2014 PZ Cussons Ghana Limited Annual Report & Accounts 2014 ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MAY 2014 ... makes things better ...makes better things PZ CUSSONS GHANA LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MAY 2014 Our History Patterson Zochonis (PZ) was formed in Ghana (then Gold Coast) in 1934. Paterson Zochonis Ghana became a Public Company in 1976, and was listed on the Ghana Stock Exchange within 12 months of its inception, in 1990. From the early activities of importing, exporting and general trading, an industrial base was established in 1969. Consequent to the Economic recovery Programme instituted by the Government at the time, opportunity was taken in the late 80’s and 90’s to rejuvenate PZ’s industrial potential, concentrating on Health Care and Beauty products. Effective 1st June, 2002, the group underwent a change in name, from Patterson Zochonis to PZ Cusssons. The objective of the change was to unify the Group further under one identity and to refresh and modernize our corporate image. With a solid product portfolio that includes a number of well established brands such as Camel Antiseptic, Imperial Leather, Nunu Milk, Haier Thermocool, Carex, Duck, Drastin, Premier, Robb, Cussons Baby, PZ Cussons can look at the future with great confidence. Our vision is driven by our commitment to continue to expand our business through providing the consumers with goods of the highest quality standards at affordable prices, while making reasonable profit and maintaining our strong family values and respect for the environment in which we operate. ... makes things better ...makes better things iii PZ CUSSONS GHANA LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MAY 2014 P Z CUSSONS GHANA LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MAY 2014 ... makes things better ...makes better things PZ CUSSONS GHANA LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MAY 2014 CONTENTS Corporate information...................................................................................................1 Notice of meeting..........................................................................................................2 Chairman’s statement...................................................................................................3 Financial highlights.......................................................................................................4 Corporate governance..................................................................................................5 Directors’ report............................................................................................................6 Statement of directors’ responsibilities.........................................................................7 Independent auditor’s report........................................................................................8 FINANCIAL STATEMENTS: Statement of financial position...................................................................................10 Statement of comprehensive income.........................................................................11 Statement of changes in equity..................................................................................12 Statement of cash flows.............................................................................................13 Notes..........................................................................................................................16 - 43 Shareholders’ information...........................................................................................44 - 47 ... makes things better ...makes better things v PZ CUSSONS GHANA LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MAY 2014 ... makes things better ...makes better things vi PZ CUSSONS GHANA LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MAY 2014 CORPORATE INFORMATION Directors Paul K. Pepera (Chairman) James Berkeley Judson (Managing Director) Philip William Davies Charles B. Janney Helena Adu-Gyamfi Christopher Davis Secretary Accra Nominees Limited 2nd Floor, Cedar House 13 Samora Machel Road Asylum Down P. O. Box GP242 Accra - Ghana Registered office Plot 27/3 - 27/7 Sanyo Road Tema Heavy Industrial Area P. O. Box 628 Accra, Ghana Auditor PricewaterhouseCoopers Chartered Accountants No.12, Airport City UNA Home, 3rd Floor PMB CT 42 Cantonments Accra Solicitors Minka-Premo & Co P O Box 14951 Accra Legal Ink (Lawyers and Notaries) No F89/7 Emmaus Road Off 2nd Labone Street PMB 24 Kanda Accra Bankers Access Bank (Ghana) Limited Barclays Bank of Ghana Limited Ecobank Ghana Limited Ghana Commercial Bank Limited Guaranty Trust Bank (Ghana) Limited Standard Chartered Bank Ghana Limited Stanbic Bank Ghana Limited United Bank for Africa (Ghana )Limited Zenith Bank (Ghana) Limited Registrars Universal Merchant Bank Limited ... makes things better ...makes better things 1 PZ CUSSONS GHANA LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MAY 2014 NOTICE OF MEETING NOTICE is hereby given that the 56th Annual General Meeting of the Shareholders of PZ Cussons Ghana Limited will be held at the Ghana-India Kofi Annan Centre for Excellence in ICT, Ringway Estates, Accra (near the Ghana Institute of Journalism) on Friday September 26, 2014 at 11 O’clock in the forenoon to transact the following: AGENDA ORDINARY BUSINESS 1. To receive and consider the Reports of the Directors, Auditors and the Audited Financial Statements for the year ended May 31, 2014. 2. To appoint Directors. 3. To re-elect Directors. 4. To fix the remuneration of the Directors. 5. To authorise the Directors to fix the remuneration of the Auditors for the ensuing year. Dated this 16th day of July, 2014 By order of the Board ACCRA NOMINEES LIMITED COMPANY SECRETARIES Note: A member of the Company entitled to attend and vote may appoint a proxy to attend and vote in his/her stead. A proxy need not be a member of the Company. Completed proxy forms should be deposited at the offices of the Registrars, Universal Merchant Bank Limited, Ridge, Accra not less than 48 hours before the appointed time of the meeting. Failure to submit the forms before the 48 hour deadline will result in the Proxy not being admitted to, or participating in, the meeting. A Form of Proxy is provided in the Annual Report. ... makes things better ...makes better things 2 PZ CUSSONS GHANA LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MAY 2014 CHAIRMAN’S STATEMENT The Global economy continues to Much of this growth is the result of our we anticipate increased pressure on slowly recover after a number of continued investment in distribution margins and volume growth. years of contraction. Within Ghana, and brand equity building activities the year has been characterised by for our focus brands. Our brand We remain confident that the effects the depreciation of the Ghana cedi, activation continues to grow and our of our ongoing investment in our which has moved throughout the growing market shares are reflecting brands, our distribution, our supply financial year under review, by about these growing brand equities. chain and our people and processes 50%. will continue however, to deliver In terms of our operating profit, improved results. The challenges that we highlighted we have seen the impact of the last year, rapid Ghana Cedi significant devaluation of the Ghana We are committed to further devaluation, creeping inflation and Cedi on our costs, with an operating increasing shareholders’ value from falling prices for our major export loss before exceptional items of our focus on delivering quality, value commodities of cocoa and gold, GH¢0.7 million (FY13 operating profit and innovation through our products all continued throughout the year, before exceptional items of ¢10.8 and services to our Ghanaian creating a significant shift and million). Loss before tax, including consumers, whilst ensuring we worsening of the macro economic impact of exceptional items was continue to fulfil our corporate and outlook for Ghana. GH¢2.5 million (FY13 Profit before social responsibilities. tax of ¢10.0 million). With this in At PZ Cussons Ghana we have mind, the Board proposes not to pay At this point, I would like to extend maintained our record of strong dividend this year. my thanks and appreciation to our growth during the period, with total Management and Staff whose hard sales revenue increasing by over 12% During the year under review, Mrs work, commitment and continuous and sales to 3rd Parties growing 13%. Helena Adu-Gyamfi resigned from focus on improvement and change, Strong gains continue to be recorded the employment of the Company for in a very demanding external for all our focus brands, which have personal reasons; but has agreed to environment have been the major all recorded ‘double digit’ growth. maintain her position as a Director of driving force in delivering this year’s Our Camel, Cussons Baby, Robb the Company. performance. and Carex brands continue to enjoy strong number one positions in their The outlook for our business is respective categories. In the year, that 2014/2015 will continue to we have also seen record shares for be influenced by the continued many of our focus brands. weakness of the Ghana Cedi and Paul Kwabena Pepera ... makes things better ...makes better things 3 PZ CUSSONS GHANA LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS