Khyber Tobacco Company Limited 1 st ANNUAL CORPORATE

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Khyber Tobacco Company Limited 1 st ANNUAL CORPORATE BRIEFING SESSION FOR THE YEAR ENDED

Khyber Tobacco Company Limited 1 st ANNUAL CORPORATE BRIEFING SESSION FOR THE YEAR ENDED JUNE 30, 2019 1

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SEQUENCE OF PRESENTATION COMPANY PROFILE CORPORATE VALUES COMPANY’S FINANCIAL PERFORMANCE REVIEW OF BUSINESS ENVIRONMENT

SEQUENCE OF PRESENTATION COMPANY PROFILE CORPORATE VALUES COMPANY’S FINANCIAL PERFORMANCE REVIEW OF BUSINESS ENVIRONMENT 2019 OPERATIONAL HIGHLIGHTES CONTRIBUTION TO NATIONAL EXCHEQUER FUTURE OUTLOOK / CHALLENGES 4

COMPANY’S PROFILE 5

COMPANY’S PROFILE 5

COMPANY’S PROFILE 6

COMPANY’S PROFILE 6

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COMPANY’S FINANCIAL PERFORMANCE 8

COMPANY’S FINANCIAL PERFORMANCE 8

COMPANY’S FINANCIAL PERFORMANCE 9

COMPANY’S FINANCIAL PERFORMANCE 9

COMPANY’S FINANCIAL PERFORMANCE 10

COMPANY’S FINANCIAL PERFORMANCE 10

COMPANY’S FINANCIAL PERFORMANCE 11

COMPANY’S FINANCIAL PERFORMANCE 11

COMPANY’S FINANCIAL PERFORMANCE 12

COMPANY’S FINANCIAL PERFORMANCE 12

EARNING PER SHARE AFTER TAX 13

EARNING PER SHARE AFTER TAX 13

COMPANY’S FINANCIAL PERFORMANCE 14

COMPANY’S FINANCIAL PERFORMANCE 14

PRICE EARNING RATIO (PERCENTAGE) 40. 00 20. 00 - 17. 27 2016 25. 31

PRICE EARNING RATIO (PERCENTAGE) 40. 00 20. 00 - 17. 27 2016 25. 31 24. 05 2017 2018 2019 (20. 00) (40. 00) (60. 00) (80. 00) (100. 00) (120. 00) (140. 00) (125. 63) 15

RETURN ON EQUITY (PERCENTAGE) 16

RETURN ON EQUITY (PERCENTAGE) 16

FINANCIAL POSITION HISTORICAL FINANCIAL INFORMATION 17

FINANCIAL POSITION HISTORICAL FINANCIAL INFORMATION 17

CASH FLOWS HISTORICAL FINANCIAL INFORMATION 18

CASH FLOWS HISTORICAL FINANCIAL INFORMATION 18

RATIO ANALYSIS 19

RATIO ANALYSIS 19

PATTERN OF SHAREHOLDING 20

PATTERN OF SHAREHOLDING 20

REVIEW OF BUSINESS ENVIRONMENT 2019 � � � Increase in Federal Excise Duty of

REVIEW OF BUSINESS ENVIRONMENT 2019 � � � Increase in Federal Excise Duty of Cigarette from Rs. 8560/Carton to Rs. 16500/Carton in three stages. FED @ Rs. 300/kg levied on Tobacco which was later renounced by the government back to Rs. 10/kg by the end of the year. With change in government regime FY 2019 started with relatively imbalanced market dynamics. The Country witnessed one of the worst Rupee devaluation during 2019 while interest rates also increased sharply, negatively impacting operating cost and profitability margins of the Company. The increase in prices of Electricity, Gas, and Diesel along with increase in minimum wage has also increased the cost of production. 21

OPERATIONAL HIGHLIGHTS Production and Sales overview � � � The company re-dried 1. 6

OPERATIONAL HIGHLIGHTS Production and Sales overview � � � The company re-dried 1. 6 million Kgs tobacco at its Green Leaf Threshing plant. Local sale of re-dried tobacco has increased to 1. 42 M Kgs in the year 2019. An increase in local sale is mainly attributed to the extensive marketing of FCV resulting into increased local sales and export sales. 22

OPERATIONAL HIGHLIGHTS � � � Export of re-dried tobacco has been the main component

OPERATIONAL HIGHLIGHTS � � � Export of re-dried tobacco has been the main component of company's export revenue. Previously Company’s exports had stopped due to low demand of Pakistani Tobacco in the International Market and the problem of Non Tobacco Related Material (NTRM). Management of the company focused on local sales of cigarettes and succeeded quite a lot in their endeavours to recover from the effects of low sales during the first half of the year and the inability to pass the increase of duties and taxes due to fierce market competition. The loss during the first 6 months is mainly attributable to the production of counterfeit cigarettes of our high performing brands by illicit counterfeit manufacturers. Net sales of Rs. 1. 07 Billion during the period under review as compared to Net Sales of Rs. 1. 13 Billion last year. Management is continuously endeavouring to expand its local market by adding new customers to its existing customer base. 23

CONTRIBUTION TO NATIONAL EXCHEQUER � The Company in the year-2019 contributed an amount of

CONTRIBUTION TO NATIONAL EXCHEQUER � The Company in the year-2019 contributed an amount of Rs. 1. 3 bn aprox. in the form of Federal Excise Duty, Sales tax, Income tax, and federal and provincial Levies. 24

HISTORICAL PRODUCTION AND SALES DATA 25

HISTORICAL PRODUCTION AND SALES DATA 25

FUTURE OUTLOOK/ CHALLENGES � � � KTCL has expanded its business geographically and hence

FUTURE OUTLOOK/ CHALLENGES � � � KTCL has expanded its business geographically and hence established growth opportunities in local market as well as the international market. KTCL intends to upgrade its cigarette manufacturing facility and equipment to new modern technologies with an intent to drastically improve quality of output. Market is highly price sensitive, instability caused due to radical changes in the duty/price structure create various challenges for the Company. Rising costs of raw materials and utilities are constantly increasing which the company intends to neutralize by increasing efficiency. Tobacco Export orders are in pipeline and have become a regular feature of our revenue stream for now and also for the foreseeable future. It can also become a valuable source for earning foreign exchange for the country considering its potential for export. 26

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Q & A SESSION 31

Q & A SESSION 31

D N E E TH 32

D N E E TH 32