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Report Date : |
09.10.2012 |
IDENTIFICATION DETAILS
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Name : |
PHILIP MORRIS (PAKISTAN) LIMITED |
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Formerly Known As : |
LAKSON TOBACCO
COMPANY LIMITED |
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Registered Office : |
4th Floor, Bahria Complex-3, M.T. Khan Road, Karachi |
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Country : |
Pakistan |
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Financials (as on) : |
31.12.2011 |
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Date of Incorporation : |
10.02.1969 |
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Com. Reg. No.: |
0002832 |
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Legal Form : |
Public Limited Company |
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Line of Business : |
manufacture & sale of Cigarettes and Tobacco |
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No. of Employees : |
2,355 |
RATING & COMMENTS
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MIRA’s Rating : |
Ba |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
NOTES:
Any query related to this report can be made
on e-mail: infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – June 30th, 2012
|
Country Name |
Previous Rating (31.03.2012) |
Current Rating (30.06.2012) |
|
Pakistan |
B2 |
B2 |
|
Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
|
Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
pakistan - ECONOMIC OVERVIEW
Decades of
internal political disputes and low levels of foreign investment have led to
slow growth and underdevelopment in Pakistan. Agriculture accounts for more
than one-fifth of output and two-fifths of employment. Textiles account for
most of Pakistan's export earnings, and Pakistan's failure to expand a viable
export base for other manufactures has left the country vulnerable to shifts in
world demand. Official unemployment is 6%, but this fails to capture the true picture,
because much of the economy is informal and underemployment remains high. Over
the past few years, low growth and high inflation, led by a spurt in food
prices, have increased the amount of poverty - the UN Human Development Report
estimated poverty in 2011 at almost 50% of the population. Inflation has
worsened the situation, climbing from 7.7% in 2007 to more than 13% for 2011,
before declining to 9.3% at year-end. As a result of political and economic
instability, the Pakistani rupee has depreciated more than 40% since 2007. The
government agreed to an International Monetary Fund Standby Arrangement in
November 2008 in response to a balance of payments crisis. Although the economy
has stabilized since the crisis, it has failed to recover. Foreign investment
has not returned, due to investor concerns related to governance, energy,
security, and a slow-down in the global economy. Remittances from overseas
workers, averaging about $1 billion a month since March 2011, remain a bright
spot for Pakistan. However, after a small current account surplus in fiscal
year 2011 (July 2010/June 2011), Pakistan's current account turned to deficit
in the second half of 2011, spurred by higher prices for imported oil and lower
prices for exported cotton. Pakistan remains stuck in a low-income, low-growth
trap, with growth averaging 2.9% per year from 2008 to 2011. Pakistan must
address long standing issues related to government revenues and energy
production in order to spur the amount of economic growth that will be necessary
to employ its growing population. Other long term challenges include expanding
investment in education and healthcare, and reducing dependence on foreign
donors.
|
Source : CIA |
PHILIP MORRIS
(PAKISTAN) LIMITED
(FORMERLY: LAKSON
TOBACCO COMPANY LIMITED)
|
Registered
Address |
Factory Address |
|
4th Floor, Bahria Complex-3, M.T. Khan Road, Karachi, Pakistan |
(1)
E/15,
S.I.T.E., Kotri District Dadu, (Sindh) (2)
Plot No.
20, Sector No. 17 Korangi Industrial Area, Karachi. (3)
Quadirabad
District.Sahiwal. (4)
Village:
Mandra Tehsil Gujar Khan District. Rawalpindi (5)
Ismaila
District. Swabi |
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Tel # |
92 (21) 111-262-626, 35209600, 35209600 |
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Tel # |
92 (21) 35063481, 35063482 |
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Fax # |
92 (21) 35635391, 35684098 |
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Fax # |
92 (21) 35054331 |
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Email |
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|||
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a. |
Nature of Business |
Engaged in manufacture
& sale of Cigarettes and Tobacco |
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b. |
Year Established |
February 10, 1969 |
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c. |
Registration # |
0002832 |
A.F. Ferguson & Co.
(Chartered
Accountants)
The Company was incorporated in Pakistan on February 10, 1969 as a public limited company and its shares are quoted on the Karachi and Lahore Stock Exchanges.
|
Names |
Designation |
|
Mr. Arpad Konye Mr. Nicolas Floros Mr. Paul Norman Janelle Mr. David Charles Abbott Mr. Eunice Hamilton Mr. Mujtaba Hussain Mr. Asmer Naim |
Managing
Director Vice President
(Operations - Asia) Vice President
(Finance - Asia) Director (IS
& Planning) Vice President (Human
Resource - Asia) Company
Secretary & Financial Controller Director
(Government Relations) |
|
Categories |
Percentage (%) |
|
Directors, Chief
Executive Officers, and their spouse and minor children Associated Companies,
Undertakings and related parties Banks,
Development Financial Institutions, Non Banking Financial Institutions Insurance
Companies Modarabas and
Mutual Funds General Public Others |
0.00 97.65 0.35 0.03 0.00 1.80 0.17 |
Principal activity of the Company is manufacture and sale of cigarettes and tobacco.
Philip Morris International Inc holds around 97.62 percent shares of the Subject Company
2,355
Against an installed manufacturing capacity of 50,112 million (2010: 51,723 million) cigarettes, actual production was 22,440 million (2010: 27,186 million) cigarettes. Actual production was sufficient to meet the demand.
(1) The Royal Bank of Scotland, Pakistan.
(2) Citibank N.A., Pakistan.
(3) Habib Bank Limited, Pakistan.
(4) HSBC Bank Middle East Limited, Pakistan.
(5) MCB Bank Limited, Pakistan.
(6) National Bank of Pakistan, Pakistan.
(7) Standard Chartered Bank, Pakistan.
(8) United Bank Limited, Pakistan.
(9) Faysal Bank Limited, Pakistan.
(10) Soneri Bank Limited, Pakistan.
(11) Allied Bank Limited, Pakistan.
(12) Habib Metropolitan Bank Limited, Pakistan.
Sound
In 2011, the gross turnover decreased by 4.8% while gross profit
decreased by 28.4% resulting in a loss of Rs. 455 million after tax. This
year-on-year decline is primarily attributable to weaker sales by 4.0 billion
cigarettes, representing a 14.6% fall, due to the adverse impact of the non-tax
paid tobacco products and market share erosion. The non-tax paid tobacco brands
are increasingly damaging the Company, and the legitimate industry as a whole,
as excise tax-driven price increases provide the non-tax paid products with an
increasingly unfair competitive advantage. These results were further impacted
by adverse economic factors weighing on income per capita, pressure on
manufacturing costs and increases in tax and excise duty rates.
The Management of the Company has made a decision to reduce operations
in its mandra factory. The Mandra factory is the smallest of our manufacturing
facilities but has a substantially higher cost of production. This difficult
but necessary decision was taken following an extensive review of our cigarette
manufacturing operations and as part of our continuous effort to enhance
productivity and operational efficiency.
The Company continues to contribute substantially to the annual
government’s revenue. In 2011, the Company contributed Rs. 20.8 billion to the
national exchequer in the form of Federal Excise Duties, Custom Duties, Special
Excise Duties, Sales Tax & Income Tax, which represents a 4.6% decrease
compared to 2010. the government revenues are negatively affected by the
strength and growth of the non-tax paid market.
Management is focused to bring an overall improvement in all aspects of our operations. This is being achieved through innovative marketing, upgrading of plant and machinery to improve product quality, development of human capital and continued emphasis on cost control.
|
Currency |
Unit |
Pakistani Rupee |
|
US Dollar |
1 |
Rs. 95.30 |
|
UK Pound |
1 |
Rs. 153.10 |
|
Euro |
1 |
Rs. 123.30 |
The Company was incorporated in Pakistan on February 10, 1969 as a public limited company and its shares are quoted on the Karachi and Lahore stock exchanges. The principal activity of the company is the manufacture and sale of cigarettes and tobacco. The company has been very aggressive in its business activity throughout and has made very good progress and has become the biggest manufacturer of cigarettes in Pakistan. All its products enjoy good reputation and public acceptance.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.52.21 |
|
UK Pound |
1 |
Rs.84.00 |
|
Euro |
1 |
Rs.67.75 |
INFORMATION DETAILS
|
Report Prepared
by : |
MNL |
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest capability
for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
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NB |
New Business |
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This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a
composite of weighted scores obtained from each of the major sections of this
report. The assessed factors and their relative weights (as indicated through
%) are as follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.