Growing with resilience

Presented by:
Faizan Ahmed 11845
Shoaib Lalani 11541
Aakash Kumar 11723
Rohit Chawla 11503




Table of Contents
Mission Statement ...................................................................................................................... 1
'ision Statement ......................................................................................................................... 1
PTC Strategic Objectives ............................................................................................................ 1
Executive Summary: ................................................................................................................... 1
Overview oI the Company .......................................................................................................... 2
History .................................................................................................................................... 2
Brands .................................................................................................................................... 3
Market Structure ..................................................................................................................... 4
Trend Analysis 2008-2010 .......................................................................................................... 5
Liquidity Ratios: ..................................................................................................................... 5
Current ratio: ....................................................................................................................... 5
Quick ratio: ......................................................................................................................... 5
Leverage Ratios: ..................................................................................................................... 6
Total debt to total assets ratio: ............................................................................................. 6
Time interest earned: ........................................................................................................... 6
ProIitability Ratios: ................................................................................................................. 6
ProIit on Margin: ................................................................................................................. 6
Return on Asset (ROA): ...................................................................................................... 7
Return on Equity (ROE): ..................................................................................................... 7




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sson Statement
TransIorm PTC t o per Ior m wit h t he s pe e d,
I l e xi bi l i t y a nd e nt er pr i s i ng spi r it o I a n
i nno vat i ve, consumer - Io cused co mpa ny a nd
lo ng t er m vi s io n o I beco mi ng 'Fi r st c hoi ce
Ior everyone
son Statement
'First Choice Ior everyone
PTC StrategU Ub|eUtbes
Their strategy reIlects their vision oI being the champions oI Growth, Productivity, responsibility
and Winning organization.
ecutive Summaiy:
Pakistan Tobacco Company is the Iirst-multinational company oI Pakistan and recently
completed 54 years oI its operations in the country. The company is the member oI the
multinational British American Tobacco group, which employs over 100,000 people, operates in
180 countries and is one oI the top 5 FMCG trade-marketing companies in the world.
PTC was incorporated in Pakistan and is listed on the three stock exchanges oI the country. It
was established in the same year when Pakistan came into being in 1947, and took over the
business oI Imperial Tobacco Company (India). In 1975 a new cigarette Iactory was set up at
Akora Khattak to meet the increasing demand. Akora Khattak Iactory is now one oI the largest
Iactories oI N.W.F.P.
Pakistan Tobacco Company is part oI the British American Tobacco Group, one oI the world's
most international business groups. In more than 100 years oI British American Tobacco`s
existence, the Group oI companies has traded through the turbulence oI wars, revolutions and
nationalizations - as well as all the controversy surrounding smoking.
From agrarian practices to scientiIic methods oI curing, high end industrial production, and an
evolved trade marketing and distribution network, the process oI converting raw tobacco into a
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marketable product involves a complete understanding oI the process and conIidence in our
people to deliver.
From a single Iactory operation to a completely vertically integrated company which is involved
in every aspect oI cigarette production i.e. Irom crop to consumer`, we have evolved into one oI
the leading corporations in Pakistan. We revel in our instrumental role in the development oI the
country, and continue to support and contribute to the communities that we work with.
In this section, you will Iind the diIIerent roles we play throughout the extensive production
process.
Uberbew of tbe Company


Hstory

From being the Iirst multinational to set up its business in Pakistan in 1947 and beginning
operations out oI a warehouse near Karachi Port, we have come a long way.
From being just a single Iactory operation to a company which is involved in every aspect oI
cigarette production, Irom tobacco cultivation to packaging PTC has evolved and grown with
Pakistan. However, what is signiIicant about these IiIty-seven years is the eIIort that PTC has
demonstrated in the development oI the country. By being instrumental in the campaign Ior
modern agricultural and industrial practices, we have helped in the development and progress oI
the agricultural & industrial sector in the country.
We have been supporting & contributing to various causes oI national interest. Educating
growers in the latest techniques and technology in agriculture, Iorestation and Iree health care in
designated areas are but a Iew examples.
Through these IiIty-seven years, PTC`s continuous investment in people, brands, technology,
innovation and the communities in which we operate has borne Iruit in many ways and to
mention just a Iew; we are deemed as a partner oI choice by many, our Environmental, Health &
SaIety standards are a source oI inspiration Ior local companies, our Industrial Relations
practices have led and inIluenced local practices, and as a result oI all these, our managers are
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highly valued and sought aIter people in the Pakistani corporate world based on the training and
exposure we give them Irom very early on in their careers.

rands

BENSON & HEDGES
In 1873, Richard Benson & William Hedges started a partnership in London. From the very start,
the idea was to make Benson & Hedges a style statement, which is why the business started Irom
London`s Iashionable West End.
PTC launched Benson & Hedges in Pakistan in March 2003. Made with the Iinest handpicked
golden 'irginia tobacco Irom across three continents, the brand is packed with perIection to seal
its Ireshness.

1OHN PLAYER GOLD LEAF
The story oI John Player Gold LeaI has to start Irom the story oI its Iounder, 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.

CAPSTAN
Capstan has a rich heritage, originating in Britain in the 19th century. The brand was created
under the auspices oI W.D. & H.O. WILLS at Bristol and London.

GOLD FLAKE
Gold Flake, like many oI their brands, also boasts its origins at W.D. & H.O. WILLS where it
was a premium brand around the end oI the 19th century. Launched in 1982, in a 'soIt cup'
packaging, the brand took oII when it was repositioned in the value Ior money segment and later
a 'hinge lid' variant was introduced in 2000.

WILLS
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WILLS takes its name Irom the heritage oI one oI the original Imperial Tobacco Company
Iamilies: the Wills Brothers oI London.

EMBASSY
Embassy, the third leading volume brand in Pakistan, is most popular in the Punjab where it
enjoys a leading position due to its equity and loyalty.
arket StruUture
Pakistan Tobacco Company enjoys a DUOPOLY with Philip Morris International` Iormerly
known as Lakson Tobacco`. Major brands giving a competition are:
O Morven Gold
O Marlboro
O Diplomat
O K2
O Red & White




















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Trend Analyss 8-

Liquidity Ratios
2008 2009 2010
Current ratio 0.91 0.91 0.85
Quick ratio 0.09 0.04 0.04
Leverage ratios

Total debt to total asset
ratio
0.65 0.65 0.70
Time interest earned 148.39x 104.77x 10.22x
EBITDA 171.26x 119.77x 15.21x
Funded debt to net
working capital
-3.34 -1.74 -1.00
Profitability ratio


Profit on Margin 5.16 5.25 1.54
Return on Asset 25.05 26.72 7.52
Return On Equity 70.18 70.94 25.68

iquiuity Ratios:

Current rato:
This ratio indicates the company has more current liabilities than current assets. In the year 2008
and 2009 the current ratio was constant at 0.91x. While in 2010, current ratio decreased to 0.85x.
Reason Ior low current ratio is the higher stock-in-trade (merchandise inventory)

QuUk rato:
In the year 2008 and 2009 the quick ratio decreased Irom 0.09x to 0.04x.While in 2010, quick
ratio remain constant at 0.04x.the reason Ior low quick ratio is the higher short-term borrowing.
This show they can`t meet its short-term debt obligations. PTC would have to sell inventory to
meet its obligations.
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Leberage Ratos:

Total debt to total assets rato:
In the year 2008 and 2009 the debt to asset ratio was constant at 65. While in 2010, debt to
asset ratio increased by 20. The 2008 & 2009 ratio oI 65 means that creditors have provided
65 oI the company's Iinancing Ior its assets and the stockholders have provided 35. In 2010,
ratio oI 70 means that creditors have provided 70 oI the company's Iinancing Ior its assets
and the stockholders have provided 30.The reason Ior high debt to asset ratio in 2010 is due to
account payable and accrued interest.
Tme nterest earned:
TIE has Iallen oII somewhat overtime. In 2008 TIE was 148.39x. While, in 2009 the TIE
decreased to 104.77x because oI ?? . But in 2010 the TIE oI PTC decreased to 10.22x.
A lower times interest earned ratio shows Iewer earnings are available to meet interest
payments. Failing to meet these obligations could Iorce a company into bankruptcy. Whenever,
the debt to assets ratio is high, times interest earned ratio is low since the business has a lot oI
debt.
Profitability Ratios:
roft on argn:
In 2008, the proIit on margin was 5.16 and in 2009 it increased slightly to 5.25. The increase in
proIit on margin in 2009 is because they reduced their other operating expenses. Due to heavy
increase on duties in 2010 their gross proIit decreased as well as because oI increase in selling
and administrative expenses (which were more than 50 oI the gross proIit) their proIit on
margin declined to 1.54 in 2010.
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Return on Asset {RUA]:
In 2008, return on assets was 25.05. While in 2009it increased to almost 27 because oI increased
in the net income as well as increased in inventories, plant and assets, and stores and spares. In
2010 the return on asset decreased to 7.52 because oI huge decrease in their net income as well
as increase in inventories and short term pre - payments.
Return on Equty {RUE]:
In 2008 ROE was 70.18 but it slightly increased to 70.94 in 2009 due to increase in proIit on
margin and revenue reserves, while in 2010 the ROE decreased to 25.68 due to decrease in net
income and revenue reserves.