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Introduction
KTC is a public limited company established in 1954 and is listed on Pakistan Stock Exchange.
Khyber Tobacco Company (KTC) is a public limited company renowned in tobacco and
cigarette industry for the last 6 decades. During its long period of existence in the industry, the
Company witnessed several peaks and troughs yet the Company succeeded in ensuring its
existence in the Industry. Khyber Tobacco has achieved the heights of business with its clear
and ambitious vision, high quality and vigilant team and is enjoying the status of being among
the top few companies of Pakistan in tobacco industry. The company is enduring to extend its
operations around the Globe with an established distribution network in parts of Far East Asia,
Eastern Europe, South and West Africa, Central and South Asia and the Middle East.
With internationally recognized brands, a fully integrated production facility and a wealth of
experience and expertise
KTC is in an ideal position to provide leaf and blended tobacco. We have good quality brands,
private label cigarettes, filter-rods and other non-tobacco material in our portfolio. Our team of
industry experts aim to introduce well researched brands after rigorous testing and blending of
tobacco from around the world to give the customer distinctively valuable experience. KTC has a
strong foothold in its native country with a modern fully integrated production facility aimed at
export quality brands and a vast and well established sales and distribution network.
During its endeavors to reach the top in the Industry, the Company has been able to succeed up
to an extent and the Company has been awarded with the following awards:

 Federation of Pakistan Chambers of Commerce & Industry (FPCCI) Best Export

Performance Award for the Year 2014 for being the highest Tobacco Exporter in the
year.
 Federation of Pakistan Chambers of Commerce & Industry (FPCCI) Best Export
Performance Award for the Year 2015 for being the highest Tobacco Exporter in the
year.

Corporate governance structure

We ensure best practices of Corporate Governance by adopting a set of processes, customs and
policies, to help us direct and control management activities with good business sense,
objectivity, accountability and integrity.
We have made corporate governance a system of structuring, operating and controlling the
Company with a view to achieve long term strategic goals to satisfy shareholders, creditors,
employees, customers and suppliers. We adhere to the best ethical practices and comply with
applicable legal and regulatory requirements
 Board of directors

Audit committee

Human recourse committee

Senior management

Company secretary

Bankers

Auditors

The board
The Board comprises of seven members, of which five are non-executive directors while the
Remaining two are executive directors. The position of Chairman and Chief Executive Officer
are kept separate in line with good governance practices.
The Directors are fully aware of the level of trust that shareholders have in them and the
immense responsibility that they have bestowed on them for smooth running of the Company
and safe guarding its assets.
The business of the company is conducted by the Board of Directors. The Board of Directors
functions at the strategic level for planning, management, control, supervision, and direction of
all industrial and commercial activities of the Company. The Chief Executive Officer directs
and oversees the day to day operations of the Company with the assistance of the management
and directors for which purpose the Board of Directors has constituted various committees.
Committees of the Board perform their duties in their specific area of activity
.

Board of directors meeting

Legally, the Board is required to meet at least once in each quarter to monitor the Company’s
performance aimed at effective and timely accountability of its management
Committees of the Board
In order to ensure effective implementation of a sound internal control system and compliance
with the Code of Corporate Governance, the Board has constituted various committees.
Composition of these committees is annexed with this report

Corporate Governance

The company is committed to high standards of corporate governance to ensure business

integrity and upholding the confidence of all the stakeholders. The Board of Directors is
accountable to the shareholders for good corporate governance and management of the
company is continuing to comply with the provisions of best practices set out in the Code of
Corporate Governance particularly with regard to independence of non-executive directors. The
Company remains committed to conduct its business in line with the listing regulations of
Pakistan Stock Exchange, which clearly define the role and responsibilities of the Board of
Directors and management. Vision & Mission statements, Core values and Statement of Ethics
& Business Practices have been prepared and approved by the Board. Significant policies as
required under the Code of Corporate Governance have been framed and reviewed by the
Board and shall be approved shortly.

The following specific statements are being given to comply with the requirements of the Code
of Corporate Governance;

There has been no transaction in the shares of the Company by the Chief Executive Officer,
Directors,
Company Secretary and their spouses and minor children during the year under review.
The financial statements prepared by the management of the Company fairly present its state of
affairs, the results of its operations, cash flows and changes in equity.
The Company has maintained proper books of account. Appropriate accounting policies have
been adopted and consistently applied in preparation of financial statements and accounting
estimates are based on reasonable and prudent judgment. International Accounting Standards,
as applicable in
Pakistan, have been followed in preparation of financial statements. The system of internal
control I sound in design and has been effectively implemented. The system itself is also subject
to continuous review for enhancement wherever and whenever necessary.
There are no doubts about the Company’s ability to continue as a going concern.
There has been no material departure from the best practices of corporate governance, as
detailed in the listing regulations.
Key operating and financial data of the last six (06) years in summarized form is annexed to this
report

Audit committee
The role of the Audit Committee is to monitor the integrity of the Company’s financial
statements and review and, when appropriate, make recommendations to the main Board on
business risks, internal controls and compliance. It is also responsible for making
recommendations to the Board on the appointment of, and fees to be paid to, the Company’s
external auditors
Human rescores committee
The Company’s human resource committee focuses on maximizing return on investment in the
organization’s human capital to minimize financial risk. We seek to achieve this by aligning the
supply of skilled and qualified individuals and the capabilities of the current workforce with the
organization’s ongoing and future business plans and requirements to maximize return and to
secure the future survival and success
The Human Resources Committee is created by the Board of Directors (the Board)
 oversee the Company's compensation and benefits policies generally;
 evaluate executive officer performance and review the Company's management succession plan;
 oversee and set compensation for the Company's executive officers, including its Chief Executive
Officer (CEO);
 retain and terminate compensation consultants;

Senior management
The senior managers responsible for planning and directing the work of a group of individuals,
monitoring their work, and taking corrective action when necessary Senior managers may guide workers
directly or they may direct several supervisors who manage the workers. The senior manager often
supervises the largest or most important group(s) in a company. Core responsibilities of the senior
manager include:
 Providing guidance to direct reports, typically comprised of first-line managers and supervisors.
 Ensuring clarity around priorities and goals for the entire functional area.
 Approving requests for investment to a certain level of authority.
 Managing overall financial budgeting for his/her function.
 Approving hiring and firing requests within his/her group.
 Guiding the talent identification and development processes for a group or function.
 Working across functions with peers in other groups to ensure collaboration for shared goals.
 Interacting with senior management for reporting.
 Working with senior management and other peers for strategy development and execution
planning.
 Communicating financial and goal results and key performance indicators to direct reports.

Company secretary

 To ensure compliance of the provisions of Companies Law and rules made there-under
and other statutes and bye-laws of the company.
 To ensure that business of the company is conducted in accordance with its objects as
contained in its memorandum of association.
 To ensure that affairs of the company are managed in accordance with its objects
contained in the articles of association and the provisions of the Companies Law.
 To prepare the agenda in consultation with the Chairman and the other documents for all
the meetings of the board of directors.
  To arrange with and to call and hold meetings of the board and to prepare a correct record
of proceedings.
 To attend the broad meetings in order to ensure that the legal requirements are fulfilled,
and provide such information as are necessary.
 To prepare, in consultation with the chairman, the agenda and other documents for the
general meetings.
 To arrange with the consultation of chairman the annual and extraordinary general
meetings of the company and to attend such meetings in order to ensure compliance with
the legal requirements and to make correct record thereof.
 To carry out all matters concerned with the allotment of shares, and issuance of share
certificates including maintenance of statutory Share Register and conducting the
appropriate activities connected with share transfers.
 To prepare, approve, sign and seal agreements leases, legal forms, and other official
documents on the company’s behalf, when authorised by the broad of the directors or the
executive responsible.
 To advise, in conjunctions with the company’s solicitors, the chief executive or other
executive, in respect of the legal matters, as required.
 To engage legal advisors and defend the rights of the company in Courts of Law.
 To have custody of the seal of the company

bankers

Auditor

For the purpose of ensuring consistency and standardization, the Board has devised formal
policies for conducting business and ensures their monitoring through an independent Inter
Audit, which continuously ensures adherence to Company policies and reports any deviation
observed to the Audit Committee
The Auditors Messrs KPMG Taseer Hadi & Co, Chartered Accountants retire at the conclusion
of the 62nd Annual General Meeting and being eligible, have offered themselves for
reappointment as Auditors for the ensuing financial year ending 30 June 2018.The Audit
Committee in their meeting held on 07 October, 2017 has recommended the re-appointment of
Messrs KPMG Taseer Hadi & Co, Chartered Accountants as the Auditors for the financial year
ending 30 June, 2018.