ANNUAL REPORT 2019 - rb.com€¦ · The names of the reti ring directors are A kbar Ali Shah, Adil...
Transcript of ANNUAL REPORT 2019 - rb.com€¦ · The names of the reti ring directors are A kbar Ali Shah, Adil...
RB HYGIENE HOME PAKISTAN LIMITED
ANNUAL REPORT 2019
For the year ended
December 31, 2019
CONTENTS
Particulars Page Number
Company Information 3
Notice of Meeting 4
Report of the Directors to Shareholders 5
Key Operating and Financial Data 10
Auditor’s Report to the Members 11
Balance Sheet 15
Profit and Loss Account 16
Statement of Changes in Equity 17
Cash Flow Statement 18
Notes to and Forming Part of Financial Statements 19
Pattern of Share Holding 46
Form of Proxy 48
BOARD OF DIRECTORS
Mr.Akbar A. Shah Chairman and Chief Executive Officer
Mr. Adil Saeed Khan Director
Mr. Atif Hashmi Director
COMPANY SECRETARY
Mr. Kashif Hameed
BANKERS
Citibank, N.A Pakistan Branch
Standard Chartered Bank (Pakistan) Limited
Deutsche Bank AG
Habib Bank Limited
AUDITORS
KPMG Taseer Hadi & Co., Chartered Accountants
SOLICITORS
Orr Dignam & Co
REGISTRARS
FAMCO Associates (Private) Limited
8-F, Next to Hotel Farhan,
Nursery, Block-6, P.E.C.H.S
Shahra-e-Faisal, Karachi-74000
Tel: 92-21 34480101-5
COMPANY INFORMATION
Company Information
RB HYGIENE HOME PAKISTAN LIMITED
NOTICE OF MEETING NOTICE is hereby given that the 1st Annual General Meeting of the Company will be held at 10:00 am on Wednesday April 29, 2020 at the RB Factory, F-18, S.I.T.E, Mauripur, Sindh Industrial Trading Estate, Karachi, to transact the following business:
1. To receive and consider the Audited Accounts of the Company for the year ended December 31, 2019 and the Reports of the Directors and Auditors thereon.
2. To declare dividend at the rate of PKR 938 per share for the year ended December 31, 2019 as recommended by the Directors.
3. To elect three (03) directors of the Company for a period of three years in accordance with the provisions of the Companies Act 2017. The names of the retiring directors are Akbar Ali Shah, Adil Saeed Khan and Atif Hashmi.
4. To appoint auditors and fix their remuneration.
BY ORDER OF THE BOARD
KASHIF HAMEED COMPANY SECRETARY
27th March 2020 Karachi NOTES:
(1) The Directors of the Company have fixed, under S159(1) of the Companies Act 2017, the number of directors to be elected at three (03). All directors shall be eligible to offer themselves for re-election. Any person who seeks to contest election for directorship of the Company shall file with the Company at its registered office, tenancy 04, third floor, corporate offices block, dolmen city, HC-3, Block 4, Scheme 5, Clifton, Karachi- 75600, Pakistan, (a) notice of intention to offer himself/herself as a director not later than fourteen days before the date of the meeting at which elections are to be held (b) Form 28 (Consent to Act as Director) prescribed under S159(3) of the Companies Act 2017 and S167(1) of the Companies Act 2017.
(2) The Share Transfer Books of the Company will remain closed from 21st April 2020 to 29th April 2020 both days inclusive.
(3) A Member entitled to attend the Annual General Meeting is entitled to appoint a proxy to attend and vote instead of him/her. No person shall act as proxy (expect for a corporation) unless he/she is entitled to be present and vote in his/her own right. The completed proxy form must be received at the Registered Office of the Company not less than 48 hours before the Meeting.
(4) Members are Requested to Notify any change in their addresses immediately to office of share Registrars of the Company FAMCO Associates (Pvt) Limited, 8-F, Next to Hotel Faran, Nursery, Block-6 P.E.C.H.S, Shahra-e-Faisal, Karachi.
Notice of Meeting
REPORT OF THE DIRECTORS’ TO THE SHAREHOLDERS
The Directors of RB Hygiene Home Pakistan Limited (“RB”) have the pleasure of
presenting the Annual Report together with audited accounts of the Company for the year
ended December 31, 2019.
COMPANY’S PRINCIPAL ACTIVITIES
RB has been involved in the manufacture, marketing and sale of home hygiene products.
In line with our motto of doing “better business” we have continued to provide innovative
solutions for healthier lives and happier homes.
BUSINESS REVIEW
Key Financial Highlights
2019
PKR in ‘000s
Sales 5,931,017
Gross Profit 3,874,332
Profit from Operations 1,488,793
Profit before Tax 1,592,768
Profit after Tax 1,109,806
TRADING PERFORMANCE
2019 was a year of stronger performance for us, our sales and gross margins were
recorded at PKR 5.9 Billon and 3.9 Billion respectively, thereby delivering 8% and 9%
growth as compared to previous year. Our two front line brands HARPIC and MORTEIN
continued to serve as growth engines for the company due to combined efforts of
dedicated focus and better in market executions. Market conditions, however, remained
tougher followed by stricter controls of FBR over the trading and sales operations across
the country. The exchange rate depreciation followed by steep rise in interest rates
continued to challenge the economic growth in the country.
The profit before tax (PBT) for the year grew by 4% to PKR 1.6 Billion (27% of sales)
whereas the tax charge was PKR 483 Million during the year.
Report of the Directors to Shareholders
RB has adequate internal financial controls which are recognized under International
Financial Control Framework and RB Group policy.
Unappropriated profit being carried forward
The unappropriated profit as at 31-12-2019 was PKR 1.1 Billion which is being carried
forward for 2020.
Dividend
Earnings per share
2019
Rs. *1,069
*EPS for 2019 is based on the number of shares to be issued under the approved scheme
of arrangement.
The Board of Directors has recommended a final cash dividend of Rs. 938/- per share.
There was no interim dividend declared within 2019. Therefore, the total dividend for the
year 2019 amounts to Rs. 938/- per ordinary share of Rs.10 each.
DIRECTORS FOR 2019
Following served as the directors of the Company during 2019:
• Akbar Ali Shah (Chief Executive Officer)
• Adil Saeed Khan
• Munazza Kasmani
• Atif Hashmi Changes on Board of Directors
Ms. Munazza Farooq Kasmani resigned from the BOD (w.e.f. June 28, 2019) and Mr. Atif
Hashmi was appointed as Director (w.e.f. June 28, 2019) in place of Ms. Munazza Farooq
Kasmani.
Current Directors
• Akbar Ali Shah (Chief Executive Officer)
• Adil Saeed Khan
• Atif Hashmi PATTERN OF SHAREHOLDING AND HOLDING COMPANY
The pattern of shareholding has been annexed to this report Company’s Holding
Company is Reckitt Benckiser plc, which is incorporated in the United Kingdom.
PRINCIPAL RISK AND UNCERTAINTIES
We have a well established risk management framework and effective internal control
mechanism, which helps us identify the key risks impacting the business. The key
business risks include:
1- Slower economic growth including higher inflation and PKR/USD parity continue
to impact the business of the company. The devaluation adversely impacted the
imports of the company followed by continued restrictions on hedging by State
Bank of Pakistan.
2- The higher tax rates have also increased the inflationary pressures on the
economy, thereby potentially impacting the price increase initiatives of the
company.
3- The higher interest rates continue to challenge the economic growth and potential
of increase in demand in the economy. This in turn affects the company’s overall
growth targets for next year and onwards.
DISCLOSURE REGARDING RECONSTRUCTION OF COMPANY
Further to the disclosure in Reckitt Benckiser Pakistan Limited’s 2018 directors’ report
annexed with the annual report of the said company, the Scheme of Arrangement was
submitted for approval of shareholders in the extra ordinary general meeting of the
shareholders held on 26 June 2019. Subsequent to shareholders approval, creditors’
consent was also sought. The Hon’ble High Court of Sindh has also approved the Scheme
of Arrangement vide order dated 25 September 2019. The Scheme of Arrangement came
into operation on the date of submission of High Court order approving the Scheme to the
Securities & Exchange Commission of Pakistan vide Company letter dated 1 October
2019. The Board subsequently resolved that in order to facilitate the implementation of
the aforesaid Scheme of Arrangement and in compliance with the directions of the High
Court of Sindh in its order dated 25 September 2019, the Register of Members and Share
Transfer Books of RB Pakistan Limited be closed for a period of seven (7) days from 10
January 2020 to 16 January 2020, (both days inclusive. Consequently, the Register of
Members and Share Transfer Books were closed, and entitlement registers were
prepared for determining the new entitlements as at the Record Date. Once the new
entitlement were determined, the Board of Reckitt Benckiser Pakistan Limited approved
the allotment of shares accordingly to the Qualifying Shareholders (as defined in the
Scheme of Arrangement) on 21 January 2020. Subsequently, new share certificates are
ready for collection in accordance with the said Company’s notice to shareholders dated
03 January 2020.
OCCUPATIONAL SAFETY & HEALTH
RB recognizes the importance of occupational safety and health for all its employees. All
facilities of the company including the warehouses, are compliant with international safety
standards.
SOCIALLY POSITIVE ACTIVITIES – BUSINESS WITH A PURPOSE
The Company has been executing various socially beneficial to create awareness related
to hygiene through public service messages and purpose-led copies across various
media channels.
In addition, locally, we undertake several branded marketing activities but with an attempt
to incorporate socially responsible & beneficial messages. Below are some of the
campaigns that have been undertaken:
1. Dengue Ab Nahi – educating masses across various forums on how to prevent
oneself from mosquitoes that carry dengue to reduce the number of incidences of
the disease
2. Harpic Muhalla Program – educating homemakers on how to clean and maintain
hygienic toilets within their households to reduce disease incidence and ensure
safe sanitation
3. Harpic Heroes – recognizing and raising awareness around World Toilet Day
regarding the important role of cleaners (maids, sweepers, etc.) in providing a
clean and hygienic environment to live in
4. Harpic sponsored public toilet – supported the Ministry of Railway in building
public toilets for one of the platforms at the Lahore Railway Station
MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION FROM END OF FINANCIAL TILL DATE OF REPORT No such changes or commitments.
FUTURE PROSPECT OF PROFIT
RB has been on a well-established journey with a focused, strategic evolution from a
household cleaning company to a world leader in consumer health. As we look to the
future, we are well positioned for long term, sustainable growth, from the excellent
portfolio of brands within each of our more focused and agile Business Units. For 2020
we expect to continue our growth momentum through improved innovation pipeline,
robust go-to-market plan and investment behind Brands. Moreover, the demerger
provides a platform for future growth and outperformance in both companies. We remain
committed to executing on this important project and will continue to evaluate
opportunities to maximise shareholder value in the longer run.
TRADING RESULTS 2019
Rs in 000s
Sales and Services 5,931,017
Gross Profit 3,874,332
Profit before tax 1,592,768
Taxes 482,962
Net Earnings 1,109,806
BALANCE SHEET
Share Capital* -
Capital and Revenue Reserves 1,452,091
Other Reserves 10,379
Shareholders' Equity 1,462,470
Net deferred liabilities (4,154)
1,458,316
Represented by:
Fixed assets 104,446
Investment in equity accounted investee 6,250
Long term Loans/deposits -
Net current assets 1,347,620
1,458,316
STATISTICS
Gross profit in percentage of sales (%) 65.32
Profit before tax in percentage of sales (%) 26.85
Inventory turnover (times) 4.48
Total assets turnover (times) 1.87
Fixed asset turnover (times) 44.85
Current ratio 1.80
Return on capital employed (%) 75.89
Net earnings per share (Rs.) 1069.24
Dividend declared per share (Rs.) 938.00
KEY OPERATING AND FINANCIAL DATA
* The Share Capital of the company as at December 31, 2019 is PKR 30, being 03 qualification
shares issued to the direcotrs of the company. Subsequently, 1037,935 shares were issued in
accordance with the Scheme of Arrangement for reconstruction of Reckitt Benckiser Pakistan
Limited, approved by the Court.
Key Operating and Financial Data
Auditor’s Report to the Members
Balance Sheet
Profit and Loss Account
Statement of Changes in Equity
Cash Flow Statement
Notes to and Forming Part of Financial Statements
RB HYGIENE HOME PAKISTAN LIMITEDCATEGORIES OF SHAREHOLDINGAS AT DECEMBER 31, 2019
SNO. Shareholders CategoryNo. of
ShareholderNo. of Shares Percentage
1 Directors, Chief Executive Officer, and
their spouse and minor children (to be
confirm by Company)3 3 100
2 Associated Companies, Undertakings
and related Parties (to be confirm by
Company)
- - -
3 NIT and ICP4 Banks, Development Financial
Institutions, Non Banking Financial
Institutions
- - -
5 Insurance Companies6 Modarabas and Mutual Funds7 Share holders holding 10% - - -
8 General Public :a. local - - -
b .Foreign9 Others - - -
Total (excluding : share holders
holding 10%)3 3 100
RB HYGIENE HOME PAKISTAN LIMITEDPATTERN OF SHAREHOLDINGAS AT DECEMBER 31, 2019
NO OF SHAREHOLDERS FROM TO TOTAL SHARES
3 1 100 3
3 3
NO. OF SHARESHOLDINGS
Pattern of Share Holding
RB HYGIENE HOME PAKISTAN LIMITEDCATEGORIES OF SHAREHOLDINGAS AT JANUARY 31, 2020
SNO. Shareholders CategoryNo. of
ShareholderNo. of Shares Percentage
1 Directors, Chief Executive Officer, and their spouse and minor
children (to be confirm by Company) 3 3 0
2 Associated Companies, Undertakings and related Parties (to be
confirm by Company) - - -
3 NIT and ICP
4 Banks, Development Financial Institutions, Non Banking Financial
Institutions- - -
5 Insurance Companies
6 Modarabas and Mutual Funds
7 Share holders holding 10% - - -
8 General Public :
a. local - - -
b .Foreign
9 Others - - -
Total (excluding : share holders holding 10%)3 3 0
RB HYGIENE HOME PAKISTAN LIMITEDPATTERN OF SHAREHOLDINGAS AT JANUARY 31, 2020
NO OF SHAREHOLDERS FROM TO TOTAL SHARES
374 1 100 6,142 23 101 500 4,124
4 501 1,000 3,500
1 365,001 370,000 366,574 1 655,001 660,000 657,598
403 1,037,938
NO. OF SHARESHOLDINGS
The Company Secretary
RB Hygiene Home Pakistan Limited
3rd Floor, Tenancy 04, Corporate Office Block,
Dolmen City, HC Block 4,
Scheme 5, Clifton
Karachi
I / We ____________________________________________________________________________________________________________
of ____________________________________________________________________________________________________(full address)
being a member of RB Hygiene Home Pakistan Limited hereby appoint ________________________________________________________
of _____________________________________________________________________________________________________(full address)
or failing him ______________________________________________________________________________________________________
of ____________________________________________________________________________________________________(full address)
another member of the Company to attend and vote for me / us and on my / our behalf at the First Annual General Meeting of
the Company to be held on the 29th day of April 2020 and at any adjournment thereof.
As witness my / our hand this __________________ day of ___________________ 2020.
Witness No. 1
Name ____________________________________
Address ____________________________________
____________________________________
____________________________________
CNIC No. ____________________________________ ___________________________________________________
Signature of Member(s)
Witness No. 2
Name ____________________________________ ___________________________________________________
Address ____________________________________ (Name in Block letters)
____________________________________ Folio No. ________________________________________
____________________________________
CNIC No. ____________________________________
Important:
1. A member entitled to attend a General Meeting is entitled to appoint a proxy to attend and vote instead of him / her. No person shall act
as a Proxy (except for a corporation) unless he / she is entitled to be present and vote in his / her own right.
2. Members are requested:
(a) to sign in the same style of signature as is registered with the Company.
(b) to write down their Folio Numbers at the place indicated above.
3. The instrument appointing a proxy, together with the Board of Directors' resolution / Power of Attorney (if any) under which it is signed
or a notarially certified copy thereof, should be deposited at the Registered Office not less than 48 hours before the time for holding the
meeting.
FORM OF PROXY
Form of Proxy