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Lakson Tobacco Company Limited
Annual Report 2001
CONTENTS
Company Information
Notice of Meeting
Directors' Report
Auditors' Report to the Members
Balance Sheet
Profit & Loss Account
Cash Flow Statement
Statement of Changes in Equity
Notes to the Accounts
Pattern of Holding of Shares
Subsidiary Company's Accounts
Premier Tobacco Company (Pvt) Limited
Financial Highlights
Company Information
BOARD OF DIRECTORS
IQBALALI LAKHANI (Chairman & Chief Executive)
AMIN MOHAMMED LAKHANI
E.A. NOMANI
TASLEEMUDDIN AHMED BATLAY
NAZIR HUSSAIN
AZIZ EBRAHIM
SHAHID AHMED KHAN
RAMZAN ALI HALANI
M.K. NAWAZ
MANSOOR AHMED
ADVISOR
SULTANALI LAKHANI
COMPANY SECRETARY
RAMZAN ALI HALANI
AUDITORS
A.F. FERGUSON & CO.
Chartered Accountants
EBRAHIM & CO.
Chartered Accountants
REGISTERED OFFICE
LAKSON SQUARE, BUILDING NO. 2
SARWAR SHAHEED ROAD
KARACHI-74200
FACTORIES
1. E/15, S.I.T.E., KOTRI
DISTT. DADU, (SlNDH)
2. PLOT NO. 20, SECTOR NO. 17
KORANGI INDUSTRIAL AREA, KARACHI
3. QUADIRABAD
DISTT.SAHIWAL
4. VILLAGE: MANDRA
TEH: GUJAR KHAN
DISTT. RAWALPINDI
5. ISMAILA
DISTT. SWABI
Notice of Meeting
NOTICE IS HEREBY GIVEN that the 32nd Annual General Meeting of Lakson Tobacco Company Limited will be held
on Thursday November 15, 2001 at 10.30 a.m. at Avari Renaissance Towers Hotel, Fatima Jinnah Road, Karachi to
transact the following business:
1. To receive, consider and adopt the audited Balance Sheet and 'Profit and Loss Account for the year ended June
30, 2001 together with the Directors' and Auditors' Reports thereon.
2. To declare final dividend @ 55% as recommended by the Board of Directors.
3. To consider to appoint auditors and fix their remuneration.
By Order of the Board
RAMZAN ALI HALANI
Karachi: October 05, 2001 Director/Company Secretary
NOTES:
1. The share transfer books of the Company will remain closed from November 03, 2001 to November 15, 2001,
both days inclusive. Transfers received in order at the Company's registered office situated at Lakson Square,
Building No. 2, Sarwar Shaheed Road, Karachi upto November 02, 2001 will be considered in time to be eligible
for payment of the final dividend to the transferees.
2. A member who has deposited his/her shares into Central Depository Company of Pakistan Limited, must bring
his/her participant's ID number and account/sub-account number alongwith original National Identity Card (NIC)
or original Passport at the time of attending the meeting.
3. A member entitled to attend and vote at the general meeting may appoint another member as his/her proxy to
attend, speak and vote instead of him/her.
4. If a proxy is granted by a member who has deposited his/her shares in Central Depository Company of Pakistan
Limited, the proxy must be accompanied with participant's ID number and account/sub-account number alongwith
attested photocopies of NIC or the Passport of the beneficial owner. Representatives of corporate members should
bring the usual documents required for such purpose.
5. Forms of proxy to be valid must be received at the Company's registered office not later than 48 hours before the
time of the meeting.
6. Members are requested to notify the Company promptly of any change in their addresses.
7. A form of proxy is enclosed herewith.
Directors' Report
The Directors of your Company take pleasure in presenting the thirty-second annual report and audited
accounts for the year ended June 30, 2001.
2001 2000
(Rupees '000)
Profit before taxation 604,914 710,484
Taxation 210,206 235,831
------------------ ------------------
Profit after taxation 394,708 474,653
Un-appropriated profit brought forward 706 421
------------------ ------------------
395,414 475,074
Appropriations:
Interim dividend @ Nil (2000: Rs. 2.00)
per ordinary share of Rs. 10/- each -- 47,516
Proposed final dividend @ Rs. 5.50 (2000: Rs. 8.00)
per ordinary share of Rs. 10/- each 196,002 190,063
------------------ ------------------
196,002 237,579
Transfer to reserve for proposed issue of bonus shares @ Nil
(2000: one share for every two shares) -- 118,789
Transfer to general reserve 199,000 118,000
------------------ ------------------
395,002 474,368
------------------ ------------------
Un-appropriated profit carried forward 412 706
========== ==========
OPERATING RESULTS
We are pleased to inform that your Company has continued to maintain sales growth during the year under
review. Sales turnover increased by Rs. 736 Million registering a 5% increase over results of the same period
of the preceding year. However due to continuous appreciation of the US Dollar against Pak Rupee, increased
cost of raw & packing material & no increase in selling prices of all our brands during the year, profit after
tax was down by Rs. 80 Million. Consequently Net Earnings Per Share were at Rs. 11.08 compared with
Rs. 13.32 in the preceding year. Establishment expenses registered an increase of 12.42% whereas Selling
and Distribution & Financial expenses have recorded a reduction of 9.08 % and 8.31% respectively, when
compared with the results of the previous year. During the year under review, your Company's contribution
to the national exchequer through excise duties and sales tax rose to Rs. 8.888 Billion as compared to
Rs. 8.823 Billion in the prior year. Excise duties and sales tax, paid during the year, were equivalent to
58% of domestic sales turnover for cigarettes.
LEAF TOBACCO
The 2000 tobacco crop was surplus to industry's requirements and the Company was able to procure tobaccos
at competitive prices.
FUTURE OUTLOOK
The management of your Company is committed to creating increased value for shareholders through
continuous efforts to further improve product quality and distribution coverage for the Company's brands.
Our efforts are also designed to pursue goals of both cost reduction, through increased productivity, and
growth in sales volume. The achievement of these goals will result in sustained competitive improvement
which will result in a better future for your Company. Your management is committed to working even harder
to combat emerging challenges and to cater to changing customer preferences within what is forecast to
be a continuing difficult business environment.
APPRECIATION
Your Company attaches great importance to the well being of its employees and considers them all to be
important members of the Lakson family. We will continue to invest in their professional development and
improved skills as we believe that by investing in our people, we invest in our future. We would like to express
our sincere appreciation to all staff and employees for the hard work and dedication they displayed during
the year under report. The excellent result achieved was only possible through their efforts.
We are also grateful to our suppliers, shareholders, banks & financial institutions for their continued support
and confidence in our enterprise and assure them that we remain committed in our resolve to ensure best
utilization of their investment in our Company's future growth.
PATTERN OF SHAREHOLDING
A pattern of shareholding in the prescribed form appears at page 31.
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated financial statements have not been prepared as the investment in the Company's subsidiary
namely Premier Tobacco Company (Pvt) Ltd. is not material.
AUDITORS
The Auditors M/s. A. F. Ferguson & Co., Chartered Accountants and M/s. Ebrahim & Co., Chartered
Accountants, retire and offer themselves for re-appointment.
On behalf of Board of Directors
IQBALALI LAKHANI
Karachi: September 24, 2001 Chairman
Auditors' Report to the Members
We have audited the annexed balance sheet of LAKSON TOBACCO COMPANY LIMITED as at June 30, 2001
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.
It is the responsibility of the Company's management to establish and maintain a system of internal control,
and prepare and present the above said statements in conformity with the approved accounting standards
and the requirements of the Companies Ordinance, 1984. Our responsibility is to express an opinion on these
statements based on our audit.
We conducted our audit in accordance with the auditing standards as applicable in Pakistan. These standards
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;
(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;
(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 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, 2001 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
by the Company and deposited in the Central Zakat Fund established under section 7 of that Ordinance.
Karachi A.F. FERGUSON & CO. EBRAHIM & CO.
Dated : September 24, 2001 Chartered Accountants Chartered Accountants
Balance Sheet as at June 30, 2001
NOTE 2001 2000
(Rupees '000)
TANGIBLE FIXED ASSETS
Operating assets 3 898,763 705,690
Capital work-in-progress 4 46,829 192,282
------------------ ------------------
945,592 897,972
LONG TERM INVESTMENT 5 1 1
LONG TERM LOANS 6 258 645
LONG TERM DEPOSITS AND PREPAYMENTS 7 42,169 27,518
CURRENT ASSETS
Stores and spares 8 102,260 96,298
Stock in trade 9 1,621,662 1,203,076
Trade debts 10 118,184 129,924
Loans and advances 11 11,200 10,907
Deposits, prepayments and other receivables 12 110,175 75,877
Cash and bank balances 13 19,423 53,454
------------------ ------------------
1,982,904 1,569,536
Less: CURRENT LIABILITIES
Current portion of liabilities against assets subject
to finance leases 20 69,553 74,425
Short term finances 14 396,279 330,091
Creditors, accrued and other liabilities 15 837,403 637,019
Taxation 40,745 164,308
Dividends 16 200,795 193,428
------------------ ------------------
1,544,775 1,399,271
------------------ ------------------
NET CURRENT ASSETS 438,129 170,265
------------------ ------------------
1,426,149 1,096,401
========== ==========
Represented by:
SHARE CAPITAL 17 356,367 237,578
RESERVES 18 744,993 664,782
UNAPPROPRIATED PROFIT 412 706
------------------ ------------------
SHAREHOLDERS' EQUITY 1,101,772 903,066
SURPLUS ON REVALUATION OF FIXED ASSETS 19 51,092 51,092
LIABILITIES AGAINST ASSETS SUBJECT TO FINANCE LEASES 20 185,585 68,543
DEFERRED TAXATION 87,700 73,700
------------------ ------------------
1,426,149 1,096,401
CONTINGENCIES AND COMMITMENTS 21 ========== ==========
NOTE: The annexed notes form an integral part of these accounts.
IQBALALI LAKHANI TASLEEMUDDIN A. BATLAY
Karachi: September 24, 2001 Chairman & Chief Executive Director
PROFIT & LOSS ACCOUNT
FOR THE YEAR ENDED JUNE 30, 2001
NOTE 2001 2000
(Rupees '000)
Sales 15,466,198 14,730,137
Cost of goods sold 22 13,584,619 12,657,827
------------------ ------------------
Gross profit 1,881,579 2,072,310
------------------ ------------------
Establishment expenses 23 200,994 178,783
Selling and distribution expenses 24 910,358 1,001,313
------------------ ------------------
1,111,352 1,180,096
------------------ ------------------
Operating profit 770,227 892,214
Other income 25 9,743 15,410
------------------ ------------------
779,970 907,624
------------------ ------------------
Financial charges 26 133,256 145,332
Other charges 27 41,800 51,808
------------------ ------------------
175,056 197,140
------------------ ------------------
Profit before taxation 604,914 710,484
Taxation 28 210,206 235,831
------------------ ------------------
Profit after taxation 394,708 474,653
Unappropriated profit brought forward 706 421
------------------ ------------------
Profit available for appropriation 395,414 475,074
Appropriations:
Proposed dividend
- Interim at Nil (2000: 20%) -- 47,516
- Final at 55% (2000: 80%) 196,002 190,063
------------------ ------------------
196,002 237,579
Reserve for proposed issue of bonus shares at Nil (2000: 50%) -- 118,789
Transfer to general reserves 199,000 118,000
------------------ ------------------
395,002 474,368
------------------ ------------------
Unappropriated profit carried forward 412 706
========== ==========
Rupees
Earnings per share 29 11.08 13.32
========== ==========
NOTE: The annexed notes form an integral part of these accounts.
IQBALALI LAKHANI TASLEEMUDDIN A. BATLAY
Karachi : September 24, 2001 Chairman & Chief Executive Director
CASH FLOW STATEMENT
FOR THE YEAR ENDED JUNE 30, 2001
NOTE 2001 2000
(Rupees '000)
CASH FLOW FROM OPERATING ACTIVITIES
Cash generated from operations 33 585,920 766,493
Financial charges paid (111,388) (151,367)
Taxes paid (319,769) (88,504)
Long term loans 387 (97)
Long term deposits and prepayments (net) (14,651) 11,279
------------------ ------------------
Net cash inflow from operating activities 140,499 537,804
CASH FLOW FROM INVESTING ACTIVITIES
Fixed capital expenditure (177,017) (218,358)
Proceeds from disposal of fixed assets 5,584 5,112
Income received from short term investments 7,180 10,539
------------------ ------------------
Net cash outflow from investing activities (164,253) (202,707)
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from sale and lease back of fixed assets 192,409 --
Repayment of liabilities against assets subject to finance leases (80,239) (99,361)
Dividends paid (188,635) (137,385)
------------------ ------------------
Net cash outflow from financing activities (76,465) (236,746)
------------------ ------------------
Net (decrease)/increase in cash and cash equivalents (100,219) 98,351
Cash and cash equivalents at beginning of the year (276,637) (374,988)
------------------ ------------------
Cash and cash equivalents at end of the year 34 (376,856) (276,637)
========== ==========
Note: The annexed notes form an integral part of these accounts.
IQBALALI LAKHANI TASLEEMUDDIN A. BATLAY
Karachi : September 24, 2001 Chairman & Chief Executive Director
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED JUNE 30, 2001
Issued, subs- Capital Revenue Unappro- Total
cribed and reserves reserves priated
paid-up capital profit
(Rupees '000)
Balance at July 1, 1999 215,980 21,598 427,993 421 665,992
Profit after taxation -- -- -- 474,653 474,653
Interim dividend -- -- -- (47,516) (47,516)
Final dividend -- -- -- (190,063) (190,063)
Issue of bonus shares 21,598 (21,598) -- -- --
Transfer to reserves -- 118,789 118,000 (236,789) --
------------------ ------------------ ------------------ ------------------ ------------------
Balance at June 30, 2000 237,578 118,789 545,993 706 903,066
Profit after taxation -- -- -- 394,708 394,708
Dividends -- -- -- (196,002) (196,002)
Issue of bonus shares 118,789 (118,789) -- -- --
Transfer to reserves -- -- 199,000 (199,000) --
------------------ ------------------ ------------------ ------------------ ------------------
Balance at June 30, 2001 356,367 -- 744,993 412 1,101,772
========== ========== ========== ========== ==========
IQBALALI LAKHANI TASLEEMUDDIN A. BATLAY
Karachi: September 24, 2001 Chairman & Chief Executive Director
NOTES TO THE ACCOUNT
FOR THE YEAR ENDED JUNE 30, 2001
1. THE COMPANY AND ITS OPERATIONS
The Company was incorporated in Pakistan on February 10, 1969 as a public limited company and its shares
are quoted on the Karachi and Lahore stock exchanges. The principal activity of the Company is the manufacture
and sale of cigarettes and tobacco.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
2.1 Basis of preparation
These accounts have been prepared in accordance with the requirements of the Companies Ordinance,
1984 and the International Accounting Standards, as applicable in Pakistan.
2.2 Accounting convention
These accounts have been prepared under the historical cost convention except to the extent that certain
operating assets have been included at revalued amounts.
2.3 Tangible fixed assets
These are stated at cost or revaluation less accumulated depreciation except freehold land and capital work
in progress which are stated at revalued amount and historical cost respectively.
Depreciation on operating assets except for data processing equipment and leasehold land is charged using
revalued/historical cost applying the reducing balance method at the rates specified in note 3.1. Depreciation
on data processing equipment is calculated using the straight-line method based on estimated useful lives.
Depreciable cost for operating assets is determined without taking into account any residual values.
The cost of leasehold land acquired in April, 1983 on lease of twenty five years is being amortized over
the lease period in equal installments.
Full year's depreciation is charged on additions during the year, whereas no depreciation is charged on
the assets disposed of / or retired during the year.
Maintenance and normal repairs are charged to income as and when incurred while major improvements,
if any, are capitalised.
Gains and losses on disposal of assets are included in the profit and loss account.
2.4 Accounting for leases
The Company accounts for plant and machinery and equipment acquired under financial leases by recording
the assets and related liability.
The amounts are determined on the basis of discounted value of total minimum lease payments and residual
value of the assets at the end of the lease period to be paid by the Company.
Financial charges are allocated to accounting periods in a manner so as to provide a constant periodic
rate of charge on the outstanding liability.
Depreciation is charged at rates used for similar assets, so as to depreciate the assets over their estimated
useful lives in view of certainty of ownership of the assets at the end of the lease term.
Income arising from sale and lease back transactions, if any, is deferred and is amortised equally over
the lease period.
Lease rentals payable on assets held under operating leases are charged to income in arriving at operating
profits.
2.5 Stores and spares
These are valued at moving average cost except for items in transit which are stated at invoice values
plus other charges paid thereon.
2.6 Stock in trade
These are stated at the lower of average cost and net realisable value.
Average cost of raw material includes procurement expenses except raw material in bonded warehouse
and in transit which are stated at invoice values plus other charges paid thereon.
Average cost of redried tobacco includes procurement expenses and proportionate overheads incurred on
redrying of tobacco leaf.
Average cost in relation to finished goods and work-in-process includes proportionate production overheads.
Net realisable value represents estimated selling prices in the ordinary course of business less costs
necessarily to be incurred to make the sale.
2.7 Foreign currency translation
Assets and liabilities in foreign currencies are translated into rupees at exchange rates approximating
those prevailing at the balance sheet date except for liabilities covered under forward exchange contracts
which are translated at the contracted rates. Exchange differences are taken to profit and loss account.
2.8 Taxation
Provision for current taxation is the higher of the amount computed on taxable income at the current tax
rates, and minimum tax computed at the prescribed rate on sales net of sales tax and excise duty.
The Company accounts for deferred taxation on all material timing differences using the liability method.
However, deferred tax is not provided if it can be established with reasonable probability that these timing
differences will not reverse in the foreseeable future.
2.9 Staff retirement benefits
The Company operates a provident fund scheme effective from October 1, 1975. Accordingly, gratuity is
not obligatory on the Company. Gratuity payable to staff employed prior to introduction of provident fund
scheme is accounted for as and when paid and no provision is made for gratuity liability to such continuing
staff as the amounts are not material.
2.10 Compensated absences
These employee benefits are accounted for in the period in which the absences are earned.
2.11 Revenue recognition
Sales are recorded on despatch of goods to customers. Royalty income is accounted for as and when earned
and interest income is accounted for on accrual basis.
3. OPERATING ASSETS
3.1 The following is a statement of operating assets:
Cost/ Additions/ Transfers Cost/ Accumulated Depreciation Depreciation Accumulated Book value Depreciation
revaluation (disposals) revaluation depreciation charge for on depreciation as at June rates
Assets category as at as at as at the year/(on transfers as at 30, 2001
July 1, 2000 June 30, 2001 July 1, 2000 deletions) June 30, 2001
(Rupees '000)
Company owned
Freehold land 13,200 -- -- 13,200 -- -- -- -- 13,200 --
Leasehold land 157 -- -- 157 106 6 -- 112 45 25 years
Buildings on freehold [and 249,124 5,968 -- 255,092 96,693 14,111 -- 110,804 144,288 5-10%
Buildings on leasehold land 549 -- -- 549 235 16 -- 251 298 5-10%
Plant and machinery 468,768 74,012 84,942 623,654 238,641 50,657 29,029 317,224 306,430 10-15%
(4,068) (1,103)
Power and other installations 83,536 27,916 28,924 140,376 31,896 10,384 5,409 47,689 92,687 10-15%
Furniture, fixtures and equipment 49,273 8,245 -- 57,518 20,299 4,390 -- 24,689 32,829 10-15%
Data processing equipment 38,734 5,048 -- 43,782 22,624 9,736 -- 32,360 11,422 33.33%
Vehicles 22,892 8,872 2,400 33,259 13,466 3,772 1,517 18,173 15,086 20%
(905) (582)
------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------
926,233 130,061 116,266 1,167,587 423,960 93,072 35,955 551,302 616,285
(4,973) (1,685)
Leased
Plant and machinery 276,041 190,859 (113,866) 353,034 77,931 30,954 (34,438) 74,447 278,587 10%
Transportation equipment 4,940 1,550 (2,400) 4,090 2,592 603 (1,517) 1,678 2,412 20%
Data processing equipment 6,090 -- -- 6,090 3,131 1,480 -- 4,611 1,479 33.33%
------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------
287,071 192,409 (116,266) 363,214 83,654 33,037 (35,955) 80,736 282,478
------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------
2001 1,213,304 322,470 -- 1,530,801 507,614 126,109 -- 632,038 898,763
(4,973) (1,685)
========== ========== ========== ========== ========== ========== ========== ========== ==========
2000 1,141,193 74,429 -- 1,213,304 424,831 84,414 -- 507,614 705,690
(2,318) (1,631)
========== ========== ========== ========== ========== ========== ========== ========== ==========
3.2 The depreciation charge for the year has been allocated as follows:
NOTE 2001 2000
(Rupees '000)
Purchases, redrying and related expenses 22.1 34,207 25,287
Manufacturing expenses 22.2 70,445 41,645
Establishment expenses 23 15,262 13,614
Selling and distribution expenses 24 6,195 3,868
------------------ ------------------
126,109 84,414
========== ==========
3.3 The Company revalued its land, buildings and certain items of plant and machinery in 1978, 1980 and
1984.These revaluations resulted in net surplus of Rs. 17.0 million, Rs. 16.0 million and Rs. 30.0 million
respectively. Revalued assets having revaluation surplus of Rs. 11.9 million have been sold todate. The
remaining balance of revaluation surplus amounting to Rs. 51.1 million is included in the carrying value
of the respective assets with a corresponding amount appearing as "Surplus on revaluation of fixed
assets". Element of this revaluation increment included in the book value of these assets as stated in Note
3.1 amounted to Rs. 18.2 million (2000: Rs. 18.9 million).
3.4 During the year, the management has transferred and put into operation the idle assets of its inoperative
factories at Kotri, Mardan and Jehangira to its various operating factories. Accordingly, depreciation
remaining uncharged from the date of their being idle to date aggregating to Rs. 14.755 million has been
accounted for in the current year's profit and loss account.
3.5 The following fixed assets were disposed of during the year:
(Rupees '000)
Original Accumulated Written down Disposal Mode of Particulars of buyers
Particulars cost depreciation value proceeds disposal
Plant and machinery 3,500 650 2,850 3,500 Tender Civic Enterprise Karachi
554 440 114 545 Tender Automation Aid Karachi
14 13 1 30 Tender Steel Arts Rawalpindi
------------------ ------------------ ------------------ ------------------
4,068 1,103 2,965 4,075
Vehicles 90 18 72 258 Insurance claim Century Insurance Co. Ltd. Karachi
181 164 17 101 Tender Mr. M. Nazir Karachi
18 10 8 316 Tender Mr. M. Hussain Karachi
45 21 24 239 Tender Mr. Naeem Karachi
10 5 5 136 Tender Mr. S. Malook Karachi
36 13 23 279 Tender Mr. Salman-ul-Haq Karachi
56 38 18 18 Through car scheme Mr. Gul Muhammad (Employee) Karachi
50 34 16 16 Through car scheme Mr. Yousuf Rehmatullah (Employee) Karachi
56 37 18 18 Through car scheme Mr. A. Razak Aba Umer (Employee) Karachi
50 34 16 16 Through car scheme Mr. Noor Muhammad A. Latif (Employee) Karachi
56 38 18 18 Through car scheme Mr. Asghar Ali (Employee) Karachi
56 38 18 18 Through car scheme Mr. Salman Yousuf (Employee) Karachi
56 38 18 18 Through car scheme Mr. Farooq Ibrahim (Employee) Karachi
58 30 28 28 Through car scheme Mr. Saeed Baig (Employee) Karachi
47 32 15 15 Through car scheme Mr. Mazhar Ali (Employee) Karachi
41 32 9 15 Through car scheme Mr. M. Iqbal (Employee) Karachi
------------------ ------------------ ------------------ ------------------
905 582 323 1,509
------------------ ------------------ ------------------ ------------------
4,973 1,685 3,288 5,584
========== ========== ========== ==========
NOTE 2001 2000
(Rupees '000)
4. CAPITAL WORK IN PROGRESS
Civil works 11,011 3,229
Plant and machinery 4.1 33,041 163,174
Power and other installations 2,688 21,393
Furniture, fixtures and equipment 89 4,486
------------------ ------------------
46,829 192,282
========== ==========
4.1 This includes machine in transit amounting to Rs. Nil (2000: Rs. 0.3 million)
5. LONG TERM INVESTMENT
This represents the cost of 103 (2000: 103) fully paid ordinary shares of Rs. 10 each in Premier Tobacco Company
(Private) Limited, a wholly owned subsidiary of the Company. The value of the Company's investment on the basis
of net assets of the subsidiary as disclosed in its audited accounts for the year ended June 30, 2001 amounted
to Rs. 10 (2000: Rs. 10) per share.
6. LONG TERM LOANS
Secured and considered good
Loans to executives 6.1 465 990
Less: Current portion shown under current assets 11 (207) (345)
------------------ ------------------
258 645
========== ==========
6.1 These are interest free loans for purchase of vehicles repayable in five years in equal monthly installments
and are secured by pledge of original registration documents of vehicle and demand promissory note.
The maximum amount of loans due from the executives at the end of any month during the year was Rs. 0.9
million (2000: Rs. 1.1 million).
7. LONG TERM DEPOSITS AND PREPAYMENTS
Security deposits 41,713 26,993
Prepayments 456 525
------------------ ------------------
42,169 27,518
========== ==========
8. STORES AND SPARES
Stores 6,557 2,280
Spares/including in transit Rs. 1.3 million; 2000 Rs. 1.0 million) 95,703 94,018
------------------ ------------------
102,260 96,298
========== ==========
9. STOCK IN TRADE
Raw and packing materials (including in transit
Rs. 191.7 million; 2000: Rs. 105.7 million) 1,461,588 1,081,986
Work in process 19,415 17,575
Finished goods 140,659 103,515
------------------ ------------------
1,621,662 1,203,076
========== ==========
9.1 Stock in trade amounting to Rs. 34.4 million (2000: Rs. 30.3 million) were held by Delta Tobacco Company
(Private) Limited, Paramount Tobacco Company (Private) Limited and Ambar Tobacco Company (Private)
Limited who manufacture cigarettes for the Company under toll manufacturing agreements.
10. TRADE DEBTS
Considered good
Secured 36,874 25,164
Unsecured 81,310 104,760
------------------ ------------------
118,184 129,924
========== ==========
11. LOANS AND ADVANCES
Considered good
Secured
Loans to executives 6 207 345
Unsecured
Advances
Executives 11.1 8,733 8,181
Employees 143 62
------------------ ------------------
8,876 8,243
Suppliers and contractors 2,117 2,319
------------------ ------------------
10,993 10,562
------------------ ------------------
11,200 10,907
========== ==========
11.1 The maximum aggregate balance of advances due from executives at the end of any month during the year
was Rs. 10.4 million (2000: Rs. 9.3 million).
12. DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES
Considered good
Security deposits 8,233 15,198
Prepayments 71,557 27,312
Current account balances with statutory authorities 6,197 4,082
Sales tax refundable 19,872 21,481
Interest / profit receivable 681 1,849
Others 12.1 3,635 5,955
------------------ ------------------
110,175 75,877
========== ==========
12.1 This includes an amount of Rs. 1.6 million (2000: Rs. 1.6 million) due from associated companies. The
maximum balance due from associated companies at the end of any month during the year was Rs. 2.2 million
(2000: Rs. 8.6 million).
13. CASH AND BANK BALANCES
With banks
In saving accounts 3,424 10,077
In current accounts 13.1 14,883 42,198
------------------ ------------------
18,307 52,275
Cash in hand 1,116 1,179
------------------ ------------------
19,423 53,454
========== ==========
13.1 This includes foreign currency account balances amounting to Rs. 0.1 million (2000: Rs. 0.1 million).
14. SHORT TERM FINANCES
Secured
Banking companies
Running finance utilised under mark-up arrangements 14.1 356,279 330,091
Export refinance 14.2 40,000 --
------------------ ------------------
396,279 330,091
========== ==========
14.1 The facilities for running finance utilised under mark-up arrangements available from various banks
amounted to Rs. 2,863.5 million (2000: Rs. 2,789.0 million) and carry mark-up at rates ranging from 34 paisas
per rupee thousand per diem to 49 paisas per rupee thousand per diem. The purchase prices are payable
on various dates by June 30, 2002. These finances are secured against joint hypothecation of tobacco, other
raw materials, finished goods and personal guarantees of Directors.
14.2 Export refinance has been obtained under State Bank of Pakistan Export Refinance Scheme. This finance
carries mark-up charges at 8% per annum and is secured against joint registered pari passu hypothecation
of the Company's stocks. Sanctioned limit is Rs. 76.5 million (2000: Rs. 111.0 million).
15. CREDITORS, ACCRUED AND OTHER LIABILITIES
Creditors
Associated companies 5,903 7,500
Others 213,984 163,378
------------------ ------------------
219,887 170,878
Bills payable 50,794 52,388
Royalty payable to an associated company 17,474 15,513
Accrued expenses 154,468 152,526
Mark-up accrued on secured finances 18,073 4,352
Security deposits 15.1 2,924 2,946
Contractors' retention money 3,723 3,316
Advances from customers 12,978 14,152
Provision for tobacco development cess 15.2 & 15.4 139,500 60,407
Provision for tobacco excise duty 15.3 & 15.4 131,561 --
Tobacco cess payable 3,093 2,755
Sales tax payable 34,142 93,806
Workers' profit participation fund 15.5 32,453 38,156
Workers' welfare fund 11,535 22,445
Provident fund trust 2,344 230
Others 2,454 3,149
------------------ ------------------
837,403 637,019
========== ==========
15.1 This amount represents local distributors' security deposits which are repayable on cessation of distributorship
and carries interest at 2 Percent per annum.
15.2 With effect from July 01, 1999, the Tobacco Development Cess has been levied on the purchases of tobacco
leaf. The Company has filed a constitutional petition in the Supreme Court against this levy. A stay order
has been granted by the court in this respect and the Company is making a quarterly payment of Rs. 2.5
million under protest. Pending outcome of the matter, the Company has made the above provision.
15.3 The Collectorate of Sales Tax and Central Excise (Adjudication) has issued show cause notices on various
dates alleging short payment of tobacco excise duty. Stay orders have been granted by the relevant High
Court in this respect. Pending outcome of the matter, the Company has made the above provision.
Provision for
Tobacco Tobacco
development excise
cess duty
NOTE (Rupees '000)
15.4 Movement of provision
Balance as at July 1, 2000 60,407 --
Provision for the year 89,093 131,561
------------------ ------------------
149,500 131,561
Less: Payments made during the year 10,000 --
------------------ ------------------
139,500 131,561
========== ==========
NOTE 2001 2000
(Rupees '000)
15.6 Workers' profit participation fund
Balance as on July 1 38,156 18,870
Interest on funds utilised in the Company's business 3,184 1,938
------------------ ------------------
41,340 20,808
Less: Paid to the fund 41,340 20,808
------------------ ------------------
-- --
Allocation for the year 27 32,453 38,156
------------------ ------------------
32,453 38,156
========== ==========
16. DIVIDENDS
Unclaimed 4,793 3,365
Proposed - Final 196,002 190,063
------------------ ------------------
200,795 193,428
========== ==========
17. SHARE CAPITAL
Authorised capital
45,000,000 (2000: 30,000,000) ordinary shares of Rs. 10 each 450,000 300,000
========== ==========
Issued, subscribed and paid-up capital
Fully paid ordinary shares of Rs. 10/- each:
2001 2000
Number of shares
5,541,429 5,541,429 issued for cash 55,414 55,414
21,779,343 9,900,419 issued as bonus shares 217,793 99,004
issued for consideration
8,316,000 8,316,000 other than cash 83,160 83,160
------------------ ------------------ ------------------ ------------------
35,636,772 23,757,848 356,367 237,578
========== ========== ========== ==========
18. RESERVES
Capital reserve for issue of bonus shares
Balance as on July 1 118,789 21,598
Transferred from profit and loss account -- 118,789
------------------ ------------------
118,789 140,387
Less: Utilised for issue of bonus shares (118,789) (21,598)
------------------ ------------------
-- 118,789
Revenue reserves - General
Balance as at July 1 545,993 427,993
Transferred from profit and loss account 199,000 118,000
------------------ ------------------
744,993 545,993
------------------ ------------------
744,993 664,782
========== ==========
19. SURPLUS ON REVALUATION OF FIXED ASSETS
This represents net surplus on revaluation of Company's land, buildings and certain items of plant and machinery
carried out during 1978, 1980 and 1984.
20. LIABILITIES AGAINST ASSETS SUBJECT TO FINANCE LEASES
Secured
Balance as on July 1 142,968 242,329
Additions during the year 192,409 --
------------------ ------------------
335,377 242,329
Payments during the year (80,239) (99,361)
------------------ ------------------
255,138 142,968
Less: Current portion shown under current liabilities (69,553) (74,425)
------------------ ------------------
185,585 68,543
========== ==========
The above liabilities represent the unpaid balance of the total of minimum lease payments and the residual value
payable at the end of lease, discounted at rates ranging between 15% to 22% per annum.
Remaining aggregate rentals of Rs. 329.7 million inclusive of mark-up of Rs. 74.6 million are payable in equal
monthly and quarterly installments under various lease agreements as shown below:
Year (Rupees '000)
2001 - 2002 101,993
2002 - 2003 84,166
2003 - 2004 77,717
2004 - 2005 30,673
2005 - 2006 35,133
------------------
329,682
==========
The Company intends to exercise its option to purchase these assets upon termination of the lease term.
The cost of operating and maintaining the leased assets is borne by the Company.
The above liability is secured against personal guarantees of directors, demand promissory notes and bills of
exchange.
21. CONTINGENCIES AND COMMITMENTS
21.1 Contingencies
a) The Deputy Collector, Central Excise and Sales Tax has raised a demand for alleged short payment of
sales tax on cigarettes manufactured by toll manufacturers amounting to Rs. 72.0 million. The Company
has filed appeal against the order passed and has obtained stay against recovery from the Honorable
High Court of Sindh. Pending outcome of the case and because management is confident that the above
demand will be withdrawn, no provision has been made in these accounts for the aforesaid amount.
b) The Collectorate of Sales Tax and Central Excise (Adjudication) has issued show cause notice alleging
shod payment of tobacco excise duty amounting to. Rs. 11.1 million from one of the Company's factories
in respect of a particular crop during the period March 1998 to August 1999. The Company has maintained
that the excise duty was paid at the rate applicable during the above period and that no violations of
relevant regulations have been made. The management is confident that the matter will be resolved in
favour of the Company and accordingly no provision has been made in this respect.
c) Guarantees
There is contingent liability in respect of indemnities given to banks and insurance companies for
guarantees issued by them in the normal course of business aggregating to Rs. 72.2 million (2000:
Rs. 21.8 million).
2001 2000
(Rupees '000)
21.2 Commitments
a) Capital expenditure contracted for but not incurred 81,571 149,666
========== ==========
b) Rentals under operating lease agreements in respect of vehicles amounting to Rs. 68,439 thousand
(2000: Rs. 85,082 thousand) are payable over the next five years as under:
Year (Rupees '000)
2001 - 2002 26,422
2002 - 2003 24,399
2003 - 2004 14,427
2004 - 2005 2,911
2005 - 2006 280
------------------
68,439
==========
NOTE 2001 2000
(Rupees '000)
22. COST OF GOODS SOLD
Raw material consumed
Opening stock 1,081,986 810,690
Purchases, redrying and related expenses 22.1 4,656,054 3,693,919
------------------ ------------------
5,738,040 4,504,609
Closing stock (1,461,588) (1,081,986)
------------------ ------------------
4,276,452 3,422,623
Excise duties and other levies 8,888,422 8,823,327
Manufacturing expenses 22.2 465,463 392,702
------------------ ------------------
3,630,337 12,638,652
Work in process
Opening stock 17,575 11,680
Closing stock (19,415) (17,575)
Sale of waste (6,734) (6,905)
------------------ ------------------
(26,149) (24,480)
------------------ ------------------
(8,574) (12,800)
------------------ ------------------
Cost of goods manufactured 3,621,763 12,625,852
Finished goods
Opening stock 103,515 134,390
Purchases -- 1,100
------------------ ------------------
103,515 135,490
Closing stock (140,659) (103,515)
------------------ ------------------
(37,144) 31,975
------------------ ------------------
13,584,619 12,657,827
========== ==========
22.1 Purchases, redrying and related expenses
Raw and packing material 4,407,188 3,493,446
Salaries, wages and other benefits 22.1.1 87,351 74,306
Stores and spares consumed 15,870 12,884
Fuel and power 54,621 41,252
Rent, rates and taxes 48 67
Freight and stacking 41,229 32,946
Printing and stationery 516 578
Depreciation 3.2 34,207 25,287
Other expenses 15,024 13,153
------------------ ------------------
248,866 200,473
------------------ ------------------
4,656,054 3,693,919
========== ==========
22.1.1 This includes employees' retirement benefits amounting to Rs. 1.6 million (2000: Rs. 1.4 million).
22.2 Manufacturing expenses
Salaries, wages and other benefits 22.2.1 168,268 150,449
Cigarette manufacturing charges paid to third parties 45,380 22,196
Stores and spares consumed 56,203 72,208
Fuel and power 78,293 66,327
Insurance 2,848 3,021
Cartage 44,026 36,856
Depreciation 3.2 70,445 41,645
------------------ ------------------
465,463 392,702
========== ==========
22.2.1 This includes employees' retirement benefits amounting to Rs. 4.4 million (2000: Rs. 3.8 million).
23. ESTABLISHMENT EXPENSES
Salaries, allowances and other benefits 23.1 82,248 69,458
Rent, rates and taxes 24,395 20,293
Rentals of leased assets 8,952 9,674
Travelling, conveyance and cartage 12,712 12,718
Repairs and maintenance 1,532 2,748
Legal and professional charges 6,676 4,384
Vehicle running expenses 19,502 18,082
Postage, telephone and telegram 7,906 7,688
Printing and stationery 5,643 5,110
Utilities 6,852 6,201
Fees and subscription 1,739 1,144
Entertainment 2,469 2,461
Insurance 35 111
Depreciation 3.2 15,262 13,614
Security services charges 2,689 2,611
Other expenses 2,382 2,486
------------------ ------------------
200,994 178,783
========== ==========
23.1 This includes employees' retirement benefits amounting to Rs. 2.8 million (2000: Rs. 2.4 million).
24. SELLING AND DISTRIBUTION EXPENSES
Salaries, wages and other benefits 24.1 76,248 67,428
Travelling expenses 27,911 28,427
Marketing expenses 650,247 751,657
Vehicle running expenses 48,892 43,804
Freight and octroi expenses 54,331 58,074
Rent, rates and taxes 7,361 6,229
Rental of leased assets 21,610 23,493
Insurance 180 561
Postage, telephone and telegram 8,908 8,549
Depreciation 3.2 6,195 3,888
Royalty 1,961 3,442
Other expenses 6,516 5,781
------------------ ------------------
910,358 1,001,313
========== ==========
24.1 This includes employees' retirement benefits amounting to Rs. 2.1 million (2000: Rs. 1.8 million).
25. OTHER INCOME
Profit on disposal of fixed assets 2,296 4,425
Interest/profit on short term investments 6,012 9,690
Royalty income 818 809
Others 617 486
------------------ ------------------
9,743 15,410
========== ==========
26. FINANCIAL CHARGES
Mark-up/interest on:
Liabilities against assets subject to finance leases 19,360 31,750
Syndicate finance -- 40,900
Short term running finances 102,017 63,941
Export refinance 3,682 3,686
Workers' profit participation fund 15.5 3,184 1,938
Security deposits 50 47
Bank commission and other charges 4,963 3,070
------------------ ------------------
133,256 145,332
========== ==========
27. OTHER CHARGES
Workers' profit participation fund 15.5 32,453 38,156
Workers' welfare fund 8,649 12,507
Auditors' remuneration 27.1 300 300
Donations 27.2 398 845
------------------ ------------------
41,800 51,808
========== ==========
27.1 Auditors' remuneration
Ebrahim & A.F. Ferguson
Co. & Co.
Audit fee 150 150 300 300
========== ========== ========== ==========
27.2 No donation was given to any person or institution in which a director or his spouse was interested.
28. TAXATION
Current - for the year 189,600 228,900
- for the prior years (net) 6,606 (17,069)
Deferred 14,000 24,000
------------------ ------------------
210,206 235,831
========== ==========
29. EARNINGS PER SHARE
Profit for the year after taxation 394,708 474,653
========== ==========
Number of shares
Average issued ordinary shares 35,636,772 35,636,772
========== ==========
Rupees
Earnings per share 11.08 13.32
========== ==========
30. REMUNERATION OF CHIEF EXECUTIVE, DIRECTORS AND EXECUTIVES
Chief Executive Directors Chief Executive Directors
2001 2000 2001 2000 2001 2000 2001 2000
(Rupees '000)
Remuneration 3,000 1,377 1,424 1,200 56,068 42,224 60,492 44,801
House rent -- 368 492 414 20,732 16,561 21,224 17,343
Bonus -- -- 235 198 8,280 6,256 8,515 6,454
Provident fund -- -- 127 107 4,425 3,408 4,552 3,515
Motor vehicle expenses 338 333 100 91 5,215 4,418 5,653 4,842
Utilities 358 372 141 118 2,375 1,701 2,874 2,191
------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------
3,696 2,450 2,519 2,128 97,095 74,568 103,310 79,146
========== ========== ========== ========== ========== ========== ========== ==========
Number of persons 1 1 2 2 275 216 278 219
========== ========== ========== ========== ========== ========== ========== ==========
In addition, the chief executive, directors and some executives are provided with free use of the Company
maintained cars.
2001 2000
(Rupees '000)
31. TRANSACTIONS WITH ASSOCIATED UNDERTAKINGS
Sale of goods and services 2,143 9,367
Purchase of goods and services 313,704 239,554
Royalty charges 1,961 3,442
Rent and allied expenses 12,443 11,464
31.1 Sales and purchase transactions with associated undertakings are carried out on commercial terms and
conditions. Services, royalty charges and rent and allied expenses are charged between associated
undertakings on the basis of mutually agreed terms.
2001 2000
Number of cigarettes
in million
32. CAPACITY AND PRODUCTION
Installed capacity 34,740 33,750
========== ==========
Actual production
Company 28,673 25,021
Contracted 2,116 1,116
------------------ ------------------
30,789 26,137
========== ==========
Number of shifts per day Two and a Two and a
half shifts half shifts
Actual production was sufficient to meet the demand.
NOTE 2001 2000
(Rupees '000)
33. CASH GENERATED FROM OPERATIONS
Profit before taxation 604,914 710,484
Adjustments for non cash charges and other items:
Depreciation 126,109 84,414
Profit on disposal of fixed assets (2,296) (4,425)
Income from short term investments (6,012) (9,690)
Financial charges 125,109 140,324
Working capital changes 33.1 (261,904) (154,614)
------------------ ------------------
585,920 766,493
========== ==========
33.1 Working capital changes
(Increase)/decrease in current assets
Stores and spares (5,962) (166)
Stock in trade (418,586) (246,316)
Trade debts 11,740 (53,439)
Loans and advances (293) 12,292
Deposits, prepayments and other receivables (35,466) (36,985)
------------------ ------------------
(448,567) (324,614)
Increase in current liabilities
Creditors, accrued and other liabilities 186,663 170,000
------------------ ------------------
(261,904) (154,614)
========== ==========
34. CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise of the following items as included in the balance sheet:
Cash and bank balances 19,423 53,454
Short term finances (396,279) (330,091)
------------------ ------------------
(376,856) (276,637)
========== ==========
35. FINANCIAL ASSETS AND LIABILITIES
Financial assets
Interest/mark-up bearing Non-interest bearing Total
Maturity Maturity sub-total Maturity Maturity sub total
upto one after one upto one after one
year year year year
(Rupees '000)
Loans to executives -- -- -- 207 258 465 465
Long term deposits -- -- -- -- 41,713 41,713 41,713
Trade debts -- -- -- 118,184 -- 118,184 118,184
Deposits and other receivables -- -- -- 12,549 -- 12,549 12,549
Cash and bank balances 3,424 -- 3,424 15,999 -- 15,999 19,423
------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------
3,424 -- 3,424 146,939 41,971 188,910 192,334
========== ========== ========== ========== ========== ========== ==========
Financial liabilities
Liabilities against assets subject
to finance leases 69,553 185,585 255,138 -- -- -- 255,138
Short term finances 396,279 -- 396,279 -- -- -- 396,279
Creditors, accrued and
other liabilities 2,924 -- 2,924 469,217 -- 469,217 472,141
Dividends -- -- -- 200,795 -- 200,795 200,795
------------------ ------------------ ------------------ ------------------ ------------------ ------------------ ------------------
468,756 185,585 654,341 670,012 -- 670,012 1,324,353
========== ========== ========== ========== ========== ========== ==========
35.1 Concentration of credit risk
Credit risk represents the accounting loss that would be recognised at the reporting date if counter parties
fail completely to perform as contracted. Out of the total financial assets of Rs. 1 92 million, the financial
assets which are subject to credit risk are Rs.154 million. The Company believes that it is not exposed
to major concentration of credit risk.
35.2 Fair value of financial assets and liabilities
The carrying value of financial assets and liabilities are estimated to approximate their fair values.
36. NUMBER OF EMPLOYEES
Total number of employees as at June 30, 2001 was 2,522 (2000: 2,641)
37. CORRESPONDING FIGURES
Corresponding figures have been rearranged and reclassified, where necessary, for the purpose of comparison.
IQBALALI LAKHANI TASLEEMUDDIN A. BATLAY
Karachi: September 24, 2001 Chairman & Chief Executive Director
PATTERN OF HOLDING OF SHARES
HELD BY THE SHAREHOLDERS OF LAKSON TOBACCO COMPANY LTD.
AS AT JUNE 30, 2001
No. of Shareholding Total
Shareholders from to Shares held
900 1 100 Shares 24,203
630 101 500 Shares 161,470
266 501 1,000 Shares 193,495
261 1,001 5,000 Shares 543,604
43 5,001 10,000 Shares 289,863
14 10,001 15,000 Shares 170,550
5 15,001 20,000 Shares 88,309
1 20,001 25,000 Shares 21,988
2 25,001 30,000 Shares 52,055
1 30,001 35,000 Shares 34,317
2 35,001 40,000 Shares 76,718
1 40,001 45,000 Shares 43,732
1 45,001 50,000 Shares 45,240
1 50,001 55,000 Shares 52,810
1 70,001 75,000 Shares 74,344
1 75,001 80,000 Shares 76,230
1 115,001 120,000 Shares 116,018
1 140,001 145,000 Shares 144,582
1 145,001 150,000 Shares 146,145
2 150,001 155,000 Shares 307,760
1 270,001 275,000 Shares 273,721
1 400,001 405,000 Shares 402,422
1 410,001 415,000 Shares 410,274
1 510,001 515,000 Shares 512,853
1 670,001 675,000 Shares 672,427
1 735,001 740,000 Shares 737,346
2 775,001 780,000 Shares 1,553,413
1 875,001 880,000 Shares 877,865
1 1,015,001 1,020,000 Shares 1,018,801
1 1,235,001 1,240,000 Shares 1,235,029
1 1,260,001 1,265,000 Shares 1,260,096
1 1,440,001 1,445,000 Shares 1,443,175
1 2,830,001 2,835,000 Shares 2,832,516
1 5,485,001 5,490,000 Shares 5,488,699
2 7,125,001 7,130,000 Shares 14,254,702
------------------ ------------------
2,152 35,636,772
========== ==========
Categories of Shareholders Number Shares held Percentage
Individuals 2,114 8,980,344 25.20
Investment companies 3 1,078 --
Insurance companies 6 953,174 2.68
Joint stock companies 16 10,235,571 28.72
Financial institutions 3 1,040,796 2.92
Charitable institution 1 45,240 0.13
Government organisations 2 33,493 0.09
Foreign companies 4 14,341,822 40.24
Banks 3 5,254 0.02
------------------ ------------------ ------------------
2,152 35,636,772 100.00
========== ========== ==========
IQBALALI LAKHANI TASLEEMUDDIN A. BATLAY
Chairman & Chief Executive Director
Auditors' Report to the Members
We have audited the annexed Balance Sheet of Premier Tobacco Company (Pvt) Limited as at June
30, 2001 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 purpose of our audit.
It is the responsibility of the Company's management to establish and maintain a system of internal
control, and prepare and present the above said statement in conformity with the approved accounting
standards and the requirements of the Companies Ordinance, 1984. Our responsibility is to express
an opinion on this statement based on our audit.
We conducted our audit in accordance with the auditing standards as applicable in Pakistan. These
standards require that we plan and perform the audit to obtain reasonable assurance about whether
the above said statement is free of any material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the above said statement. 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 statement. 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;
(b) in our opinion:
(i) the Balance Sheet has been drawn up in conformity with the Companies Ordinance,
1984 and is in agreement with the books of accounts and is further in accordance
with the accounting policies consistently applied;
(ii) the business conducted, investments made and the expenditure incurred during the
year if any 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 Sheet conforms with approved accounting standards as applicable in
Pakistan, and gives information required by the Companies Ordinance, 1984 in the manner
so required and gives true and fair view of the state of the Company's affairs as at June
30, 2001; and
(d) in our opinion, no Zakat was deductible at source under the Zakat and Ushr Ordinance,
1980.
Hyder Bhimji & Co.
Karachi: August 07, 2001 Chartered Accountants
Balance Sheet as at June 30, 2001
June 30, June 30,
2001 2000
Rupees Rupees
CAPITAL AND LIABILITIES
AUTHORISED CAPITAL
1,000,000 ordinary shares of Rs. 10/- each 10,000,000 10,000,000
========== ==========
ISSUED TO PAID-UP CAPITAL
103 ordinary shares of Rs. 10/- each fully paid-up 1,030 1,030
------------------ ------------------
Total Rupees 1,030 1,030
========== ==========
PROPERTY AND ASSETS
CASH AND BANK BALANCES
Cash at bank (in current account) 1,030 1,030
------------------ ------------------
Total Rupees 1,030 1,030
========== ==========
NOTE: The Company has not done any business during the year from July 1, 2000 to June 30, 2001.
FAROOQ SHAKOOR RAMZAN ALI HALANI
Karachi: August 07, 2001 Chief Executive Director
Financial Highlights
(Rs. in thousand except last five items)
June 30 June 30 June 30 June 30 June 30
2001 2000 1999 1998 1997
Share capital 356,367 237,578 215,980 196,345 163,621
Reserves & surplus 992,499 716,580 501,104 431,065 388,077
Share holders' equity 1,348,866 954,158 717,084 627,410 551,698
Redeemable capital & liabilities against
assets subject to finance lease 255,138 142,968 242,329 577,126 213,383
Deferred liabilities 87,700 73,700 49,700 26,700 22,466
------------------ ------------------ ------------------ ------------------ ------------------
TOTAL CAPITAL EMPLOYED 1,691,704 1,170,826 1,009,113 1,231,236 787,547
========== ========== ========== ========== ==========
Fixed assets - NET 945,592 897,972 764,715 686,363 510,901
Long-term investment 1 1 1 1 1
Long-term deposits & prepayments 42,427 28,163 39,345 42,785 30,129
Working capital 703,684 244,690 205,052 502,087 246,516
------------------ ------------------ ------------------ ------------------ ------------------
TOTAL ASSETS 1,691,704 1,170,826 1,009,113 1,231,236 787,547
========== ========== ========== ========== ==========
Turnover 15,466,198 14,730,137 14,073,173 12,195,166 6,697,980
Profit before tax 604,914 710,484 349,221 228,566 129,792
Profit after tax & adjustment 394,708 474,653 180,385 150,324 89,758
Dividend declared (cash) 196,002 237,579 90,712 74,612 68,721
Bonus shares -- 118,789 21,598 19,634 32,724
Break-up value of shares
(inclusive of fixed assets revaluation) 37.85 40.16 33.20 31.95 33.72
Break-up value of shares
(excluding fixed assets revaluation) 36.42 38.01 30.84 29.35 30.60
Dividend (Rupees per share) 5.50 10.00 4.20 3.80 4.20
Bonus shares -- 1:2 1:10 1:10 1:5
Net earnings per share 11.08 13.32 8.35 7.66 5.49
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