Acknowledgement

Acknowledgement
Pakistan Tobacco Company | Final Project
Pakistan Tobacco Company
Pakistan Tobacco Company Limited (PTC) is a part of British American

Tobacco - the world's most international tobacco group - with brands sold in
180 markets around the world. Pakistan Tobacco's operations in Pakistan
began in 1947, making it one of Pakistan's first foreign investments.
The company produces high quality tobacco products to meet the diverse
preferences of millions of consumers, and it works in all areas of the business
- from seed to smoke.
The company provides a number of reputed brands of cigarettes to
consumers in Pakistan, including Benson and Hedges, Embassy, Gold Flake,
Capstan and Gold Leaf.
Vision
Like a lighthouse in a dark, stormy sea... Our vision serves as

a beacon of light and hope, helping us navigates the waters
Mission Statement
Transform PTC to perform responsibly with the speed,

flexibility and enterprising spirit of an innovative, consumer
focused Company
Strategic Objectives
Our strategy reflects our vision of being the champions of

Growth, Productivity, Responsibility and a Winning
Organisation
Companys Brands
We have always considered ourselves a consumer focused company.

We aim to offer a product that excels in all aspects and exceeds the
expectations of our consumers
Pakistan Tobacco Company invests in trying to understand the consumers
preferences and ensures that adult smokers make informed choices about different
brands available in the market. We have put in particular effort in promoting two of
our Global Drive Brands, Dunhill and Pall Mall; and two of our great value for money
brands, John Player Gold Leaf and Gold Flake.
Dunhill
Dunhill, a premium global brand, celebrated its centenary in 2007.
2008 was an exceptional year for Dunhill in Pakistan as the brand witnessed
exponential growth; fuelled by its re-launch in July. Going forward, Dunhill is poised
to strengthen its foothold in the premium segment.
Benson & Hedges

In 1873, Richard Benson & William Hedges started a partnership in London.
Benson & Hedges was launched in Pakistan in March 2003 and has since been able
to build strong brand loyalty among its consumers showing excellent year on year
growth.
Gold Leaf
The story of John Player Gold Leaf has to start from the story of its founder, John
Player. An enterprising businessman, John Player started a small tobacco selling
business in 1877 and turned it into a thriving cigarette company, John Player and
Sons.
John Player Gold Leaf has become an institution in itself, becoming one of the most
recognisable cigarette brands in the country. John Player Gold Leaf has recently
been declared the largest Urban Brand in Pakistan, beating out products across the
F.M.C.G. spectrum.
Capstan
Capstan has a rich heritage, originating in Britain in the 19th century. The brand
was created under the auspices of W.D. & H.O. WILLS at Bristol and London.
Gold Flake
Gold Flake, like many of our brands, also boasts its origins at W.D. & H.O. WILLS
where it was a premium brand around the end of the 19th century. Launched in
1982, in 'soft cup' packaging, the brand took off when it was repositioned in the
Value For Money (VFM) segment and later a 'hinge lid' variant was introduced in
2000.
Gold Flake has grown tremendously as a brand since 2004, making it the largest
volume brand in Pakistan, and the second largest brand in British American
Tobacco's Asia Pacific region. The key to Gold Flakes success has been its novel
engagement schemes which have fuelled growth over the years. Through consumer
relevant initiatives, Gold Flake has established itself as a fresh and modern offering
in the VFM segment and is all set to consolidate its position as the major volume
driver for Pakistan Tobacco Company.
Embassy
Embassy, is a leading volume brand in Pakistan, and is most popular in Punjab
where it enjoys a leading position. Having built its heritage over a number of years,
Embassy thrives on its brand loyalty and locally tailored taste characteristics.
Financial Highlights
Gross Turn Over
Year
2004
2005
2006
2007
2008
2009
Gross Turnover
25,453 Million Rupees
Financial Highlights
Property Plant and Equipment (Fixed Assets)
Years
2004
2005
2006
2007
2008
Property Plant and Equipment

3,564
3,798
4,529
5,154
5,600
Million
Million
Million
Million
Million
Rupees
Rupees
Rupees
Rupees
Rupees
2009
Earnings per Share and Dividend Yield
Year
2004
2005
2006
2007
2008
2009
Earnings
2.60/Share
5.17/Share
7.46/Share
9.47/Share
9.91/Share
11.83/Share
Dividend Yield
3.25%
5.37%
7.64%
6.37%
9.08%
9.10%
Gross Volume
Year
2004
2005
2006
2007
2008
2009
Volume
27 Billion
31 Billion
35 Billion
37 Billion
41 Billion
41 Billion
Gross Profit
Operating Profit
After Tax Profit
3,483 Million
1,077 Million 665 Million
4530 Million
2,081 Million 1,322 Million
5534 Million
6516 Million
7277 Million
8224 Million
Profit
9000
8000
7000
6000
5000
Gross Profit
Operating Profit
Million Rupees
Profit after Tax

4000
3000
2000
1000
0
2004
2005
2006
2007
2008
2009
Years
10
F
inancial Analysis 2004-2005
Balance Sheet (Horizontal Analysis)
ITEMS
2004
2005
Horizontal Analysis
NON CURRENT
ASSETS
Property plant and
3,564,407 4,529,366
4529366 - 3564407
Equipment
3564407
Investment in
5,000
5,000
5000 5000 5000
Subsidiary Company
Long term Loans
16,324
17,782
17782 16324 16324
Long Term Deposits
4,433
11,365
27.07%
--8.93%
11365 4433 4433
156.3%
22.99%
(76.82%)
1.24%
CURRENT
ASSETS
131,464
125,232
Trade Debts
12,486
2,894
3780931 3074052
3074052
125232 131464
131464
2894 12486 12486
Loans and Advances
32,273
32,676
32676 32273 32273
Short term Payments
36,003
31,987
31987 36003 36003 (11.15%)
119,126
104,791
39,197
57,605
104791 119126
(12.03%)
119126
57605 39197 39197
46.96
Stock in Trade
Stores and Spares
Other Receivables
Cash and Bank
3,074,052 3,780,931
Total Current Assets
3,434,601 4,136,116
Total Assets
7,024,765 7,968,453
(4.70%)
4136116 3434601
3434601
7968453 7024765
7024765
20.42%
13.43%
11
Balance Sheet
ITEMS
2004
2005
Horizontal Analysis
SHARE CAPITAL AND

RESERVES
Share Capital
Revenue Reserves
2,554,93 2,554,938
8
707,885 1,084,456
2554938 2554938
2554938
1084456 707885
707885
--53.19%
NON CURRENT
LIABILITIES
Retirement Benefits
Deferred Taxation
---
---
---
---
624,475
724,673
724673 624475
624475
16.04%
2515824 2056298
2056298
10911 5041 5041
22.34%
116.44%
400662 996579
996579
(59.79%
)
CURRENT
LIABILITIES
Trade and other
payables
Accrued Interest
2,056,29 2,515,824
8
5,041
10,911
Short term running

finance
996,579
400,662
Income tax liability
79,549
676,969
676969 79549 79549 75.10%
Total Current
Liabilities
3,137,46 3,604,366
7
3604366 3137467
3137467
14.88%
Total Liabilities
7,024,76 7,968,453
5
7968453 7024765
7024765
13.43%
12
Profit and Loss Account
ITEMS
2004
2005
Gross turnover
25,452,634 30,615,062
Excise Duties
12,466,912 14,758,558
Sales Tax
3,413,146 4,103,324
Net Sales
9,572,576 11,753,180
Cost of Sales
6,089,955 7,223,576
Gross Profit
3,482,621 4,529,604
Selling and
distribution
1,442,356 1,578,656
Horizontal Analysis
30615062 25452634
25452634
14758558 12446912
12446912
4103324 3413146
3416146
11753180 9572576
9572576
7223576 6089955
6089955
4529604 3482621
3482621
1578656 1442356
1442356
20.28%
18.57%
20.20%
22.77%
18.61%
30.06%
9.44%
595,637
573,285
Other Operating
Income
14,590
8,100
8100 14590 14590
(44.48
%)
Other Operating
Expense
381,914
304,462
304462 381914 381914
(20.27
%)
93.19%
20.16%
Administrative
Expenses
Operating Profit
Finance Income
Finance Cost
Profit Before Tax
Income Tax
Expense
Profit of the Year
1,077,304 2,081,301
573285 595637 595637 (3.75%)
---
26,317
2081301 1077304
1077304
---
21,265
25,554
25554 21265 21265
1,056,039 2,082,064
390,812
665,227
760,145
100
2082064 1056039
97.15%
1056039
760145 390812 390812 94.50%
1,321,919 1321919 665227 665227 98.77%
13
Financial Analysis 20042005
Balance Sheet (Vertical Analysis)
ITEMS
2004
2005
Vertical Analysis
NON CURRENT
ASSETS
Property plant and
3,564,407 4,529,366
Equipment
Investment in
5,000
5,000
Subsidiary Company
Long term Loans
16,324
17,782
Long Term Deposits
4,433
11,365
4529366 7968453
56.84%
5000 7968453
0.006%
17782 7968453
0.22%
11365 7968453
0.14%
3780931 7968453
47.57%
CURRENT
ASSETS
Stock in Trade
3,074,052 3,780,931
131,464
125,232
125232 7968453
1.57%
Trade Debts
12,486
2,894
2894 7968453
0.03%
Loans and Advances
32,273
32,676
32676 7968453
0.41%
Short term Payments
36,003
31,987
31987 7968453
0.40%
119,126
104,791
104791 7968453
1.31%
39,197
57,605
57605 7968453
0.72%
Stores and Spares
Other Receivables
Cash and Bank
3,434,601 4,136,116
4136116 7968453
51.90%
Total Assets
7,024,765 7,968,453
7968453 7968453
100%
14
Balance Sheet
ITEMS
2004
2005
Vertical Analysis
SHARE CAPITAL AND

RESERVES
Share Capital
Revenue Reserves
2,554,93 2,554,938
8
707,885 1,084,456
2554938 7968453
32.06%
1084456 7968453
13.62%
NON CURRENT
LIABILITIES
Retirement Benefits
Deferred Taxation
---
---
---
---
624,475
724,673
724673 7968453
9.09%
2515824 7968453
31.57%
10911 7968453
0.13%
CURRENT
LIABILITIES
Trade and other
payables
Accrued Interest
2,056,29 2,515,824
8
5,041
10,911
Short term running

finance
996,579
400,662
400662 7968453
5.03%
79,549
676,969
676969 7968453
8.49%
Total Current
Liabilities
3,137,46 3,604,366
7
3604366 7968453
45.26%
Total Liabilities
7,024,76 7,968,453
5
7968453 7968453
100%
15
ITEMS
2004
2005
Vertical Analysis
Gross turnover
25,452,634 30,615,062
30615062 11753180
Excise Duties
12,466,912 14,758,558
14758558 11753180
Sales Tax
3,413,146 4,103,324
4103324 11753180
260.48
%
125.57
%
34.91%
Net Sales
9,572,576 11,753,180
11753180 11753180
100%
Cost of Sales
6,089,955 7,223,576
7223576 11753180
61.46%
Gross Profit
3,482,621 4,529,604
4529604 11753180
62.70%
Selling and
distribution
1,442,356 1,578,656
1578656 11753180
13.43%
595,637
573,285
573285 11753180
4.8%
Other Operating
Income
14,590
8,100
8100 11753180
0.06%
Other Operating
Expense
381,914
304,462
304462 11753180
2.59%
2081301 11753180
17.70%
Administrative
Expenses
Operating Profit
Finance Income
Finance Cost
Profit Before Tax
Income Tax
Expense
Profit of the Year
1,077,304 2,081,301
---
26,317
---
0.22%
21,265
25,554
25554 11753180
0.21%
2082064 11753180
17.71%
1,056,039 2,082,064
390,812
760,145
760145 11753180
6.46%
665,227
1,321,919
1321919 11753180
11.24%
16
Financial Analysis 2005-2006
Balance Sheet
ITEMS
2005
2006
Horizontal
Analysis
Vertical
Analysis
NON CURRENT ASSETS

Property plant and
Equipment
Investment in Subsidiary
Company
Long term Loans
4,529,3 4,529,36
66
6
5,000
5,000
19.25
51.86
---
0.006
17,782 18,660
4.94
0.21
Long Term Deposits and

Payments
11,365
(25.88)
0.10
0.26
43.40
11.80
1.60
(16.86)
0.03
8,424
CURRENT ASSETS
Stock in Trade
Stores and Spares
Trade Debts
3,780,9 3,690,89
31
3
125,232 140,008
2,894
2,406
Loans and Advances
32,676 12,205
(62.65)
0.14
Short term Payments
31,987 72,235
125.83
0.83
104,791 92,360
(11.86)
1.06
Cash and Bank Balances
57,605 62,883
9.16
0.72
4,136,1 4,172,95
16
0
7,968,4 8,734,40
0.89
47.78
9.61
100
Other Receivables
Total Assets
17
53
Balance Sheet
ITEMS
2005
2006
Horizontal
Analysis
Vertical
Analysis
---
29.25
46.08
18.14
---
---
16.60
9.67
Trade and other payables 2,515,8 2,212,24

24
1
Accrued Interest
10,911 11,115
(12.07)
25.23
1.87
0.13
Short term running

finance
400,662 1,293,11
4
222.75
14.81
676,969 233,712
(65.48)
2.68
SHARE CAPITAL AND

RESERVES
Share Capital
Revenue Reserves
2,554,9 2,554,93
38
8
1,084,4 1,584,24
56
9
NON CURRENT
LIABILITIES
Retirement Benefits
Deferred Taxation
---
---
724,673 845,004
CURRENT LIABILITIES
18
Total Current liability
3,604,3 3,750,20
66
9
4.05
42.94
Total Liabilities
7,024,7 8,734,40
65
0
9.61
100
ITEMS
2005
2006
Horizontal
Analysis
Vertical
Analysis
Gross turnover
30,615,062
35,715,451
16.66
---
Excise Duties
14,758,558
16,991,172
15.13
---
Sales Tax
4,103,324
4,833,285
17.79
---
Net Sales
11,753,180
13,890,994
18.19
100
Cost of Sales
7,223,576
8,357,747
15.70
60.16
Gross Profit
4,529,604
5,533,520
22.16
39.84
Selling and
distribution
Administrative
Expenses
1,578,656
1,816,198
15.05
13.07
573,285
644,981
12.75
4.64
Other Operating
Income
8,100
20,686
155.38
0.15
Other Operating
Expense
304,462
251,932
(17.25)
1.81
Operating Profit
2,081,301
2,841,095
36.51
20.45
Finance Income
26,317
47,402
80.12
0.34
19
25,554
27,824
8.88
0.20
Profit Before Tax
2,082,064
2,860,673
37.40
20.59
Income Tax
Expense
Profit of the Year
760,145
955,685
25.72
6.88
1,321,919
1,904,988
44.11
13.74
Finance Cost
Balance Sheet
ITEMS
2006
2007
Horizontal
Analysis
Vertical
Analysis
4,529,3 5,154,32
66
6
5,000
5,000
13.80
52.45
---
0.05
18,660 12,513
(32.94)
0.13
54.62
0.13
5.47
40.69
0.55
1.43
(0.83)
0.02
216.10
0.39
NON CURRENT ASSETS

Property plant and
Equipment
Company
Long term Loans
Payments
8,424
13,025
CURRENT ASSETS
Stock in Trade
Stores and Spares
Trade Debts
Loans and Advances
3,690,8 3,998,18
93
1
140,008 140,777
2,406
2,386
12,205 38,580
20
Short term Payments
72,235 64,887
(10.17)
0.66
Other Receivables
92,360 229,891
148.91
2.34
62,883 166,666
165.04
1.70
4,172,9 4,641,36
50
8
8,734,4 9,826,23
00
2
11.23
47.23
12.50
100
Total Assets
Balance Sheet
ITEMS
2006
2007
Horizontal
Analysis
Vertical
Analysis
---
26.00
(27.43)
11.70
100
4.98
(4.25)
8.23
60.39
36.11
SHARE CAPITAL AND

RESERVES
Share Capital
Revenue Reserves
2,554,93 2,554,93
8
8
1,584,24 1,149,74
9
2
NON CURRENT
LIABILITIES
Retirement Benefits
Deferred Taxation
---
1,149,74
2
845,004 809,109
CURRENT
LIABILITIES
Trade and other
payables
2,212,24 3,548,23
1
7
21
11,115
Accrued Interest
8,401
(24.42)
0.09
Short term running

finance
1,293,11 1,038,55
4
0
(19.69)
10.57
233,712 227,752
(2.55)
2.32
Total Current liabilities 3,750,20 4,822,94

9
0
28.60
49.08
8,734,40 9,826,23
0
2
12.50
100
Total Liabilities
ITEMS
2006
2007
Horizontal
Analysis
Vertical
Analysis
Gross turnover
35,715,451
40,889,275
14.49
--
Excise Duties
16,991,172
19,311,946
13.66
--
Sales Tax
4,833,285
5,534,452
14.51
--
Net Sales
13,890,994
16,042,877
15.49
100
Cost of Sales
8,357,747
9,527,306
14.00
59.39
Gross Profit
5,533,520
6,515,571
17.75
40.61
Selling and
distribution
Administrative
Expenses
1,816,198
1,795,793
(1.12)
11.19
644,981
736,147
14.13
4.59
20,686
71,756
246.88
0.45
Other Operating
Income
22
Other Operating
Expense
251,932
335,763
33.28
2.09
Operating Profit
2,841,095
3,719,624
30.92
23.19
Finance Income
47,402
30,878
(34.86)
0.19
Finance Cost
27,824
25,928
(6.81)
0.16
Profit Before Tax
2,860,673
3,724,574
30.20
23.22
Income Tax
Expense
Profit of the Year
955,685
1,304,367
36.49
8.13
1,904,988
2,420,207
27.05
15.09
Balance Sheet
ITEMS
2007
2008
Horizontal
Analysis
Vertical
Analysis
8.64
53.87
---
0.05
NON CURRENT ASSETS

Property plant and
Equipment
Company
Long term Loans
5,154,3 5,599,75
26
8
5,000
5,000
12,513
9,244
(26.12)
0.09

Payments
13,025
41,172
216.10
0.40
CURRENT ASSETS
23
Stock in Trade
Stores and Spares
3,998,1 4,059,06
81
3
140,777 190,646
1.52
39.05
35.42
1.83
2,386
2,666
11.74
0.03
Loans and Advances
38,580
65,917
70.86
0.63
Short term Payments
64,887 105,728
62.94
1.02
Other Receivables
229,891 246,675
7.30
2.37
166,666 69,172
(58.50)
0.67
4,641,3 4,739,86
68
7
9,826,2 10,395,0
32
41
2.12
45.60
5.79
100
Trade Debts
Total Assets
Balance Sheet
ITEMS
2007
2008
Horizontal
Analysis
Vertical
Analysis
SHARE CAPITAL AND

RESERVES
Share Capital
2,554,93 2,554,93
8
8
---
24.58
Revenue Reserves
1,149,74 1,053,39
2
3
(8.38)
10.13
1,149,74 739,133
2
51.00
7.11
NON CURRENT
LIABILITIES
Retirement Benefits
24
Deferred Taxation
809,109 836,939
3.44
8.05
3,548,23 4,324,70
7
4
21.88
41.60
23.25
0.10
(44.88)
5.51
CURRENT LIABILITIES
Trade and other payables
8,401
Accrued Interest
10,354
Short term running finance 1,038,55 572,397

0
227,752 303,183
33.12
2.92
Total Current Liability
4,822,94 5,210,63
0
8
8.04
50.13
Total Liabilities
9,826,23 10,395,0
2
41
5.79
100
ITEMS
2007
2008
Horizontal
Analysis
Vertical
Analysis
Gross turnover
40,889,275
49,053,928
19.97
--
Excise Duties
19,311,946
23,351,734
20.92
--
Sales Tax
5,534,452
6,829,699
23.40
--
Net Sales
16,042,877
18,872,495
17.64
100
Cost of Sales
9,527,306
11,595,736
21.71
61.44
Gross Profit
6,515,571
7,276,759
11.68
38.56
25
1,795,793
1,933,364
7.66
10.24
736,147
928,358
26.11
4.92
Other Operating
Income
71,756
60,551
(15.62)
0.32
Other Operating
Expense
335,763
615,458
83.30
3.26
Operating Profit
3,719,624
3,860,130
3.78
20.45
Finance Income
30,878
59,600
93.02
0.32
Finance Cost
25,928
26,013
0.33
0.14
Profit Before Tax
3,724,574
3,893,717
4.54
20.63
Income Tax
Expense
Profit of the Year
1,304,367
1,361,422
4.37
7.21
2,420,207
2,532,295
4.63
13.42
Selling and
distribution
Administrative
Expenses
Balance Sheet
ITEMS
2008
2009
Horizontal
Analysis
Vertical
Analysis
6.29
48.68
NON CURRENT ASSETS

Property plant and
Equipment
5,599,75 5,952,10
8
8
26
Company
Long term Loans
5,000
5,000
0.04
9,244
7,310
(20.92)
0.06

Payments
41,172
19,915
(51.63)
0.16
42.04
47.15
14.54
1.79
CURRENT ASSETS
4,059,06 5,765,36
3
7
190,646 218,375
Stock in Trade
Stores and Spares
2,666
1,684
(36.83)
0.01
Loans and Advances
65,917
48,598
(26.27)
0.40
Short term Payments
105,728
72,483
(31.44)
0.59
Other Receivables
246,675
88,147
(64.27)
0.72
69,172
47,874
(30.79)
0.39
31.70
51.06
17.62
100
Trade Debts
4,739,86 6,242,52
7
8
10,395,0 12,226,8
41
61

Total Assets
Balance Sheet
ITEMS
2008
2009
Horizontal
Analysis
Vertical Analysis
---
20.90
SHARE CAPITAL
AND RESERVES
Share Capital
2,554,93 2,554,93
8
8
27
1,053,39 1,705,29
3
6
61.89
13.95
Retirement Benefits
739,133
(100)
0.00
Deferred Taxation
836,939 1,109,84
7
32.61
9.08
Trade and other

payables
Accrued Interest
4,324,70 5,037,46
4
9
10,354 27,659
16.48
41.20
167.13
0.23
Short term running

finance
572,397 1,300,83
7
127.26
10.64
303,183 490,815
61.89
4.01
Total Current
Liability
5,210,63 6,856,78
8
0
31.59
56.08
Total Liability
10,395,0 12,226,8
41
61
17.62
100
Revenue Reserves
NON CURRENT
LIABILITIES
---
CURRENT
LIABILITIES
ITEMS
Gross
turnover
Excise Duties
2008
2009
Horizontal
Analysis
Vertical
Analysis
49,053,928
57,544,309
17.31
--
23,351,734
27,654,345
18.43
--
28
Sales Tax
6,829,699
8,223,439
20.41
--
Net Sales
18,872,495
21,666,525
14.80
100
Cost of Sales
11,595,736
13,442,066
15.92
62.04
Gross Profit
7,276,759
8,224,459
13.02
37.96
Selling and
distribution
Administrativ
e Expenses
1,933,364
2,246,014
16.17
10.37
928,358
1,100,814
18.58
5.08
Other
Operating
Income
Other
Operating
Expense
Operating
Profit
Finance
Income
Finance Cost
60,551
226,499
274.06
1.05
615,458
514,665
(16.38)
2.38
3,860,130
4,589,465
18.89
21.18
59,600
102,826
72.53
0.47
26,013
43,802
68.39
0.20
3,893,717
4,648,489
19.38
21.45
1,361,422
1,626,083
19.44
7.51
2,532,295
3,022,406
19.35
13.95
Profit Before
Tax
Income Tax
Expense
Profit of the
Year
Balance Sheet
29
ITEMS
2009
2010
Horizontal
Analysis
Vertical
Analysis
(4.5)
39.58
---
0.03
NON CURRENT ASSETS

Property plant and
Equipment
Company
Long term Loans
Payments
5,952,10 5,680,29
8
6
5,000
5000
7,310
4170
(42.9)
0.02
19,915
29,721
49.2
0.20
25.83
50.55
14.31
1.73
CURRENT ASSETS
Stock in Trade
Stores and Spares
5,765,36 7,255,00
7
7
218,375 249,632
1,684
1,554
(7.71)
0.01
Loans and Advances
48,598
68,559
41.07
0.47
Short term Payments
72,483
135,267
86.61
0.94
Other Receivables
88,147
124,896
41.69
0.87
47,874
56,910
18.87
0.39
26.45
55.01
17.72
100
Trade Debts

Total Assets
6,242,52 7,893,82
8
5
12,226,8 14,349,4
61
73
Balance Sheet
30
ITEMS
2009
2010
Horizontal
Analysis
Vertical
Analysis
---
17.80
(22.94)
9.15
---
---
1,109,84 1,113,83
7
3
0.35
7.76
5,037,46 5,815,86
9
7
27,659 53,648
15.45
40.53
93.96
0.37
Short term running 1,300,83 2,561,36

finance
7
2
96.90
17.84
SHARE CAPITAL
AND RESERVES
Share Capital
Revenue Reserves
2,554,93 2,554,93
8
8
1,705,29 1,313,95
6
5
NON CURRENT
LIABILITIES
Retirement Benefits
Deferred Taxation
---
---
CURRENT
LIABILITIES
Trade and other
payables
Accrued Interest
490,815 199,409
(59.37)
0.13
Total Current
Liability
6,856,78 8,630,28
0
6
25.86
60.14
Total Liability
12,226,8 14,349,4
61
73
17.36
100

31
ITEMS
2009
2010
Horizontal
Analysis
Vertical
Analysis
57,544,309
44,458,074
(22.74)
283.24
27,654,345
22,347,073
(19.9)
142.37
Sales Tax
8,223,439
6,414,894
(21.99)
40.86
Net Sales
21,666,525
15,696,107
(27.25)
100
Cost of Sales
13,442,066
10,789,048
(19.73)
68.73
Gross Profit
8,224,459
4,907,059
(40.33)
31.26
Selling and
distribution
Administrativ
e Expenses
2,246,014
2,007,158
(10.63)
12.78
1,100,814
943,256
(14.31)
6.00
Other
Operating
Income
Other
Operating
Expense
Operating
Profit
Finance
Income
Finance Cost
226,499
158,253
(30.13)
1.00
514,665
24,193
(95.29)
0.15
4,589,465
1,822,585
(60.28)
11.61
102,826
34,669
(66.28)
0.22
43,802
101,415
131.5
0.64
4,648,489
1,755,839
(62.22)
11.18
1,626,083
614,218
(62.22)
3.91
3,022,406
1,141,621
(62.22)
7.2
Gross
turnover
Excise Duties
Profit Before
Tax
Income Tax
Expense
Profit of the
Year
32
Ratio Analysis 2005-2010
Liquidity Ratios
1.
Current Ratio
Years
2.
Current Assets
Current Liabilities
Current Ratio
2004
3,434,601
3,137,467
1.094
2005
4,136,116
3,604,366
1.147
2006
4,172,950
3,750,209
1.112
2007
4,641,368
4,822,940
0.962
2008
4,739,867
5,210,638
0.909
2009
6,242,528
6,856,780
0.910
2010
7,893,825
8,630,286
0.914
Quick Ratio
Years
Quick Assets
Current Liabilities
Quick Ratio
2004
3,60,549
3,137,467
0.1149
2005
3,55,185
3,604,366
0.098
2006
3,82,097
3,750,209
0.101
2007
6,43,187
4,822,940
0.133
2008
6,80,804
5,210,638
0.130
2009
4,77,161
6,856,780
0.069
2010
6,38,818
8,630,286
0.074
Liquidity Ratios
3.
Inventory Turnover
33
Years
4.
Cost of Sales
Average Inventory
Inventory Turnover
2004
6,089,955
3,069,090
1.98
2005
7,223,576
3,427,491
2.10
2006
8,357,474
3,785,892
2.20
2007
9,527,306
3,894,517
2.44
2008
11,595,736
4,028,622
2.87
2009
13,442,066
4,972,215
2.70
2010
10,789,048
6,510,187
1.67
Average Account Receivables Turnover
Years
Credit Sales
Average A/R
A/R Turnover
2004
9,572,576
1,05,266
90.93
2005
11,753,180
1,11,958
104.97
2006
13,890,994
98,575
140.91
2007
16,042,877
1,61,125
99.56
2008
18,872,495
2,38,282
117.15
2009
21,666,525
1,67,411
129.41
2010
15,696,107
1,06,521
147.34
Profitability Ratios
1
Assets Turnover
Years
Sales
Average Total Assets Assets Turnover

34
2004
9,572,576
6,641,792
1.45
2005
11,753,180
7,496,609
1.56
2006
13,890,994
8,351,426
1.66
2007
16,042,877
9,280,316
1.78
2008
18,872,495
10,110,636
1.86
2009
21,666,525
11,310,951
1.91
2010
15,696,107
12,964,936
1.21
Profit Margin
Years
Sales
Cost of Goods Sold
Profit Margin
2004
9,572,576
6,089,955
36.38 %
2005
11,753,180
7,223,576
38.53 %
2006
13,890,994
8,357,474
39.83 %
2007
16,042,877
9,527,306
40.61 %
2008
18,872,495
11,595,736
38.55 %
2009
21,666,525
13,442,066
37.95 %
2010
15,696,107
10,789,048
31.27%
3
Return on Assets
Years
2004
Net Income
665,227
Average Total Assets Return on Assets

6,641,792
0.10
35
2005
1,321,919
7,496,609
0.17
2006
1,904,988
8,351,426
0.22
2007
2,420,207
9,280,316
0.26
2008
2,532,295
10,110,636
0.25
2009
3,022,406
11,310,951
0.27
2010
1,141,621
12,964,936
0.80
Return on Common Stockholders Equity
Years
Net Income
Average Stock
Holders Equity
Return on Stock
holders Equity
2004
665,227
3,262,823
0.20
2005
1,321,919
3,451,118
0.38
2006
1,904,988
3,889,300
0.48
2007
2,420,207
4,081,022
0.59
2008
2,532,295
3,656,505
0.69
2009
3,022,406
3,934,282
0.76
2010
1,141,621
4,065,563
0.28
5
Earnings per Share

Years
Net Income
Average Shares
Outstanding
Earnings per Share
2004
665,227
2,55,494
2.60
2005
1,321,919
2,55,494
5.17
2006
1,904,988
2,55,494
7.46
36
2007
2,420,207
2,55494
9.47
2008
2,532,295
2,55,494
9.91
2009
3,022,406
2,55,494
11.83
2010
1,141,621
2,55,494
4.47
Payout Ratios
Years
Dividends per
Share
Earnings per Share
Payout Ratio
2004
1.61
2.60
0.61
2005
3.69
5.17
0.71
2006
5.48
7.46
0.73
2007
7.88
9.47
0.83
2008
11.62
9.91
1.17
2009
9.53
11.83
0.80
2010
5.99
4.47
1.34
7
Price Earnings Ratio
Years
Market Price of
Share
Earnings per Share Price Earnings Ratio
2004
2.60
2005
5.17
2006
7.46
2007
9.47
37
2008
9.91
2009
11.83
2010
4.47
Solvency Ratios
1
Debt to Assets Ratio
Years
Total Debts
Total Assets
Debt to Assets Ratio
2004
1,896,686
7,024,765
0.27
2005
2,916,486
7,968,453
0.33
2006
3,505,382
8,734,400
0.40
2007
4,586,767
9,826,232
0.46
2008
4,897,101
10,395,041
0.47
2009
6,338,306
12,226,861
0.51
38
2010
8,377,229
13,613,012
0.61
Times Interest Earned
Years
Operating Income
Interest Expense Times Interest Earned
2004
1,056,039
390,812
2.70
2005
2,082,064
760,145
2.73
2006
2,860,673
955,685
2.99
2007
3,724,574
1,304,367
2.85
2008
3,893,717
1,361,422
2.86
2009
4,648,489
1,626,083
2.85
2010
1,755,839
614,218
2.85
Interpretation of Analysis
Liquidity Ratios
The analysis of Pakistan Tobacco Companys financial statement shows that

it has a high tendency to pay its debts and to convert assets into liquid form
within short intervals of time.
1
The current ratio of PTC remained between 0.90 1.14 in the last six
years and it shows its ability to pay short term liabilities.
Current Ratio=
Current Assets
Current Liabilities
39
The quick ratio of PTC ranged between 0.069 0.133 from 2005 to
2010. It shows the companys ability to convert its current assets into
liquid form (cash form) in order to meet current liabilities.
Quick Ratio=
Current AssetsInventory
Current Liabilities
On yearly basis from the year 2005 2010, we observed that the
number of times the total inventory or stock of the company was sold
on the average of 2.25 times/year. It shows the sales of the company
are on a very large scale and also gives rise to the company
opportunity to generate huge profits in the long run.
Inventory T urnover=
Cost of Sales
Average Inventory
Average Account Receivables Turnover shows that how many times a

company is able to recover the amount of credit sales to people. PTC
has shown a high Accounts Receivables turnover rate which shows its
high liquidity transformation rate.
Accounts Recieveables Turnover=
Credit Sales
Average Accounts Recieveables
Pakistan Tobacco Companies Profitability ratios clearly reflect its great

ability to generate huge profits and of generating dividends for its
shareholders.
5
Average Assets turnover of the company ranges between 1.21 - 1.91

times per year. It shows the generation of huge sales from the worth of
assets of the company and in the case of Pakistan Tobacco Company, it
shows the firm's efficiency at using its assets in generating sales or
revenue - the higher the number the better.
40
Assets Turnover=
The profit margin of PTC lies between 31.27% - 40.61% in previous six
years. It measures the percentage of each dollars of sales that results
in net income. A higher profit margin indicates a more profitable
company that has better control over its costs compared to its
competitors.
Profit Margin=
Net Sales
Cost of Goods Sold
The return on assets of PTC ranges among 0.80 to 0.27 according to

preceding six years record. An overall measure of profitability is return
on assets. ROA gives an idea as to how efficient management is at
using its assets to generate earnings. This number tells you what the
company can do with what it has, i.e. how many rupees of earnings
they derive from each rupee of assets they control.
Assets Turnover=
Net Sales
Average Total Assets
Net Income
Average Total Assets
Return on common stockholders equity of PTC varies between 0.28

0.76 between the years 2005 to 2006. Another widely used profitability
ratio is return on common stockholders equity. It measures profitability
from common stockholders point of view. Return on equity measures
a corporation's profitability by revealing how much profit a company
generates with the money shareholders have invested. Averaging ROE
over the past 5-10 years can give you a better idea of the historical
growth.
Return on comon stock holders Equity=
Net Income
AverageStock Holders Equity
Earnings per share are a measure of net income earned on each share
of common stock. PTCs earning per share of last six years lies among
4.47 - 11.83. The EPS formula does not include preferred dividends for
41
categories outside of continued operations and net income. Earnings

per share serve as an indicator of a company's profitability.
Earnings per Share=
10
Net Income
Average shares Outstandin g
Payout ratio of this company ranges from 0.8 - 1.34. It measures the
percentage of earnings distributed in the form of cash dividends. The
amount of earnings paid out in dividends to shareholders. Investors
can use the payout ratio to determine what companies are doing with
their earnings. Dividend payout ratio is the fraction of net income a
firm pays to its stockholders in dividend.
Payout Ratio=
11
Dividend per Share

Earnings per Share
Price earnings ratio is an oft-quoted measure of the ratio of the market

price of each share of common stock to the earnings per share. It is
also called its "P/E", or simply "multiple". The P/E ratio is a vital ratio
for investors. Basically, it gives us an indication of the confidence that
investors have in the future prosperity of the business. A P/E ratio of 1
shows very little confidence in that business whereas a P/E ratio of 20
expresses a great deal of optimism about the future of a business. It is
the valuation ratio of a company's current share price compared to its
per-share earnings.
Price Earning Ratio=
Market Price of Share

Earnings per Share
SOLVENCY RATIOS
42
Solvency ratios measure the ability of a company to survive over a long

period of time. It provides a measurement of how likely a company will be to
continue meeting its debt obligations. Different countries use different
methodologies to calculate the solvency ratio, and have different
requirements.
1
Debt to total assets ratio measures the percentage of total assets that
creditors provide. A metric used to measure a company's financial risk
by determining how much of the company's assets have been financed
by debt. If the ratio is less than one, most of the company's assets are
financed through equity. If the ratio is greater than one, most of the
company's assets are financed through debt. Calculated by adding
short-term and long-term debt and then dividing by the company's
total assets.
Debt Asset Ratio=
Total Debts
Total Assets
The average value of Times interest earned of PTC is approximately 2.8

for previous six years. IT PROVIDES COMPANYS ABILITY TO MEET
interest payments as they come due. Times interest earned
(TIE) or interest coverage ratio is a measure of a company's ability to
honour its debt payments. The times interest earned lets the creditor
understand whether or not a company has sufficient income to cover
its interest payments requirements. It is calculated by taking a
company's earnings before interest and taxes (EBIT) and dividing it by
the total interest payable on bonds and other contractual debt.
Interest Earned =
Opera t ing Income

Interst Expenses
43
44

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Acknowledgement

Pakistan Tobacco Company | Final Project

Pakistan Tobacco Company

Pakistan Tobacco Company Limited (PTC) is a part of British American

Like a lighthouse in a dark, stormy sea... Our vision serves as

Transform PTC to perform responsibly with the speed,

Our strategy reflects our vision of being the champions of

We have always considered ourselves a consumer focused company.

Benson & Hedges

Pakistan Tobacco Company | Final Project

Pakistan Tobacco Company | Final Project

Gross Turn Over

Pakistan Tobacco Company | Final Project

Property Plant and Equipment (Fixed Assets)

Property Plant and Equipment

Pakistan Tobacco Company | Final Project

5,952 Million Rupees

Earnings per Share and Dividend Yield

Pakistan Tobacco Company | Final Project

Pakistan Tobacco Company | Final Project

Pakistan Tobacco Company | Final Project

Profit after Tax

inancial Analysis 2004-2005

Balance Sheet (Horizontal Analysis)

11365 4433 4433

Loans and Advances

32676 32273 32273

Short term Payments

31987 36003 36003 (11.15%)

Total Current Assets

Pakistan Tobacco Company | Final Project

SHARE CAPITAL AND

Short term running

Income tax liability

676969 79549 79549 75.10%

Pakistan Tobacco Company | Final Project

Profit and Loss Account

8100 14590 14590

304462 381914 381914

573285 595637 595637 (3.75%)

25554 21265 21265

1,321,919 1321919 665227 665227 98.77%

Pakistan Tobacco Company | Final Project

Financial Analysis 20042005

Balance Sheet (Vertical Analysis)

Loans and Advances

Short term Payments

Stores and Spares

Pakistan Tobacco Company | Final Project

SHARE CAPITAL AND

Short term running

Income tax liability

Pakistan Tobacco Company | Final Project

Profit and Loss Account

Pakistan Tobacco Company | Final Project

Financial Analysis 2005-2006

NON CURRENT ASSETS

Long Term Deposits and

Loans and Advances

Short term Payments

Cash and Bank Balances

Total Current Assets

Pakistan Tobacco Company | Final Project

Trade and other payables 2,515,8 2,212,24