| Lakson Tobacco Company Limited |
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| Annual
Report 2000 |
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| CONTENTS |
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| Company
Information |
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| Notice
of Meeting |
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| Directors'
Report |
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| Auditors'
Report to the Members |
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| Balance Sheet |
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| Profit
& Loss Account |
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| Cash
Flow Statement |
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| Statement
of Changes in Equity |
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| Notes
to the Accounts |
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| Pattern
of Holding of Shares |
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| Subsidiary
Company's Accounts |
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| Premier
Tobacco Company (Pvt) Limited |
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| Financial
Highlights |
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| Company
Information |
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| BOARD
OF DIRECTORS |
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| IQBALALI
LAKHANI |
|
(Chairman & Chief
Executive) |
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| AMIN
MOHAMMED LAKHANI |
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| E.A. NOMANI |
|
| TASLEEMUDDIN
AHMED BATLAY |
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| NAZIR
HUSSAIN |
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| AZIZ
EBRAHIM |
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| SHAHID
AHMED KHAN |
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| RAMZANALI
HALANI |
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| M.K. NAWAZ |
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| MANSOOR
AHMED |
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| ADVISOR |
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| SULTANALI
LAKHANI |
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| COMPANY
SECRETARY |
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| RAMZANALI
HALANI |
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| AUDITORS |
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| A.F.
FERGUSON & CO. |
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| Chartered
Accountants |
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| EBRAHIM
& CO. |
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| Chartered
Accountants |
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| REGISTERED
OFFICE |
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| LAKSON
SQUARE, BUILDING NO. 2 |
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| SARWAR
SHAHEED ROAD |
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| KARACHI-74200 |
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| FACTORIES |
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| 1.
E/15, S.I.T.E., KOTRI |
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| DISTT.
DADU, (SINDH) |
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| 2.
PLOT NO. 20, SECTOR NO. 17 |
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| KORANGI
INDUSTRIAL AREA, KARACHI |
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| 3.
QUADIRABAD |
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| DISTT.
SAHIWAL |
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| 4.
VILLAGE: MANDRA |
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| TEH:
GUJAR KHAN |
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| DISTT.
RAWALPINDI |
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| 5. ISMAILA |
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| DISTT. SWABI |
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| Notice
of Meeting |
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| NOTICE
IS HEREBY GIVEN that the 31st Annual General Meeting of
Lakson Tobacco Company Limited will be held |
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| at
Avari Renaissance Towers Hotel, Fatima Jinnah Road, Karachi on Friday
December 22, 2000 at 9.30 a.m. to transact |
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| the
following business: |
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| ORDINARY
BUSINESS |
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| 1.
To receive, consider and adopt the audited Balance Sheet and Profit and Loss
Account for the year ended June |
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| 30,
2000 together with the Directors' and Auditors' Reports thereon. |
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| 2.
To declare final dividend in cash @ 80% and by way of issue of fully paid
bonus shares @ 50% as recommended |
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| by
the Board of Directors. |
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| 3.
To consider to appoint auditors and fix their remuneration. |
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| SPECIAL
BUSINESS |
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| 4.
To consider to increase the Authorised Capital of the Company from Rs. 300
million to Rs. 450 million and if thought |
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| fit
to pass the following resolution as an ordinary resolution: |
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| "RESOLVED
THAT the Authorised Capital of the Company be and is hereby
increased from Rs. 300 million to Rs. |
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| 450
million by creation of 15 million ordinary shares of Rs. 10/- each and that
consequential notes be made under |
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| clause
V of the Memorandum of Association and Article 3 of the Articles of
Association." |
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| 5.
To consider, subject to declaration of the final dividend by way of issue of
bonus shares as above, to capitalise a |
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| sum
of Rs. 118,789,240/- by way of issue of 11,878,924 fully paid bonus shares of
Rs. 10/- each and if thought fit |
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| to
pass the following resolution as an ordinary resolution: |
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| "RESOLVED
THAT: |
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| i)
a sum of Rs. 118,789,240/- out of the 'reserve for issue of bonus shares' be
capitalised and applied in making |
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| payment
in full 11,878,924 ordinary shares of Rs. 10/- each and that the said shares
be allotted as fully paid |
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| up
bonus shares to those members of the Company whose names appear in the
register of members on |
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| December
22, 2000 @ 50% i.e. in the proportion of one share for every two existing
shares and that such new |
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| shares
shall rank pari passu in all respects with the existing ordinary shares of
the Company except that they |
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| shall
not be eligible for dividend declared for the year ended June 30, 2000; |
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| ii)
in the event of any member holding less than two shares or a number of shares
which is not an exact multiple |
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| of
two, the fractional entitlements of shares of such members shall be
consolidated into whole new shares and |
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| the
Directors of the Company be and are hereby authorised to arrange sale of the
shares constituted thereby |
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| in
such manner as they may think fit and to pay the proceeds of the sale to such
of the members according |
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| to
their entitlement; |
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| iii)
for the purpose of giving effect to the above, the Directors be and are
hereby authorised to take all necessary |
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| steps
in the matter and to settle any question or difficulties that may arise in
regard to the distribution of the |
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| said
new shares as they think fit." |
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| The
statement under section 160 of the Companies Ordinance, 1984 in the above
matters is annexed. |
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By Order of the Board |
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|
RAMZANALI HALANI |
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| Karachi:
November 14, 2000 |
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Director/Company Secretary |
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| NOTES: |
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| 1.
The share transfer books of the Company will remain closed from December 11,
2000 to December 22, 2000, |
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| both
days inclusive. Transfers received in order at the Company's registered
office situated at Lakson Square, |
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| Building
No. 2, Sarwar Shaheed Road, Karachi upto December 10, 2000 will be considered
in time to be eligible |
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| for
payment of the dividend and issue of bonus shares to the transferees. |
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| 2.
A member who has deposited his/her shares into Central Depository Company of
Pakistan Limited, must bring his/ |
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| her
participant's ID number and account/sub-account number alongwith original
National Identity Card (NIC) or |
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| original
Passport at the time of attending the meeting. |
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| 3.
A member entitled to attend and vote at the general meeting may appoint
another member as his/her proxy to |
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| attend,
speak and vote instead of him/her. |
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| 4.
If a proxy is granted by a member who has deposited his/her shares in Central
Depository Company of Pakistan |
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| Limited,
the proxy must be accompanied with participant's ID number and
account/sub-account number alongwith |
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| attested
photocopies of NIC or the Passport of the beneficial owner. Representatives
of corporate members should |
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| bring
the usual documents required for such purpose. |
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| 5.
Forms of proxy to be valid must be received at the Company's registered
office not later than 48 hours before the |
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| time
of the meeting. |
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| 6.
Members are requested to notify the Company promptly of any change in their
addresses. |
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| 7.
A form of proxy is enclosed herewith. |
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| STATEMENT
UNDER SECTION 160 OF THE COMPANIES ORDINANCE, 1984 |
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| 1.
At present the Authorised Capital of the Company is Rs. 300 million. Upon
issuance of the bonus shares as above, |
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| the
paid-up capital of the Company shall stand increased to Rs. 356,367,720/-.
The Directors have therefore |
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| recommended
to increase the Authorised Capital to Rs. 450 million to facilitate increase
in the paid-up capital as |
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| and
when required to do so. |
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| 2.
The Board of Directors has recommended to the members of the Company to
declare final cash dividend @ 80% |
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| and
by way of issue of fully paid bonus shares @ 50% and thereby capitalise a sum
of Rs. 118,789,240/- which |
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| has
been transferred to 'reserve for issue of bonus shares' out of the profit for
the year ended June 30, 2000. |
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| The
Directors are interested in this business to the extent of their entitlement
of bonus shares as shareholders. |
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| Directors'
Report |
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| The
Directors of your Company take pleasure in presenting the thirty-first annual
report and audited accounts |
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| for
the year ended June 30, 2000. |
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2000 |
1999 |
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|
(Rupees
'000) |
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| Profit
before taxation |
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|
710,484 |
349,221 |
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| Taxation |
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|
235,831 |
168,836 |
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|
------------------ |
------------------ |
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| Profit
after taxation |
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|
474,653 |
180,385 |
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| Un-appropriated
profit brought forward |
|
421 |
346 |
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|
------------------ |
------------------ |
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|
475,074 |
180,731 |
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| Appropriations: |
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| Interim
cash dividend @ Rs. 2.00 (1999: Nil) |
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| per
ordinary share of Rs. 10/- each |
|
47,516 |
-- |
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| Proposed
final cash dividend @ Rs. 8.00 (1999: Rs. 4.20) |
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| per
ordinary share of Rs. 10/- each |
|
190,063 |
90,712 |
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------------------ |
------------------ |
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|
237,579 |
90,712 |
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| Transfer
to reserve for proposed issue of bonus shares in ratio of |
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| one
share for every two shares (1999: one share for every ten shares) |
118,789 |
21,598 |
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| Transfer
to general reserve |
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|
118,000 |
68,000 |
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------------------ |
------------------ |
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474,368 |
180,310 |
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------------------ |
------------------ |
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| Un-appropriated
profit carried forward |
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706 |
421 |
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========== |
========== |
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| OPERATING
RESULTS |
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| Your
Company is pleased to report that it has continued to grow both in turnover
and profit during the year |
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| under
review, with sales turnover and profit after tax increasing by Rs. 657
million and Rs. 294 million |
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| respectively,
as compared to the prior year period. Net earnings per share rose to Rs.
19.98, from 7.59 last |
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| year.
The improved financial results reflect several factors, including changes in
brand mix, effective cost |
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| containment
programs, reduced wastage and a reduction in financial charges during the
period. During the |
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| year
under review, your Company's contribution to the national exchequer in the
shape of excise duties and |
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| sales
tax also rose to an all time high of Rs. 8.82 billion as compared to Rs. 8.67
billion in the previous |
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| year.
The component of excise duties and sales tax paid during the year was
equivalent to 60.40% of domestic |
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| sales
turnover for cigarettes. |
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|
| BOARD
OF DIRECTORS |
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| The
Directors, with a great sense of loss, regret to inform of the sad demise of
Mr. Hasanali H. Merchant, |
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| who
passed away on November 23, 1999. He was a Director on the Board for about
fifteen years. The Company |
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| is
grateful for his valuable contributions during his 15 years on the Board. May
ALLAH give him eternal peace |
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| and
his family strength to bear this irreparable loss. He will be missed by his
many colleagues and friends. |
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| The
Board welcomes Mr. Nazir Hussain as Director on the Board. He has been a
senior executive with the |
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| Company
for a very long period. |
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|
| LEAF
TOBACCO |
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| The
1999 tobacco crop was more than adequate to meet the requirements of the
industry and of the Company. |
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| Your
Company was able to procure the required quantity at competitive prices. |
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|
| FUTURE
OUTLOOK |
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| Pakistan's
economy continues to remain under pressure as it adjusts to new economic
challenges and realities. |
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| The
performance of the economy directly influences the performance of the
industrial sector. Your Company |
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| is
cognizant of its role in the national economy, and will continue to play an
important role as one of the |
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| major
contributors to the national exchequer. |
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| The
first year of the millennium has brought with it hopes and aspirations of
better prospects. Yet the coming |
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| years
are expected to be difficult, as increased competition and new challenges may
lead to eroding margins. |
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| The
Company will continue to use its best endeavours to further improve the
marketing programs and distribution |
|
| coverage
for the Company's brands, as well as enhance quality standards and cost
control measures in order |
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| to
remain competitive in the future. |
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|
| APPRECIATION |
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| The
success of any organization is largely a function of its human resource base.
Therefore, staff strength |
|
| and
morale continue to be a major focus. The Directors would like to recognize
and record their deep |
|
| appreciation
for the valuable support and commitment, displayed by all levels of
employees. Without the active |
|
| involvement
and dedication of the Company's staff, such progress would not have been
possible. |
|
|
| The
Board would like to thank the Company's shareholders, banks, financial
institutions and suppliers for |
|
| the
continued co-operation and support extended to the Company during the year
under review. |
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|
| PATTERN
OF SHAREHOLDING |
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| A
pattern of shareholding in the prescribed form appears at page 31. |
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| AUDITORS |
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| The
Auditors M/s. Ebrahim and Co., Chartered Accountants and M/s. A. F. Ferguson
& Co., Chartered |
|
| Accountants,
retire and offer themselves for re-appointment. |
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|
On behalf of Board of Directors |
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|
|
IQBALALI LAKHANI |
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| Karachi:
October 27, 2000 |
|
Chairman |
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|
|
| Auditors'
Report to the Members |
|
|
| We
have audited the annexed balance sheet of LAKSON TOBACCO COMPANY LIMITED as
at June 30, 2000 |
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| 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. |
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| It
is the responsibility of the company's management to establish and maintain a
system of internal control, |
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| and
prepare and present the above said statements in conformity with the approved
accounting standards and |
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| the
requirements of the Companies Ordinance, 1984. Our responsibility is to
express an opinion on these |
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| statements
based on our audit. |
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| We
conducted our audit in accordance with the auditing standards as applicable
in Pakistan. These standards |
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| 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
the 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 accounts have been kept by the company as
required by the Companies |
|
| Ordinance,
1984; |
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|
|
|
|
|
| (b)
in our opinion: |
|
|
|
|
| (i)
the balance sheet and profit and loss account together with 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
except for the change |
|
| as
explained in note 2.10 with which we concur; |
|
|
|
| (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 |
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| 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, 1984, 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, 2000 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 |
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| by
the company and deposited in the Central Zakat Fund established under section
7 of that Ordinance. |
|
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| Karachi |
|
A.F. FERGUSON & CO. |
|
EBRAHIM & CO. |
|
| Dated
· October 27, 2000 |
Chartered Accountants |
|
Chartered Accountants |
|
|
|
| Balance
Sheet as at June 30, 2000 |
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|
|
NOTE |
2000 |
1999 |
|
|
|
(Rupees
'000) |
|
|
| TANGIBLE
FIXED ASSETS |
|
| Operating
assets |
|
3 |
705,690 |
716,362 |
|
| Capital
work-in-progress |
|
4 |
192,282 |
48,353 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
897,972 |
764,715 |
|
|
|
|
|
| LONG
TERM INVESTMENT |
|
5 |
1 |
1 |
|
| LONG
TERM LOANS |
|
6 |
645 |
548 |
|
| LONG
TERM DEPOSITS AND PREPAYMENTS |
7 |
27,518 |
38,797 |
|
|
|
|
|
| CURRENT
ASSETS |
|
| Stores
and spares |
|
8 |
96,298 |
96,132 |
|
| Stock in trade |
|
9 |
1,203,076 |
956,760 |
|
| Trade debts |
|
10 |
129,924 |
76,485 |
|
| Loans
and advances |
|
11 |
10,907 |
23,199 |
|
| Deposits,
prepayments and other receivables |
12 |
75,877 |
39,741 |
|
| Cash
and bank balances |
|
13 |
53,454 |
272,650 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
1,569,536 |
1,464,967 |
|
|
| Less:
CURRENT LIABILITIES |
|
| Current
portion of liabilities against assets subject |
|
| to
finance leases |
|
20 |
74,425 |
99,361 |
|
| Short
term finances |
|
14 |
330,091 |
647,638 |
|
| Creditors,
accrued and other liabilities |
15 |
637,019 |
478,062 |
|
| Taxation |
|
|
164,308 |
40,981 |
|
| Dividends |
|
16 |
193,428 |
93,234 |
|
|
------------------ |
------------------ |
|
|
|
1,399,271 |
1,359,276 |
|
| NET
CURRENT ASSETS |
|
|
170,265 |
105,691 |
|
|
|
|
------------------ |
------------------ |
|
|
|
1,096,401 |
909,752 |
|
|
|
========== |
========== |
|
| Financed by: |
|
| SHARE
CAPITAL |
|
17 |
237,578 |
215,980 |
|
| RESERVES |
|
|
18 |
664,782 |
449.59 |
|
| UNAPPROPRIATED
PROFIT |
|
|
706 |
421 |
|
|
|
|
|
------------------ |
------------------ |
|
| SHAREHOLDERS'
EQUITY |
|
|
903,066 |
665,992 |
|
| SURPLUS
ON REVALUATION OF FIXED ASSETS |
19 |
51,092 |
51,092 |
|
| LIABILITIES
AGAINST ASSETS SUBJECT TO FINANCE LEASES |
20 |
68,543 |
142,966 |
|
| DEFERRED
TAXATION |
|
|
73,700 |
49,700 |
|
| CONTINGENCIES
AND COMMITMENTS |
21 |
|
|
|
|
|
------------------ |
------------------ |
|
|
|
|
1,096,401 |
909,752 |
|
|
|
========== |
========== |
|
|
|
|
| NOTE:
The annexed notes form an integral part of these accounts. |
|
|
|
|
IQBALALI LAKHANI |
|
TASLEEMUDDIN A. BATLAY |
|
|
| Karachi
: October 27, 2000 |
|
Chairman & Chief Executive |
|
Director |
|
|
|
|
| Profit
& Loss Account |
|
| for
the year ended June 30, 2000 |
|
|
|
|
|
NOTE |
2000 |
1999 |
|
|
|
(Rupees
'000) |
|
|
| Sales |
|
|
14,730,137 |
14,073,173 |
|
| Cost
of goods sold |
|
22 |
12,657,827 |
12,552,659 |
|
|
------------------ |
------------------ |
|
| Gross profit |
|
|
2,072,310 |
1,520,514 |
|
|
|
|
------------------ |
------------------ |
|
| Establishment
expenses |
|
23 |
178,783 |
156,608 |
|
| Selling
and distribution expenses |
|
24 |
1,001,313 |
804,756 |
|
|
------------------ |
------------------ |
|
|
|
|
1,180,096 |
961,364 |
|
|
|
|
------------------ |
------------------ |
|
| Operating profit |
|
|
892,214 |
559,150 |
|
| Other income |
|
25 |
15,410 |
13,645 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
907,624 |
572,795 |
|
|
------------------ |
------------------ |
|
| Financial
charges |
|
26 |
145,332 |
194,573 |
|
| Other charges |
|
27 |
51,808 |
29,001 |
|
|
|
|
------------------ |
------------------ |
|
|
|
|
197,140 |
223,574 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
before taxation |
|
|
710,484 |
349,221 |
|
| Taxation |
|
28 |
235,831 |
168,836 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
after taxation |
|
|
474,653 |
180,385 |
|
| Unappropriated
profit brought forward |
|
421 |
346 |
|
|
|
|
------------------ |
------------------ |
|
| Profit
available for appropriation |
|
|
475,074 |
180,731 |
|
|
| Appropriations: |
|
| - Interim at 20% (1999: Nil) |
|
47,516 |
-- |
|
| - Proposed final at 80%
(1999: at 42%) |
|
190,063 |
90,712 |
|
|
|
------------------ |
------------------ |
|
|
|
237,579 |
90,712 |
|
| Reserve
for proposed issue of bonus shares at 50% (1999: 10%) |
118,789 |
21,598 |
|
| Transfer
to general reserves |
|
118,000 |
68,000 |
|
|
------------------ |
------------------ |
|
|
|
474,368 |
180,310 |
|
|
|
------------------ |
------------------ |
|
| Unappropriated
profit carried forward |
|
706 |
421 |
|
|
|
========== |
========== |
|
|
|
|
|
|
|
|
Rupees |
|
|
|
|
|
|
|
| Earnings
per share |
|
29 |
19.98 |
7.59 |
|
|
|
|
|
========== |
========== |
|
|
|
|
|
|
|
| NOTE:
The annexed notes form an integral part of these accounts. |
|
|
|
|
IQBALALI LAKHANI |
|
TASLEEMUDDIN A. BATLAY |
|
| Karachi
· October 27, 2000 |
|
Chairman & Chief Executive |
|
Director |
|
|
|
| Cash
Flow Statement |
|
| for
the year ended June 30, 2000 |
|
|
|
|
|
|
|
NOTE |
2000 |
1999 |
|
|
|
(Rupees
'000) |
|
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
| Cash
generated from operations |
|
33 |
766,493 |
554,342 |
|
| Financial
charges paid |
|
|
(151,367) |
(189,386 |
|
| Taxes paid |
|
|
(88,504) |
(89,245 |
|
| Long term loans |
|
|
(97) |
99 |
|
| Long
term deposits and prepayments (net) |
|
11,279 |
3,341 |
|
|
|
|
------------------ |
------------------ |
|
| Net
cash inflow from operating activities |
|
537,804 |
279,151 |
|
