw materials. Company's overheads remained under pressure as a result of high inflation as well as rupee devaluation. Frequent increases in electricity tariffs and power outages added substantially to our costs during the year. Furthermore, due to unstable law and order situation in the country, security cost as well as insurance cost, have increased. Company's operating cost has also registered an increase as a result of amortization of software consequent to implementation of Sales & Distribution system and SAP-ERP. All these factors have contributed to enhanced Selling and Distribution costs as well as Administrative costs which rose by 29.5% and 39.2% respectively. In order to defend our market share in an increasingly competitive environment, the Company has continued to invest heavily in its brands and their distribution. Consequently, advertising and sales promotion costs during the current year under review are 39.3% higher than last year. We believe that in the coming years, the Company will need to increase investment in its brands to withstand challenges surrounding the business environment. Despite the challenges, the Company's operating profit increased by 48.6% to Rs. 1.8 billion versus Rs. 1.2 billion during the previous year. The company has continued to focus on reassessing the changing needs of its customers, and investing in product quality and innovation. These changes along with inherent strength of its diverse portfolio, have helped the Company to attain its overall growth objective. Net profit after tax has increased by 53.6% to Rs. 1.2 billion. Correspondingly Earnings per Share rose to Rs. 41.92 versus Rs. 27.30 in the prior year.

Future Outlook

While we have continued with the pace of our progress in 2009-10, it is considered prudent on our part to state that tough market situations in the next financial year can be expected. Though recent trends have shown slight signs of macro economic stability, we believe this recovery in the country is still fragile and is threatened by the pressures building up on the fiscal account deficit, further energy shortages, persistent inflation, uncertainty hovering around the political front and continued disruptions on account of law and order situation. Furthermore the cost of basic raw materials have started to show an upward trend in the international market, which is likely to impact our margins in the up coming year. Business environment is also expected to remain difficult. However, we remain committed to investing in our brands to consolidate and expand market share and we are confident that our continued focus on consumer preferences & our own operational efficiencies will help us achieve our targets in the coming financial year.

Foreign Exchange Rates

Currency	Unit	Pakistani Rupee
US Dollar	1	Rs. 86.55
UK Pound	1	Rs. 142.20
Euro	1	Rs. 124.10

Financial Position

Sound

Comments

Lakson Group of Companies is engaged in diversified activities, which includes Chemical, Food & Allied, Tobacco, Fuel & Energy, Information Technology, Paper & Board, Surgical and Insurance etc. The group is well known and directors are resourceful and experienced businessmen. Trade relations are reported as fair. Payments to creditors etc are reported as normal. Company can be considered for normal business dealings at usual trade terms and conditions.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.45.69
UK Pound	1	Rs.75.29
Euro	1	Rs.65.77

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
----	NB	New Business	----

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

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This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.