Instructor

Sir Talha Majeed

Group Participants:
 Arbaz Khan
 Usama Rafique
 Rana Ahmed
 Uzair Mubarak
 Haider Ali
 Gohar Arshad
 Hassan Sidique
 COMPANY’S INTRODUCTION:
Khyber Tobacco Company:
Khyber Tobacco Company (KTC) A public limited company is renowned in tobacco and cigarette
industry from last 5 decades. Khyber tobacco has achieved the heights of business with its clear
and ambitious vision, high quality and vigilant team and enjoying the status of top few
companies of Pakistan in tobacco industry. The company has extended its operation around the
world with an established distribution network in parts of Eastern Europe, South and West
Africa, Central and South Asia and the Middle East.

With internationally recognized brands, a fully integrated production facility, and a wealth of
experience and expertise KTC is in an ideal position to provide leaf and blended tobaccos. We
have high quality brands, private label cigarettes, filter-rod and other non-tobacco materials in
our portfolio. Our team of industry experts aim to introduce well researched brands after
rigorous testing and blending of tobaccos from around the world to give the customer
distinctively valuable experience. KTC has a strong foothold in its native country with a modern
fully integrated production facility aimed at export quality brands and a vast and well
established sales and distribution network.

Brands of KTC:
With internationally recognized brands, a fully integrated production facility and a wealth of
experience and expertise KTC is in an ideal position to provide leaf and blended tobacco. We
have good quality brands, private label cigarettes, filter-rods and other non-tobacco material in
our portfolio. Our team of industry experts aim to introduce well researched brands after
rigorous testing and blending of tobacco from around the world to give the customer
distinctively valuable experience. KTC has a strong foothold in its native country with a modern
fully integrated production facility aimed at export quality brands and a vast and well
established sales and distribution network.
Requirement#1:
You start with analyzing the previous financial statements of the company.
Looking at the sales figure for the last five years you analyze the growth at
which the company sales are growing.
Requirement#2:
Following the sales growth rate in the last five years at least, calculate the
projected sales of the next three years by adding up the percentage of the new
product sales as per your expectations.
Requirement#3:
Using the percentage growth in sales method, prepare the proforma
income statement of the company for the next three years. 
Requirement#4:

Calculate the operating cash flows of the company.

Requirement#5:
Suppose the initial investment requires for the project is about Rs.
200 million. Calculate the NPV, IRR, Payback period considering the
operating cash flows for the next three years. Rate of return is 20%.

Initial Investment:

NPV:

IRR:
IRR -1%

Pay Back Period:

Requirement#6:
Using the same approach also prepares the projected balance
sheet of the company for the next three years.
Requirement#7:
Calculate the EFN amount for the three years and recommend to the
owner that what is the extra amount that means to be injected to
make the new project successful.