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Lakson Tobacco Company Limited |
|
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|
ANNUAL REPORT 1996 |
|
|
| CONTENTS |
PAGE |
|
|
| Company
Information |
|
|
2 |
|
| Notice
of Meeting |
|
|
3 |
|
| Directors'
Report |
|
|
4-5 |
|
| Pattern
of holding of Shares |
|
|
6 |
|
| Auditors'
Report to the Members |
|
|
7 |
|
| Balance
Sheet |
|
|
8-9 |
|
| Profit
& Loss Account |
|
|
10 |
|
| Statement
of Sources & Application of Funds (Cash Flow Statement) |
11-12 |
|
| Notes
to the Accounts |
|
|
13-29 |
|
| Financial
Highlights |
|
|
30 |
|
|
| Company
Information |
|
|
| BOARD
OF DIRECTORS |
|
| IQBALALI
LAKHANI |
|
(Chairman & Chief
Executive) |
|
| AMIN
MOHAMMED LAKHANI |
|
| JON
BACKHOUSE |
|
(upto July 16, 1996) |
|
| CHRISTOPHER
DENNISTOMKINSON |
|
|
|
| PETER
GEORGE GREGORY |
|
|
|
| E.A.NOMANI |
|
| HASANALI
H. MERCHANT |
|
| TASLEEMUDDIN
AHMED BATLAY |
|
| AZIZ
EBRAHIM |
|
| A.K.M.
SAYEED |
|
| RAMZANALI
HALANI |
|
| M.K. NAWAZ |
|
|
| ADVISOR |
|
| SULTANALl
LAKHANI |
|
|
|
| COMPANY
SECRETARY |
|
| RAMZANALI HALANI |
|
|
|
| AUDITORS |
|
| 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 (SINDH) |
|
|
|
|
| 2.
PLOT NO. 20, SECTOR NO. 17, |
|
| KORANGI
INDUSTRIAL AREA. KARACHI. |
|
|
|
|
| 3.
QUADIRABAD, |
|
| DISTT.
SAHIWAL |
|
|
|
| Notice
of Meeting |
|
| NOTICE
IS HEREBY given that the 27th Annual General Meeting of Lakson Tobacco
Company |
|
| Limited
will be held at Avari Renaissance Towers Hotel, Fatima Jinnah Road, Karachi
at 11.00 a.m. |
|
| on
Thursday December 26, 1996 to transact the following business: |
|
|
|
| 1.
To receive, consider and adopt the audited Balance Sheet and Profit &
Loss Account for the |
|
| year
ended June 30, 1996 together with the Directors' and Auditors' Reports
thereon. |
|
|
|
|
| 2.
To declare a final dividend @ 20% i.e. Rs.2.00 per share for the year ended
June 30, 1996 |
|
| as
recommended by the Board of Directors. |
|
|
|
| 3.
To appoint Auditors and fix their remuneration. |
|
|
| By
order of the Board |
|
|
|
| RAMZANALI
HALANI |
|
| Director/Company
Secretary |
|
|
|
| Karachi:
November 21, 1996 |
|
|
|
|
|
|
| NOTES: |
|
| The
share transfer books of the Company will remain closed from December 16, 1996
to |
|
| December
26, 1996 (both days inclusive). Transfers received in order at the registered
office |
|
| of
the Company upto December 15, 1996 will be considered in time. |
|
|
| A
member entitled to attend and vote at the Annual General Meeting is entitled
to appoint |
|
| another
member as his proxy to attend, speak and vote instead of him. A proxy must be
a |
|
| member
of the Company. |
|
|
| 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. |
|
|
| Members
are requested to notify any change in their addresses to the Company
immediately. |
|
|
| A
proxy form is enclosed herewith. |
|
|
| Directors'
Report |
|
|
|
| The
Directors of your Company take pleasure in presenting their report and
audited accounts for the year ended |
|
| June
30, 1996. |
|
|
|
1996 |
1995 |
|
|
(Rupees' 000) |
|
|
|
|
|
| Profit
before taxation |
|
|
66,419 |
60,934 |
|
| Taxation |
|
|
|
18,299 |
18,434 |
|
|
---------------------- |
|
| Profit
after taxation |
|
48,120 |
42,500 |
|
|
| Un-appropriated
profit brought forward |
|
36 |
27 |
|
|
---------------------- |
|
|
|
|
|
48,156 |
42,527 |
|
| Appropriations: |
|
|
|
|
| Proposed
cash dividend @ Rs. 2.00 |
|
|
|
| (1995:
Rs. 2.70) per ordinary share of Rs. 10/- each |
16,092 |
21,725 |
|
|
|
|
| Transfer
to general reserve |
|
24,000 |
20,766 |
|
|
|
---------------------- |
|
|
|
40,092 |
42,491 |
|
|
|
|
|
|
|
---------------------- |
|
| Un-appropriated
profit carried forward |
|
8,064 |
36 |
|
|
|
====================== |
|
|
|
| OPERATING
RESULTS |
|
| Turn
over for the review period touched Rs. 2,727 million which was about Rs. 98
million higher than 1995. |
|
|
| Profit
after taxation increased by Rs. 5.6 million, or 13.2% over the previous year.
This increase is attributable to |
|
| higher
sales, price increases and continuous improvements in cost control measures
and containing expenses |
|
| within
the going inflation rate. Net earnings per share rose from Rs. 5.28 to Rs.
5.98. The central excise duty and |
|
| sales
tax paid on tobacco and cigarettes during the year was Rs. 1,727 million,
which is 65.1% of the Company's |
|
| domestic
sales revenue. |
|
|
| BOARD
OF DIRECTORS |
|
| The
Board welcomes the newly elected Directors Mr. Peter George Gregory, a
nominee of Rothmans of Pall Mall |
|
| (International)
LTD, and M/s. Ramzanali Halani and M.K. Nawaz. The Board also appreciates the
valuable services |
|
| rendered
by the outgoing Director Mr. Jon Backhouse during his tenure on the Board. |
|
|
| LEAF
TOBACCO |
|
| The
1995 tobacco crop was adequate to meet the industry's requirements and
considerable improvement was |
|
| visible
both in quantity and quality, particularly of the Company supervised
production. Your Company was able |
|
| to
procure its requirements at competitive prices. Increased inventory levels
resulted from the requirement that |
|
| the
Company absorb a pro-rata allocation of the surplus crop. |
|
|
| FUTURE
OUTLOOK |
|
| Margins
in the cigarette industry will continue to be under pressure due to direct
and indirect monetary impacts |
|
| introduced
in the Federal Budget 1996-1997. Sales tax on cigarettes has been increased
from 15% to 18%, |
|
| which
is an increase of 20 percent. Raw material prices are expected to remain high
due to the continued |
|
| devaluation
of the Pak rupee which may seriously erode profitability. |
|
|
| Pretax
profits to turnover increased from 2.32% to 2.43%, which is still inadequate
to run a cash intensive |
|
| industry.
Your Company will endeavor to increase sales volume through continuous sales
promotion efforts |
|
| coupled
with improved quality, distribution and productivity as well as effective
cost controls. |
|
|
| Due
to the monetary impact of the Federal Budget 1996-1997, the Company had no
choice but to increase the |
|
| prices
of its products soon after budget announcement. |
|
|
| Your
Company is actively pursuing an appropriate restructuring to improve
productivity by curtailing costs and |
|
| expenses
to attain improved margins. The Directors look forward with the hope of
continuation of levels of |
|
| profitability
achieved. |
|
|
| MERGER
OF LAKSON AND PREMIER |
|
| Under
the instructions of the Honorable High Court of Sindh, two separate
extraordinary general meetings of |
|
| the
members of Lakson and Premier were held on September 25, 1996. The members of
both the Companies |
|
| have
overwhelmingly approved the merger scheme as required under the law. The
Chairman's report in the |
|
| matter
has already been submitted to the Honorable High Court of Sindh as required
and further actions are |
|
| being
pursued with it. |
|
|
| INDUSTRIAL
RELATIONS |
|
| The
Directors wish to place on record their appreciation of the loyal and
efficient services rendered by the |
|
| employees
towards promoting the Company's objectives. The development of management and
staff has high |
|
| priority
in the Company and the Company continues to benefit from the efforts and
dedication of all employees. |
|
|
| A
Total Quality Management (TQM) programme has been implemented over the period
of this report with |
|
| encouraging
results. |
|
|
| PATTERN
OF SHAREHOLDING |
|
| A
pattern of shareholding in the prescribed form appears at page number 6. |
|
|
| AUDITORS |
|
| The
Auditors M/s. Ebrahim & Company, Chartered Accountants, retire and offer
themselves for re-appointment. |
|
|
|
|
On behalf of Board of Directors |
|
|
|
|
|
IQBALALI LAKHANI |
|
|
|
Chairman |
|
| Karachi:
November 14, 1996 |
|
|
|
| Pattern
of Holding of Shares |
|
|
|
|
|
HELD BYTHE SHAREHOLDERS OF LAKSON TOBACCO COMPANY LTD. |
|
|
|
|
AS AT JUNE 30, 1996 |
|
|
| No. of |
|
|
Shareholding |
|
| Shareholders |
From |
|
To |
Total Shares held |
|
|
| 368 |
|
1 |
100 |
Shares |
16,012 |
|
| 278 |
|
101 |
5OO |
Shares |
63,511 |
|
| 91 |
|
501 |
1,000 |
Shares |
60,571 |
|
| 71 |
|
1,001 |
5,000 |
Shares |
161,450 |
|
| 16 |
|
5,001 |
10,000 |
Shares |
101,528 |
|
| 6 |
|
10,001 |
15,000 |
Shares |
70,469 |
|
| 3 |
|
15,001 |
2O,0OO |
Shares |
52,948 |
|
| 1 |
|
25,001 |
30,000 |
Shares |
29,126 |
|
| 1 |
|
30,001 |
35,000 |
Shares |
33,209 |
|
| 4 |
|
55,001 |
60000 |
Shares |
228,995 |
|
| 1 |
|
60,001 |
65 000 |
Shares |
62,208 |
|
| 1 |
|
75,001 |
80 000 |
Shares |
79,351 |
|
| 1 |
|
85,001 |
90 000 |
Shares |
88,789 |
|
| 1 |
|
90,001 |
95 000 |
Shares |
90,696 |
|
| 1 |
|
115,001 |
120 000 |
Shares |
116,574 |
|
| 4 |
|
120,001 |
125 000 |
Shares |
480,755 |
|
| 1 |
|
140,001 |
145 000 |
Shares |
142,406 |
|
| 2 |
|
145,001 |
150 000 |
Shares |
299,112 |
|
| 2 |
|
205,001 |
210,000 |
Shares |
416,699 |
|
| 1 |
|
235,001 |
240,000 |
Shares |
235,429 |
|
| 1 |
|
275,001 |
280,000 |
Shares |
277,537 |
|
| 1 |
|
340,001 |
345,000 |
Shares |
344,605 |
|
| 1 |
|
355,001 |
360,000 |
Shares |
355,835 |
|
| 1 |
|
510,001 |
515,000 |
Shares |
511,406 |
|
| 1 |
|
650,001 |
655,000 |
Shares |
653,894 |
|
| 1 |
|
655,001 |
660,000 |
Shares |
659,198 |
|
| 2 |
|
1,205,001 |
1,210,000 |
Shares |
2,413,842 |
|
| ----------- |
|
|
----------- |
|
| 862 |
|
8,046,155 |
|
| =========== |
|
=========== |
|
|
| Categories
of |
|
| Shareholders |
|
Number |
Shares held |
Percentage |
|
|
|
| Individuals |
|
843 |
2,894,791 |
35.98 |
|
| Insurance
companies |
|
5 |
517,332 |
6.43 |
|
| Joint
stock companies |
|
6 |
1,530,639 |
19.02 |
|
| Financial
institutions |
|
2 |
671,265 |
8.34 |
|
| Government
organizations |
|
2 |
11,834 |
0.15 |
|
| Foreign
companies |
|
3 |
2,418,842 |
30.06 |
|
| Bank |
|
1 |
1,452 |
0.02 |
|
|
----------- |
----------- |
----------- |
|
|
|
862 |
8,046,155 |
100.00 |
|
|
|
=========== |
=========== |
=========== |
|
|
|
| IQBALALI
LAKHANI |
|
| Chairman
& Chief Executive |
|
|
| TASLEEMUDDIN
AHIMED BATLAY |
|
| Director |
|
|
|
|
|
| Auditors'
Report to the Members |
|
| We
have audited the annexed balance sheet of LAKSON TOBACCO COMPANY LIMITED as
at June 30, |
|
| 1996
and the related profit and loss account and statement of sources and
application of funds, 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
and, after due verification thereof, 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 accounts 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 and the statement of sources and application
of funds |
|
| together
with the notes forming part thereof, 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, 1996 and of the profit and the changes in
sources and application |
|
| of
funds 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. |
|
|
|
| EBRAHIM
& CO. |
|
| Chartered
Accountants |
|
|
|
| Karachi:
November 14, 1996. |
|
|
|
| Balance
Sheet as |
|
|
|
|
1996 |
1995 |
|
|
|
|
NOTES |
(Rupees'000) |
|
| CAPITAL
AND RESERVES |
|
|
|
| Authorised
capital |
|
| 20,000,000
ordinary shares |
|
|
|
| of
Rs. 10/- each |
|
|
200,000 |
200,000 |
|
|
|
|
====================== |
|
|
|
|
| Issued,
subscribed and paid-up capital |
3 |
80,461 |
80,461 |
|
| Reserves |
|
4 |
111,000 |
87,000 |
|
| Unappropriated
profit |
|
8,064 |
36 |
|
|
|
|
---------------------- |
|
|
|
199,525 |
167,497 |
|
|
|
|
|
| SURPLUS
ON REVALUATION OF FIXED ASSETS |
|
12,238 |
12,238 |
|
| LIABILITIES
AGAINST ASSETS SUBJECTTO |
|
|
|
| FINANCE
LEASES |
|
5 |
36,163 |
21,794 |
|
| DEFERRED
LIABILITY |
|
6 |
10,092 |
11,179 |
|
| CURRENT
LIABILITIES |
|
|
|
| Current
portion of long term liabilities |
7 |
12,903 |
8,657 |
|
| Short
term redeemable capital |
|
8 |
75,000 |
- |
|
| Short
term running finances |
|
9 |
93,812 |
174,957 |
|
| Creditors,
accrued and other liabilities |
10 |
168,439 |
114,616 |
|
| Provision
for taxation - Income tax |
|
21,000 |
20,000 |
|
| Dividends |
|
11 |
16,592 |
22,135 |
|
|
| CONTINGENCIES
AND COMMITMENTS |
|
12 |
387,746 |
340,365 |
|
|
|
---------------------- |
|
|
|
645,764 |
553,073 |
|
|
|
======================= |
|
|
|
| NOTE
:The annexed notes form an integral part of these accounts. |
|
|
| Karachi:
November 14, 1996 |
|
| at
June 30, 1996 |
|
|
|
|
|
1996 |
1995 |
|
|
|
|
NOTES |
(Rupees'000) |
|
|
|
| TANGIBLE
FIXED ASSETS |
|
13 |
184,675 |
159,897 |
|
|
|
|
|
|
|
|
| LONGTERM
LOAN AND DEPOSITS |
|
14 |
10,367 |
7,127 |
|
|
|
|
| CURRENTASSETS |
|
|
|
| Stores
and spares |
|
15 |
54,545 |
48,018 |
|
| Stock
in trade |
|
16 |
278,754 |
248,393 |
|
| Trade
debtors |
|
17 |
28,404 |
28,091 |
|
| Loans
and advances |
|
18 |
45,428 |
35,341 |
|
| Deposits,
prepayments and other receivables |
19 |
39,266 |
23,595 |
|
| Cash
and bank balances |
|
2O |
4,325 |
2,611 |
|
|
|
---------------------- |
|
|
|
450,722 |
386,049 |
|
|
|
|
|
|
|
|
---------------------- |
|
|
645,764 |
553,073 |
|
|
|
====================== |
|
| IQBALALI
LAKHANI |
|
| Chairman
& Chief Executive |
|
|
| TASLEEMUDDIN
AHMED BATLAY |
|
| Director |
|
|
|
| Profit
& Loss Account |
|
|
FOR THE YEAR ENDED JUNE 30, 1996 |
|
|
|
|
|
|
|
1996 |
1995 |
|
|
|
NOTES |
(Rupees'000) |
|
|
|
|
|
|
|
|
| Sales |
|
|
2,727,448 |
2,629,577 |
|
| Cost
of sales |
|
21 |
2,405,598 |
2,339,759 |
|
|
|
|
---------------------- |
|
| Gross
profit |
|
|
321,850 |
289,818 |
|
|
|
|
|
|
|
| Establishment
expenses |
|
22 |
65,156 |
52,839 |
|
|
| Selling
and distribution expenses |
|
23 |
150,285 |
138,84o |
|
|
|
|
|
---------------------- |
|
|
| Operating
profit |
|
|
215,441 |
191,679 |
|
|
|
|
|
---------------------- |
|
|
|
|
106,409 |
98,139 |
|
|
|
|
|
| Other
income |
|
24 |
2,767 |
3,527 |
|
|
---------------------- |
|
|
|
|
109,176 |
101,666 |
|
|
|
|
|
| Financial
charges |
|
|
25 |
137,8O5 |
35,924 |
|
| Other
charges |
|
|
26 |
4,952 |
4,808 |
|
|
|
|
---------------------- |
|
|
|
|
42,757 |
40,732 |
|
|
|
---------------------- |
|
| Net
profit for the year |
|
66,419 |
60,934 |
|
|
|
|
|
| Taxation |
|
27 |
18,299 |
18,434 |
|
|
|
---------------------- |
|
| Net
profit after taxation |
|
|
48,120 |
42,500 |
|
|
|
|
|
| Unappropriated
profit brought forward |
|
36 |
27 |
|
|
|
---------------------- |
|
| Profit
available for appropriation |
|
48,156 |
42,527 |
|
|
|
|
|
| Appropriations: |
|
|
|
|
| Proposed dividend at 20% (1995: at 27%) |
|
16,092 |
21,725 |
|
| Transfer
to general reserve |
|
24,000 |
20,766 |
|
|
|
---------------------- |
|
|
|
|
40,092 |
42,491 |
|
|
|
|
|
|
|
|
|
|
|
|
|
---------------------- |
|
| Unappropriated
profit carried forward |
|
8,064 |
36 |
|
|
|
|
|
======================= |
|
|
|
|
|
|
|
| NOTE
:The annexed notes form an integral part of these accounts. |
|
|
|
|
| IQBALALI
LAKHANI |
|
| Chairman
& Chief Executive |
|
|
| TASLEEMUDDIN
AHMED BATLAY |
|
| Director |
|
|
|
|
| Karachi:
November 14, 1996 |
|
|
|
| Statement
of Sources & Application of Funds (Cash Flow Statement) |
|
|
|
|
FOR THE YEAR ENDED JUNE 30,1996 |
|
|
1996 |
1995 |
|
|
|
(Rupees'000) |
|
| CASH
FLOW FROM OPERATING ACTIVITIES |
|
|
|
|
| Net
profit for the year |
|
66,419 |
60,934 |
|
|
|
|
| Adjustments
for items not involving movement of funds |
|
|
| Depreciation |
|
19,047 |
16,978 |
|
|
| Profit
on sale of fixed assets |
|
(719) |
(1,235) |
|
|
|
|
---------------------- |
|
|
|
|
84,747 |
76,677 |
|
|
|
|
|
|
|
| (Increase)/Decrease
in current assets |
|
| Stores and spares |
|
(6,527) |
(11,829) |
|
| Stock in trade |
|
(30,361) |
18,143 |
|
| Trade debtors |
|
(313) |
(20,099) |
|
| Loans
and advances |
|
(3,535) |
(3,980) |
|
| Deposits,
prepayments and other receivables |
|
(15,671) |
(8,709) |
|
|
|
---------------------- |
|
|
(56,407) |
(26,474 |
|
| Increase/(Decrease)
in current liabilities |
|
|
|
|
| Creditors, accrued and other liabilities |
|
53,823 |
(15,691) |
|
|
|
---------------------- |
|
| Net
cash from operating activities |
|
|
|
| before tax |
|
82,163 |
34,512 |
|
|
| Taxes paid |
|
(25,043) |
(37,209 |
|
|
|
---------------------- |
|
| Net
cash from operating activities |
|
57,120 |
(2,697) |
|
|
|
|
|
|
