| 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) |
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|
|
|
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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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|
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| 5. ISMAILA |
|
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| DISTT. SWABI |
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| 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. |
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|
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|
By Order of the Board |
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|
|
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. |
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|
|
|
| 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 |
