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Financial Report on
British American
Tobacco
Year 2013
MuhammadTanvir Hossain : 13164042
SayedMohammadAminFaysal : 1316408...
Financial Accounting : 501 [FINANCIAL REPORT ON BRITISH AMERICAN TOBACCO]
2 | P a g e
Introduction:
This is a financial re...
Financial Accounting : 501 [FINANCIAL REPORT ON BRITISH AMERICAN TOBACCO]
3 | P a g e
Our Contribution
BAT Bangladeshisone...
Financial Accounting : 501 [FINANCIAL REPORT ON BRITISH AMERICAN TOBACCO]
4 | P a g e
Financial Statement For The Year 201...
Financial Accounting : 501 [FINANCIAL REPORT ON BRITISH AMERICAN TOBACCO]
5 | P a g e
British American Tobacco Bangladesh ...
Financial Accounting : 501 [FINANCIAL REPORT ON BRITISH AMERICAN TOBACCO]
6 | P a g e
An interim cash dividend of 100% i.e...
Financial Accounting : 501 [FINANCIAL REPORT ON BRITISH AMERICAN TOBACCO]
7 | P a g e
Balance at 1 January 2013 600,000 5,...
Financial Accounting : 501 [FINANCIAL REPORT ON BRITISH AMERICAN TOBACCO]
8 | P a g e
British American Tobacco Bangladesh
...
Financial Accounting : 501 [FINANCIAL REPORT ON BRITISH AMERICAN TOBACCO]
9 | P a g e
BritishAmerican Tobacco Bangladesh h...
Financial Accounting : 501 [FINANCIAL REPORT ON BRITISH AMERICAN TOBACCO]
10 | P a g e
hopes that the Government will rein...
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Assignment on BAT_Final

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Assignment on BAT_Final

  1. 1. Financial Report on British American Tobacco Year 2013 MuhammadTanvir Hossain : 13164042 SayedMohammadAminFaysal : 13164083 Md. Rajibul Haque : 13164096 Rossi NormanDias : 13164082 Kazi Mitul Mahmud : 12264047
  2. 2. Financial Accounting : 501 [FINANCIAL REPORT ON BRITISH AMERICAN TOBACCO] 2 | P a g e Introduction: This is a financial report based on British American Tobacco Bangladesh, which is a well-known tobacco company in the world. In this report the substance below will be analysed the financial performance in the year ending 2013. "British American Tobacco Bangladesh strongly believes that success and responsibility go hand in hand. As the largest private sector tax payer of the country, we are playing our part as a responsible corporate citizen" Arun Kaul, Managing Director. The Company: The presence of British American Tobacco in this part of the world can be traced back to 1910. Beginningthe journey asImperialTobacco101 yearsago, the Companyset up its first sales depot at ArmanitolainDhaka.Afterthe partition of Indiain1947, PakistanTobacco Companywas established in 1949. The first factory in Bangladesh (the then East Pakistan) was setup in 1949 at Fauzdarhat in Chittagong. In 1965, the second factory of Pakistan Tobacco Company went into production in Mohakhali, Dhaka.Thereafteritbecame BangladeshTobacco CompanyLimitedin1972 immediately after Bangladesh's independence. In 1998, the Company changed its name and identity to British American Tobacco Bangladesh ("BAT Bangladesh") aligning the corporate identity with other operating companies in the British American Tobacco Group. BAT Bangladeshisa part of BAT plc,the world's most international tobacco group, with brands sold in 180 markets around the world. We make high quality tobacco products for the diverse preferencesof consumers,spanningthe business'from crop to consumer' and we are committed to embedding the principles of corporate social responsibility Groupwide. Our Shareholders We were amongthe first companies to be listed on the Dhaka and Chittagong Stock Exchanges and currently rankedamongstthe top 10 companies in terms of market capitalisation. British American Tobacco Group holds 65.91% of our shares; 17.52% is owned by Investment Corporation of Bangladesh;ShadharanBima Corporation, Bangladesh Development Bank Limited, Government of People's Republic of Bangladesh, Sena Kallyan Sangstha own 4.71% and a further 11.86% is owned by other shareholders. Our Portfolio of Products Our success comes from satisfying informed adult smokers. We manufacture and market high quality and well established international cigarette brands as well as local brands. The brand portfolioof BATBangladeshcurrently consistsof Benson&Hedges,JohnPlayer Gold Leaf, Pall Mall, Capstan, Star, Scissors, Bristol, Pilot and Hollywood . Our Operations We grow our tobacco leaves through our registered farmers in Kushtia, Chittagong, Manikganj and Rangpur zones. Both our Head Office and Cigarette Manufacturing Plant are located in Mohakhali, Dhaka. We have one Green Leaf Threshing Plant in Kushtia and a Redrying Plant in Manikganj. Our People – Our Strength BAT Bangladesh employs more than 1,200 people directly and about 50,000 people indirectly as farmers,distributorsandlocal suppliers.We take greatpride insayingthat BAT Bangladesh is one of the most preferred employers in the country. It is our pool of talented people who bring their difference everyday and make BAT Bangladesh a great place to work for all of us.
  3. 3. Financial Accounting : 501 [FINANCIAL REPORT ON BRITISH AMERICAN TOBACCO] 3 | P a g e Our Contribution BAT Bangladeshisone of the largestmultinational companies in Bangladesh. Consequently, we are alsoone of the largestprivate sectortax payersinthe formof Supplementary DutyandValue Added Tax. Over time, we have successfully established ourselves as the company contributing to economic, social and human resource development. Financial Report 2013: It is a pleasure and privilege on the part of the Board of Directors to place herewith the Directors' Report and Auditors' Report together with the audited financial statements of British American Tobacco Bangladesh Company Limited for the year ended 31 December 2013 before the Shareholders of the Company. Key Strategic Pillars Throughout 2013 your Company continued to focus on the key strategic pillars of Growth, Productivity, Responsibility and Winning Organisation as enablers to deliver the desired business resultsforthe financial year.Thisreportpresentsdiscussions onthe salientfeaturesandactivitiesof the business under each pillar and then highlights the financial performance of your Company. Growth Industry Outlook Despite considerable macroeconomic challenges in 2013, the cigarette industry witnessed a moderate growthof around20% inthe year.But the volume growthisexpectedto decline in future due to yearon year price increase over inflation with the tax on biri remaining at the same level in the last fewyears'budget.LowSegmentgrowthcontinuedandMediumSegment declined steadily. The High segment showed some signs of recovery, but post mid-year tax-led price increase, the Premiumsegmentcame underheavypressure and no sign of growth momentum was visible in the segment.Going forward, the different segments in the industry will continue this trend under the prevailing market conditions. 0 5 10 15 20 25 30 35 40 45 2009 2010 2011 2012 2013 Leaf Export Earnings in million USD
  4. 4. Financial Accounting : 501 [FINANCIAL REPORT ON BRITISH AMERICAN TOBACCO] 4 | P a g e Financial Statement For The Year 2013: The key operating and financial data for the year 2013 along with immediate preceding two years are presented below: British American Tobacco Bangladesh Company Limited Statement of Financial Position as 31 December 2013 Description 2011 2012 2013 Taka '000s Taka '000s Taka '000s ASSETS Non-CurrentAssets: Property,Plantandequipment 5,376,634.00 5,861,627.00 5,619,130.50 CurrentAssets: Inventories 5,373,033.00 4,956,887.00 5,164,960.00 Trade & Otherreceivables 973,825.00 937,873.00 955,849.00 Advance, Depositandprepayments 590,164.00 1,007,539.00 798,851.50 Cash and Cashequivalents 837,393.00 2,270,567.00 1,553,980.00 Total currents assets 7,774,415.00 9,172,866.00 8,473,640.50 Total assets 13,151,049.00 15,034,493.00 14,092,771.00 EQUITY AND LIABILITIES Shareholder'sequity: Share capital 600,000.00 600,000.00 600,000.00 Capital reserve 64,896.00 64,896.00 64,896.00 Revenue reserve 5,246,404.00 6,368,044.00 5,807,224.00 Total equity 5,911,300.00 7,032,940.00 6,472,120.00 Non-currentliabilities: Gratuity 252,089.00 240,592.00 246,340.50 Deferredtax liability 669,079.00 723,643.00 696,361.00 Obligationunderfinancelease 17,876.00 7,541.00 12,708.50 (due after oneyear) Total non-currentliabilities 939,044.00 971,776.00 955,410.00 Current liabilities: Provisionforexpenses 1,838,021.00 2,188,035.00 2,013,028.00 Trade and otherpayables 3,467,716.00 3,245,676.00 3,356,696.00 Provisionforcorporate Tax 977,943.00 1,585,731.00 1,281,837.00 Obligationunderfinancelease 17,025.00 10,335.00 13,680.00 (due after one year) Total current liabilities 6,300,705.00 7,029,777.00 6,665,241.00 Total equityand liabilities 13,151,049.00 15,034,493.00 14,092,771.00
  5. 5. Financial Accounting : 501 [FINANCIAL REPORT ON BRITISH AMERICAN TOBACCO] 5 | P a g e British American Tobacco Bangladesh Company Limited Statement of Comprehensive Income For the year ended 31 December 2013 Description 2011 2012 2013 Taka '000s Taka '000s Taka '000s Gross Turnover 75,357,351.00 90,174,080.00 95,180,572.83 Supplementary duty&VAT 52,088,490.00 62,702,736.00 57,395,613.00 Net turnover 23,268,861.00 27,471,344.00 37,784,959.83 Cost of Sales 13,455,535.00 15,946,224.00 14,700,879.50 Gross Profit 9,813,326.00 11,525,120.00 23,084,080.33 Operatingexpenses 4,567,237.00 4,612,418.00 4,589,827.50 Operating profit 5,246,089.00 6,912,702.00 18,494,252.83 Otherincome 36,868.00 50,820.00 43,844.00 NetFinancial income /(expense) (110,687.00) (119,878.00) (115,283.00) 5,172,270.00 6,843,644.00 18,422,813.83 Workers' profitparticipation fund 258,614.00 342,182.00 300,398.00 Profitbefore income tax 4,913,656.00 6,501,462.00 18,122,415.83 Income tax expense Currenttax 2,211,975.00 2,505,258.00 2,340,099.19 Deferredtax 151,090.00 54,564.00 102,827.00 2,363,065.00 2,559,822.00 2,442,926.19 Profit for the year 2,550,591.00 3,941,640.00 15,679,489.64 Othercomprehensiveincome - - - Total comprehensive income forthe year 2,550,591.00 3,941,640.00 15,679,489.64 Taka Taka Taka EarningsPer Share 42.51 65.69 261.32
  6. 6. Financial Accounting : 501 [FINANCIAL REPORT ON BRITISH AMERICAN TOBACCO] 6 | P a g e An interim cash dividend of 100% i.e. Tk. 10 (ten) per share amounting to Tk 600,000,000 was paid in November 2013. In view of the performance of the Company and the current cash position, the Board now recommends a final cash Dividend of 400% i.e Tk. 40 (forty) per share amounting to Tk. 2,400,000,000 for the year 2013, to be approved in the 41th Annual General Meeting of the Company. Inclusive of the 100% interim dividend paid already, the total Cash Dividendof the Company, accordingly,would standat 500% for the year 2013. After approval of the above mentioned proposed final dividend, the summary of the total dividend paid in 2013 is represented below: British American Tobacco Bangladesh Company Limited Statement of changes in Equity for the year ended 31 December 2013 Description Share Revenue Capital Capital reserve reserve Total Taka '000s Taka '000s Taka '000s Taka '000s Balance at 1 January 2011 600,000 5,575,813 64,896 6,240,709 Dividendpaidin2011 2,880,000 2,880,000 Final Dividendfor2010 2,580,000 2,580,000 InterimDividendfor2011 300,000 300,000 Total comprehensiveincome forthe year 2,550,591 2,550,591 Balance as at 31 December2011 600,000 5,246,404 64,896 5,911,300 Balance at 1 January 2012 600,000 5,246,404 64,896 5,911,300 Dividendpaidin2012 2,820,000 2,820,000 Final Dividendfor2011 2,220,000 2,220,000 InterimDividendfor2012 600,000 600,000 Total comprehensiveincome forthe year 3,941,640 3,941,640 Balance as at 31 December2012 600,000 6,368,044 64,896 7,032,940
  7. 7. Financial Accounting : 501 [FINANCIAL REPORT ON BRITISH AMERICAN TOBACCO] 7 | P a g e Balance at 1 January 2013 600,000 5,411,109 64,896 6,076,005 Dividendpaidin2013 2850000 2850000 Final Dividendfor2012 2,400,000 2,400,000 InterimDividendfor2013 450,000.0 450,000 Total comprehensiveincome forthe year 15,679,490 15,679,490 Balance as at 31 December2013 600,000 18,240,599 64,896 18,905,495
  8. 8. Financial Accounting : 501 [FINANCIAL REPORT ON BRITISH AMERICAN TOBACCO] 8 | P a g e British American Tobacco Bangladesh Company Limited Statement of cash flow for the year ended 31 December 2013 2011 2012 2013 Cash flowsfrom Operating activities; Collectionfromdistributors,leaf export& others 90,283,106.00 74,950,453.00 82,616,779.50 Paymentforcost & expense (21,590,921.00) (17,794,614.00) (19,692,767.50) Supplementaryduty&Vatpaid (61,324,848.00) (52,099,969.00) (56,712,408.50) Cash generatedfrom operation 7,367,337.00 5,055,870.00 6,211,603.50 Income tax paid (1,897,470.00) (1,880,970.00) (1,889,220.00) Interestpaid (119,878.00) (110,687.00) (115,282.50) Netcash flowsfrom operatingactivities 5,349,989.00 3,064,213.00 4,207,101.00 Cash flowsfrom Investing activities; Acquisitionof plant,property& equipment (1,116,245.00) (707,823.00) (912,034.00) Proceedsfromsalesof plant, property & equipment 30,145.00 27,686.00 28,915.50 Netcash usedin investingactivities (1,086,100.00) (680,137.00) (883,118.50) Cash flowsfrom Financing activities; Finance lease obligation (17,025.00) (17,085.00) (17,055.00) Dividendpaid (2,813,690.00) (2,873,451.00) (2,843,570.50) Netcash usedin financingactivities (2,830,715.00) (2,890,536.00) (2,860,625.50)
  9. 9. Financial Accounting : 501 [FINANCIAL REPORT ON BRITISH AMERICAN TOBACCO] 9 | P a g e BritishAmerican Tobacco Bangladesh has cash and cash equivalents at the end of the year 2013 Tk. 155 corers, which is 93% more than year 2012. Grossturnover for the year 2013: Gross Turnoveraverage of (2011+2012) 82,765,715.50 20% increase 12,414,857.33 95,180,572.83 Profit after income tax: 2011 2012 2,013.00 Profitbefore income tax 4,913,656 6,501,462 5,707,559.00 Percentage of Tax 45% 38% 0.41 CurrentTax 2,211,975 2,505,258 2,340,099.19 Profitafterincome tax 2,701,681 3,996,204 3,367,459.81 BritishAmericanTobaccoBangladeshcontinuestocontribute 2/3rd of the total tax collections from the cigarette industry. In 2013, the Company contributed BDT 6,698 corers as supplementary duty, value addedtax and othertaxes.Thisrepresents an increase of BDT 1,107 corers. The Company will continue tosupportGovernment proposals that establish a sustainable level of tax contribution to the National Exchequer while ensuring a sustainable growth for the industry. In the National Budget for 2012-2013, the Corporate Tax rate for a cigarette manufacturer listed in Stock Exchange was increased from 27.5% to 35%. Along with this increase, 10% rebate for paying more than 20% dividendswaswithdrawn.Asaresult, applicableCorporate Tax rate forthe Company has increasedfrom24.75% to 35%. The Companyacknowledges the Government’s revenue growth targets to support the momentum of a growing and expanding economy and it has been working with National Board of Revenue (NBR) over the years to ensure sustainable revenue growth from cigarette industryinthe form of indirecttax.However,the Companystronglyfeels that by targeting the Corporate Tax structure of cigarette manufacturer listed in the Stock Exchange, Government’s gain is minimal. Rather, it significantly impacts the shareholders’ return (which includes the Government of Bangladesh), discourages the Company to declare high dividends, and takes away the incentive forothertobaccocompaniestobe listedinthe stockexchange. The Company strongly Netincrease /(decrease) incash& cash equivalentforthe year 1,433,174.00 (506,460.00) 463,357.00 Cash & cash equivalentatthe beginningof the year 837,393.00 1,343,853.00 1,090,623.00 Cash& cash equivalentsat the endof the year 2,270,567.00 837,393.00 1,553,980.00
  10. 10. Financial Accounting : 501 [FINANCIAL REPORT ON BRITISH AMERICAN TOBACCO] 10 | P a g e hopes that the Government will reinstate the 10% tax rebate for paying more than 20% dividends when considering the upcoming National Budget. Conclusion: The Company grew its gross turnover to BDT 9,518 corers, up by BDT 501 corers from the previous year. This increase was driven by volume growth and tax-led price increases. Profit before tax decreased by 38% from BDT 650 corers last year to BDT 570 corers in 2013. The higher profit before tax reflects higher volumes, better brand mix and increased price, as well as cost savings and productivity initiatives driven across the Company. There is no significant variance between the quarterly and the annual financial performance of your Company for the year 2013. Furthermore, there isno extra-ordinary gainorloss in 2013. The notes to the annual financial statements explain the variations against the previous year.

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