Report on corporations pakistan tobacco company limited

Submitted to : seher zaist

Submitted by :
Minhas ali khan
Naeem khan
Waqas khan
MBA 1B MORNING

Pakistan Tobacco Company Limited

INTRODUCTION

Pakistan Tobacco Company was incorporated in 1947 immediately after partition by taking the business
from imperial Tobacco Company (India), so making it the first multinational company of Pakistan and
recently completed 60 years of its operations in the country. The company is the member of the
multinational British American tobacco group, which employs over 200000 persons and operates in 180
countries. It was incorporated into Pakistan and is listed on three stock exchanges of the country. It was
established on the year when Pakistan came into being i.e. 1947 and took over the business of imperial
tobacco company. It has three branches namely Karachi, Akhora khattak and Jhelum but Karachi factory
has been closed since 1992 due to heavy losses and some other technical reasons.
The 1st plants setup was in a warehouse in Karachi port with monthly production of 30 million cigarettes
against sales of 60 million, the gap between supply and demand was then filled up by import.
When Pakistan came into being all tobacco was imported in for production of cigarettes but in 1952 a
development project was initiated in NWFP and the top quality American tobacco found way to Pakistan.
A factory was established in 1955 at Jhelum and Pakistan Tobacco Company became a public limited
company in the same year. In 1975 a new cigarette factory was setup at Akhora khattak to meet the
increasing demand of cigarette in the country.

BOARD OF DIRECTORS
The Board comprises 6 non-executive directors and 3 executive directors. The positions of Chairman and
CEO are kept separate in line with good corporate governance practices

Business Performance
Provided below are the key financial indicators for the year 2013:
(Rs in millions)
GROSS TURNOVER

2013
89,929

Levies (Excise Duty & Sales Tax)

Net Turnover
Gross Profit

59,306
30,623
10,610

Operating Profit

4,602

Profit before Tax

4,667

Profit after Tax

Earnings per Share - EPS (Rs)

3,124
12.23

2013
Numbers of Shares
2013
Rs 000
2013
Numbers of Shares
2013
Rs 000
Share capital of Pakistan tobacco company limited of 2013

Authorized share capital

Issued, subscribed and paid-up

capital

3,000,000
300,000,000
Ordinary shares of Rs 10 each

Cash
Bonus shares
2,303,571
251,367
230,357,068
25,136,724
Total =255,493,792

Authorize share:
The number of stock units that a publicly traded company can issue as stated in its articles of
incorporation, or as agreed upon by shareholder vote. Authorized share capital is often not fully used
by management in order to leave room for future issuance of additional stock in case the company

needs to raise capital quickly. Another reason to keep shares in the company treasury is to retain a
controlling interest in the company
Issued share:
The number of authorized shares that is sold to and held by the shareholders of a company,
regardless of whether they are insiders, institutional investors or the general public.
Paid up capital:
The amount of a company's capital that has been funded by shareholders. Paid-up capital can be less
than a company's total capital because a company may not issue all of the shares that it has been
authorized to sell. Paid-up capital can also reflect how a company depends on equity financing
Ordinary shares:
Any shares that are not preferred shares and do not have any predetermined dividend amounts. An
ordinary share represents equity ownership in a company and entitles the owner to a vote in matters
put before shareholders in proportion to their percentage ownership in the company.

PTC issued only ordinary shares or common stock

All shares are issued at par value that is Rs 10 each
In the balance sheet of ptc on DEC 31, 2013 the Share capital of ptc was 2554938000.
Authorize capital of 2013 was 300,000,000
Issued shares were 230,357,068 for cash and 230,357,068 for bonus shares

2013 number of share

cash
Bonus shares

230,357,068 @ 10
25,136,724 @ 10
Total

2,303,571000
251,367000
2554938000

Categories of sharesholder:

number

Associated companies ,undertaking and related parties

241843423

94.7

Invested companies
Insurance companies

2
7

1835758
904268

0.7
0.4

Individuals
Others

3425
67

3459060
7281482

1.4
2.8

255493792

100.0

Total

3531

shares held

Statement of Changes in Equity

Revenue reserve Rs 000
Balance at January 1, 2013

1,552,462

Comprehensive income:
Profit for the year Other comprehensive income for the year Total Comprehensive income for the year -

3,124,309
32,829
3,157,138

Transactions with owners:

Final dividend of Rs 3.25 per share relating to the year
ended December 31, 2012 -

(830,354)

1st interim dividend of Rs 2.00 per share relating to the

year ended December 31, 2013 -

(510,988)

2nd interim dividend of Rs 2.00 per share relating to the

year ended December 31, 2013 -

(510,988)

Total transactions with owners -

(1,852,330)

Balance at December 31, 2013

2,857,270

Retained earning:
The percentage of net earnings not paid out as dividends, but retained by the company to be reinvested in its core
business or to pay debt. It is recorded under shareholders' equity on the balance sheet.
The formula calculates retained earnings by adding net income to (or subtracting any net losses from) beginning
retained earnings and subtracting any dividends paid to shareholders:

Balance at January 1, 2013 or retained earning is 1,552,462000

Total comprehensive income for the year 2013 is 3,157,138000
Final dividend of Rs 3.25 per share relating to the year
ended December 31, 2012 was
(830,354000)
1st interim dividend of Rs 2.00 per share relating to the
year ended December 31, 2013 (510,988000)
2nd interim dividend of Rs 2.00 per share relating to the
year ended December 31, 2013 (510,988000)
Total transactions with owners -

(1,852,330000)

Retained earning = Balance at January 1, 2013> 1,552,462000 + Total comprehensive income for the
year 2013 > 3,157,138000 - Total transactions with owners (1,852,330000)

Retained earning = 2,857,270000

Dividend:
A taxable payment declared by a company's board of directors and given to its shareholders out of the
company's current or retained earnings, usually quarterly. Dividends are usually given as cash (cash
dividend), but they can also take the form of stock (stock dividend) or other property. Dividends provide
an incentive to own stock in stable companies even if they are not experiencing much growth. Companies
are not required to pay dividends. The companies that offer dividends are most often companies that have
progressed beyond the growth phase, and no longer benefit sufficiently by reinvesting their profits, so they
usually choose to pay them out to their shareholders. also called payout
Dividend paid for the year 2013

(1,852,330000)

Interest expense on:

Bank borrowings

44,310000

Interest:
The cost incurred by an entity for borrowed funds. Interest expense is a non-operating expense shown on
the income statement. It represents interest payable on any type of borrowings bonds, loans, convertible
debt or lines of credit. It is basically calculated as the interest rate times the outstanding principal amount of
the debt. Interest expense on the income statement represents interest accrued during the period covered by
the financial statements, and not the amount of interest actually paid over that period. While interest
expense is tax-deductible for companies, in an individual's case, it depends on his or her jurisdiction and
also on the loan's purpose

This represents the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market interest rates. The Company is not exposed to fair value interest rate risk as it
does not hold any fixed rate instruments. The Company has no significant long-term interest-bearing assets
or liabilities whose fair value or future cash flows will fluctuate because of changes in market interest rates.

Depreciation:
A method of allocating the cost of a tangible asset over its useful life. Businesses depreciate long-term assets
for both tax and accounting purposes.
Operating assets:
At January
1, 2013

Freehold
land

Buildin
g on
free
hold
land

Buildin
g on
lease
hold
land

Rs 000
753,653
(192,895)

Rs 000
25,712
(15,768)

349
(324)

8,755,842
(4,405,848)

Rs 000
609,223
(359,660)

99,350
(47,408)

534,297
(424,459)

173,838
(17,477)

10,982,834
(5,463,839)

30,570

560,758

9,944

25

4,349,994

249,563

51,942

109,838

156,361

5,518,995

30,570

560,758

9,944

25

4,349,994

249,563

51,942

109,838

156,361

5,518,995

85,505
(17,535)
(22,038)

(550)
(568)

(25)

812,968
(8,169)
(561,459)

155,167
(2,780)
(134,126)

4,697
(528)
(15,159)

3,079
(13,242)
(12,787)

361,278
(16,359)
(66,011)

1,422,694
(59,188)
(812,148)

30,570

606,690

8,826

4,593,334

267,824

40,952

86,888

435,269

6,070,353

Rs
000
Cost
Accumulate
d
Depreciation
Net book
amount
January 1,
2013
Year ended
December
31, 2013
Net book
amount at
January 1,
2013
Additions
Disposals
Depreciation
charge
Net book

30,570

Private
railwa
y
sidings

Plant and
machiner
y
Rs 000

Rs 000

Office
and house
hold
equipmen
t

Furnitur
e and
fitting

Vehicles
owned
Rs 000

Rs 000

Vehicles
under
finance
lease

Total

Rs 000

Rs 000

amount at
December
31, 2013
At
December
31, 2013
Cost
Accumulate
d
depreciation
Net book
amount at
December
31, 2013

30,570

30,570
(195,938)

22,149
(13,323)

9,314,801
(4,721,467)

742,444
(474,620)

100,760
(59,808)

425,229
(338,341)

514,442
(79,173)

11,953,023
(5,882,670)

30,570

606,690

8,826

4,593,334

267,824

40,952

86,888

435,269

6,070,353

Land is not depreciated. Depreciation on other assets is calculated using the straight-line method to allocate
their cost over their estimated useful lives at the following annual rates:

2013
1> Buildings on free-hold land, buildings on leasehold land
and private railway sidings
2>Plant and machinery
3>Air conditioners included in plant and machinery
4>Office and household equipment
5>Furniture and fittings
6>Vehicles - Owned and leased

3%
7%
20%
20% to 33.33%
10% to 20%
20%

As there is no depreciation on land cause on time passing land increased his value. At jan 1, 2013 total cost
of operating assets were 10,982,834000 and total accumulated depreciation is (5,463,839000) and the net
book amount on jan 1, 2013 was 5,518,995000. And at the year ended at dec 31, 2013 the total additions
in the operating assets were 1,422,694000 and total disposal means those assets which are not useable
further are (59,188000) & the total depreciation charge was (812,148000) and the net book amount at
December 31, 2013 6,073,717