Luckycementfinalprojectfr 130329051702 Phpapp01

A PROJECT OF FINANCIAL ANALYSIS
ON
LUCKY CEMENT
[FINANCIAL ANALYSIS]
27/12/2012
PRESENTED TO:
PROF, AYESHA ANWAR
PRESENTED BY:
Muhammad Tayyab
111405
Muhammad Irfan
103125
M. Qamar Abbas
103141
Farhan Ahmad
091334
The Institute of Management Sciences (Pak-AIMS)
Page 2
27/12/2012
ACKNOWLEDGEMENT
We would like to pay our praises and humblest thanks to AL-MIGHTY
ALLAH, the most Merciful and Beneficiate of all, who bestowed us with the
ability to complete this project. It gives us immense pleasure and honor to extend
our thanks to our kind & cooperative . Prof Ayesha Anwar from Faculty of
Institute of Management Sciences, Lahore for his valuable advices and suggestions
throughout our semester, in order to perform well & up to mark..
Finally, we pay regards of gratitude to our parents, as they and their prayers for our
success are always been a pillar of strength for us in our life.
Page 3
27/12/2012
Table of Contents
INTRODUCTION........................................................................................................... 6
Founder History.......................................................................................................... 7
COMPANY INFORMATION............................................................................................. 9
Board of Directors...................................................................................................... 9
BUSINESS STRATEGY................................................................................................ 12
1. Holding and growing local dominance..........................................................................12
2. Increasing our share in International market....................................................................12
3. Efficiency.............................................................................................................. 12
4. Sustainable Development........................................................................................... 12
5. HR Excellence........................................................................................................ 12
Corporate Philosophy.................................................................................................. 13
Vision Statement........................................................................................................ 13
Mission Statement...................................................................................................... 13
Logo Philosophy............................................................................................................ 13
AWARDS................................................................................................................... 14
Leadership As Solid As Concrete...........................................................................15
COMMUNITY DEVELOPMENT:.................................................................................15
Development of the Company..................................................................................18
INVESTOR RELATIONS............................................................................................... 19
EXPORTS................................................................................................................... 19
CEMENT MANUFACTURING PROCESS........................................................................21
QUALITY ASSURANCE............................................................................................... 23
CERTIFICATE............................................................................................................. 24
PRODUCTS OF THE COMPANY................................................................................... 24
OPC (Ordinary Portland Cement):...................................................................................24
SRC (Sulphate Resistant Cement):.................................................................................. 25
Clinker:.................................................................................................................... 25
Block Cement:........................................................................................................... 26
SUSTAINABILITY........................................................................................................ 26
Building network:..................................................................................................... 31
Pakistan Business Council (PBC)............................................................................31
CSR Association of Pakistan..................................................................................31
Marketing Association of Pakistan (MAP)...............................................................31
US Atlantic Council................................................................................................ 31
Page 4
27/12/2012
Building Network................................................................................................... 32
Pakistan Institute of Corporate Governance (PICG)...............................................32
SAFETY AND SECURITY............................................................................................. 32
Fire Fighting........................................................................................................... 33
Basic Life Support Cardiopulmonary Resuscitation (CPR)...................................33
Vertical Analysis of Financial Performance................................................................37
Horizontal Analysis of SOFP...................................................................................... 38
Vertical Analysis of Statement of Financial Position..................................................40
Horizontal Analysis of Statement of Financial Position.............................................41
Ratio Analysis of Lucky Cement Lemited..................................................................42
Current Ratio:............................................................................................................ 43
Inventory Turnover:..................................................................................................... 43
Gross Profit Ratio:...................................................................................................... 43
Operating Profit Margin:............................................................................................... 43
Net Profit Ratio:......................................................................................................... 44
Return on Capital Employed.......................................................................................... 44
Return on Assets:........................................................................................................ 44
Assets Turnover Ratio:................................................................................................. 44
Quick Ratio:.............................................................................................................. 45
Debt ratio:................................................................................................................ 45
Interest cover:............................................................................................................ 46
Earning per share:....................................................................................................... 46
Standards, amendments and interpretations adopted during the year............................................46
Recommendations and Financial Strategy:...............................................................47
Conclusion:............................................................................................................... 47
Page 5
27/12/2012
INTRODUCTION
Lucky cement Sponsored by well known Yunus
Brothers Group one of the largest export houses of Pakistan, Lucky Cement Limited currently
has the capacity of producing 25,000 tons per day of dry process Cement.
Lucky Cement Limited (LCL) is Pakistans largest producer and leading exporter of quality
cement with the production capacity of 7.75 million tons per annum. The company is listed on
Karachi, Lahore, Islamabad and London Stock Exchanges.
Over the years, the Company has grown substantially and is expanding its business operations
with production facilities at strategic locations in Karachi to cater to the Southern regions, Pezu
and Khyber Pakhtunkhwa to furnish the Northern areas of the country. Lucky Cement is
Pakistans first company to export sizeable quantities of loose cement being the only cement
manufacturer to have its own loading and storage terminal at Karachi Port.
Lucky Cement is an ISO 9001:2008 and 14001:2004 certified company and also possesses many
other international certifications including Bureau of Indian Standards, Sri Lankan Standard
Institute, Standards Organization of Nigeria, Kenya Bureau of Standards and South African
Bureau of Standards.
Page 6
27/12/2012
Founder History
Late Abdul Razzak Tabba, the deceased Chairman of the Yunus Brothers Group is the person
behind the success of the Group. He was a prominent business leader and well liked in the
business
fraternity.
He
was
an
enterprising
businessman with calculated economic
thinking.
Mr. Tabba's dynamism, loyalty and
vision
Pakistan stronger among other nations

more industrialization and technology
Mr. A. Razzak Tabba (S.I)

The late Chairman
& Chief Executive
of Lucky Cement
goals set by him. It was Mr. Tabbas
to
make
of the world. Bringing in

transfer were the major
dynamism that the Group
expanded from regional to international level, despite the economic meltdown.

Under the leadership of Mr. Abdul Razzak Tabba, the Group received more than 20 Exports
Trophies from the Government of Pakistan, for the highest overall exports from the country and
the highest exports in the textile sector.
He was not just a visionary businessman, but also was a leader and philanthropist. All his
philanthropic activities were routed through the Aziz Tabba Foundation, Established for
promotion of charity and other welfare-oriented projects, serving the humanity with unmatched
compassion and entrepreneurship.
Mr. Razzak Tabba strived for excellence through perfect balance between his career and service.
He was also honored with Sitara-e-Imtiaz by the Government of Pakistan.
Page 7
27/12/2012
Mr. Abdul Razzak Tabba is no more among us but his values continue, giving hope and strength
to all the members associated with YB Group.
Dynamism, loyalty and a vision to make our country stronger among the other nations of the
world by bringing in more and more industrialization and technology transfers these were
some of the many goals set by our late Chairman & Chief Executive Mr. A. Razzak Tabba.
Yunus Brothers Group is one of the largest export house of Pakistan that has grown up
remarkably over the last 50 years. The YB Group is engaged in diversified textile manufacturing
activities consisting of Spinning, Weaving, Processing, Finishing and Stitching. The Group also
owns one of the largest cement manufacturing plant and the second largest yarn manufacturing
capacity in the Country. Besides manufacturing, the Group is also engaged in International
Trading of various commodities.
The Group consists of the following Companies, with an annual turnover of over Rs. 27 Billion
or US$ 450 Million during year 2004~2005 out of which exports amounted to US$ 300 Million.
1. Lucky Cement Limited
2. Gadoon Textile Mills Limited
3. Fazal Textile Mills Limited
4. Yunus Textile Mills
5. Lucky Energy (Private) Limited
Page 8
27/12/2012
6. M/s. Yunus Brothers

7. Lucky Textile Mills
8. Security Electric Power Company Limited
COMPANY INFORMATION
Board of Directors
Mr. Muhammad Yunus Tabba (Chairman)
Mr. Muhammad Sohail Tabba
Mr. Imran Yunus Tabba
Mr. Jawed Yunus Tabba
Mrs. Rahila Aleem
Mrs. Mariam Tabba Khan
Mr. Ali J. Siddiqui
Mr. Manzoor Ahmed (NIT)
Chief Executive
Mr. Muhammad Ali Tabba
Page 9
27/12/2012
Chief Operating Officer

Mr. Noman Hasan
Director Finance and Company Secretary

Mr. Muhammad Abid Ganatra
FCA, FCMA, FCIS
Statutory Auditors
M/s. Ernst & Young Ford Rhodes
Sidat Hyder, Chartered Accountants
A member firm of Ernst &
Young Global Limited
Internal Auditors
M/s. M. Yousuf Adil Saleem & Co.,
Chartered Accountants
A member firm of Deloitte Touche
Tohmatsu
Cost Auditors
Page 10
27/12/2012
M/s. KPMG Taseer Hadi and Co.,

Chartered Accountants
Head Office:
6-A, Muhammad Ali Housing Society,
A. Aziz Hashim Tabba Street,
Karachi - 75350
UAN # (021) 111-786-555
Website: www.lucky-cement.com
E-mail: info@lucky-cement.com
Liaison Office
Dastagir Tower, 1st Floor, Hassan Parwana Road, Near Deira Ada, Multan
Multan
Tel: (92-61) 4540556-7

Fax: (92-61) 4540558
multan@lucky-cement.com
2nd Floor, Al Hasan Plaza, Jamia Ashrafia, Main Ferozpur Road, Lahore
Lahore
UAN: (92-42) 111-786-555

Tel: (92-42) 37530480-2 Fax: (92-42) 37530435
lahore@lucky-cement.com
Islamabad House No. 26, Street No. 8, Sector F-7/3, Islamabad UAN: (92-51) 111-786-555
Page 11
27/12/2012
Tel: (92-51) 2610804-07 Fax: (92-51)2610809

dm@lucky-cement.com
7-Park Avenue, University Town UAN: (92-91) 111-786-555
Peshawar Tel: (92-91) 5844903-5840271 Fax: (92-91) 5850969
peshawar@lucky-cement.com
Quetta
F1, First Floor, Institute of Engineers Building, Zarghoon Road,

Tel : (92-81) 2837583 Fax : (92-81) 2829267
quetta@lucky-cement.com
Production factories:
1)
Pezu, District Lakki Marwat, Khyber Pakhtunkhwa
2) 58 Kilometers on Main Super Highway, Gadap Town,

Karachi.
BUSINESS STRATEGY
1. Holding and growing local dominance
Further reinforcing our strength is what we keep in focus when designing our business strategies
for the local market.
2. Increasing our share in International market

Broadening our horizons, we have engaged our resources to the unconventional markets to
become accessible to be the construction industry worldwide.
Page 12
27/12/2012
3. Efficiency
Efficiency is reflected in all our business approaches, giving us an edge over the competitors in
cost and energy, by skillful utilization of resources.
4. Sustainable Development
We believe in giving back to the communities we operate in and to the society at large. We
endeavor to stimulate environmental awareness among the stakeholders and have a broad vision
for the sustainable world.
5. HR Excellence
We believe in people development. Our Human Resource is our asset and an important factor in
our success. Our intellectual capital provides a framework that serves as a guiding force for the
organization as a whole.
Corporate Philosophy
Vision Statement
We envision being the leader of the cement industry in Pakistan, identifying and capitalizing on
new opportunities in the global market, contributing towards industrial progress and sustainable
future, while being responsible corporate citizens.
Mission Statement
Our mission is to be a premium cement manufacturer by building a professional organization,
having state-of-the-art technology, identifying new prospects to reach globally and maintain
Page 13
27/12/2012
service and quality standards to cater to the international construction needs with an
environment-friendly approach.
Logo Philosophy
Recently, we launched our new identity marking a significant milestone in our history. Our new
logo represents the core values that Yunus Brothers uphold and live by. The hexagon presents our
values, attributes and quality parameter which comprises of state of the art technology, our
foresight and innovation to compete with international standards. Our commitment to quality and
the diversity of our portfolio to meet the customer needs. It reflects our journey towards modern
and innovative business practices, smart investment moves, diversity in human resource and
unconventional approaches towards building our corporate image.
AWARDS
Lucky Cement has a tradition of excellence in business. Various Awards and Achievements
presented to Lucky Cement in recognition of a successful corporate company.
National CSR Excellence Award
Brand of the Year Award
Annual Environment Excellence Award
Recognition from Chamber of Commerce and Industry:
Page 14
27/12/2012
Karachi Chamber of Commerce and Industry:

Awarded the Export Trophy to Lucky Cement for highest exports of cement from Pakistan.
Khyber Pakhtunkhwa Chamber of Commerce and Industry:
Awarded the following distinctions:
Top Sales Tax Payer
Top Income Tax Payer
Top Exporter
Top Importer
Exports Trophy 2009 2010
Leadership As Solid As Concrete

I was the first one to reach the top. None, but my shadow was my competition. I relied on the
strength of my body and soul; my guiding stars were faith, honesty and excellence. I fired above
the mark that I intended to hit. Energy and invincible determination with the right motives are the
levers through which I moved the world. Reflecting on my success, it is evident that I am the
unparalleled market leader. Through my strategies, I anticipate the needs of the industry. I have
managed to stay on top with cutting edge solutions, building your dreams and making them a
reality. On my journey, I have left traces for winners to become champions. As I embark on a
new chapter to help shape the future of our nation, you can rest assured that I will deliver you
with leadership as solid as concrete.
Page 15
27/12/2012
I am Lucky Cement!
COMMUNITY DEVELOPMENT:
Water supply Scheme at Darra Pezu:
Lucky Cement established water supply scheme and distribution lines to provide clean
drinking water to the residents of Darra Pezu. The 9 Km water supply line provides clean
drinking water facility to the residents of the rural localities situated in the outskirts of Darra
Pezu town. The distribution line starts from Lucky Cement's Pezu Plant and provides water to
outskirts of Pezu by connecting with two wells made by LCL. From these wells, water is then
passed to the old distribution lines and hence spreads all over Darra Pezu. This water supply line
provides drinking water to almost 70% of the population of Pezu, which is equal to 5,000
households. Outside Pezu, almost 2,000 households get water from these lines
Ultrasound facility at Mother and Child Health Care Centre
Lucky Cement, in partnership with Concern for Children Trust (CFC), is setting
up an Ultrasound facility at Mother and Children Health Care Centre (MCH) in
Machar Colony, a slum area in Karachi. The Machar Colony has a population of
approximately 750,000 people deprived of basic necessities of life including
quality health care for women. By establishing this facility, Lucky Cement and
CFC aim's at creating awareness about prenatal and post natal care of mother and
Page 16
27/12/2012
child, safe child birth and prevention and cure of any disabilities in children at an
early stage.
Model Village in DI Khan

o After providing relief to the affectees of the massive destructions caused by floods
and heavy rains last year, Lucky Cement focused all the efforts towards
rehabilitation of the IDPs. Lucky Cement generously donated 600 cement bags for
the construction of a model village in Dera Ismail Khan.
Scholarship Program for the students of Pezu

o Lucky Cement's management in Pezu has initiated a merit cum need based
scholarship scheme for the local students of Graduate and Post Graduate levels,
registered with HEC recognized institutions to enable them to acquire higher
education.
World-Class Primary School in Darra Pezu
LCL is all set to construct a world-class primary school, near its factory in Pezu,
District Lakki Marwat, in partnership with a renowned NGO, chartered by the
Government of Pakistan and endorsed by the World Bank. This school will be
affiliated with Pakistan's well known school system and will provide access to
quality education to the residents of the area. In first phase, the company will
Page 17
27/12/2012
establish a primary school, which will later be expanded to secondary education

as well. This school will be strategically constructed in an area where there are no
such facilities currently available.
Lucky City School Pezu

o
LCL also runs a well-maintained primary school, up to class five, for the children
of the factory workers in Pezu. The school is registered with Benu Education
Board and provides quality and free of cost education to the children of
employees.
DI Khan Airport Renovation
The company also took responsibility of the renovation of DI Khan Airport as a

welfare gesture for the locals of the area and to boost overall commerce and
economy. Upgrading of the airport exterior and interior has been completed, along
with provision of furniture for both arrivals and departure lounges.
Development of the Company
Page 18
1993
1996
1999
2001
2002
2005
2006
2007
2008
2009
2010
2011
2012
27/12/2012
Listed on Karachi, Lahore and Islamabad Stock Exchanges

Entered into commercial business with production capacity of 1.2
million tons per annum (Lines A and B at Pezu Plant)
Production capacity increased to 1.5 million tons per annum
Conversion of Kiln Firing System from furnace oil to coal based
Started exporting cement
Started new production line (Line C) at Pezu
Inaugurated new production facility in Karachi
Became the largest cement exporter from Pakistan
Started new production line (Line D) in Pezu
Started production in Karachi plant (Lines E and F)
Became largest cement producer of Pakistan.Acquired transportation
fleet of bulkers and ship loaders
Became the first company to export loose cement through sea
Set up its own cement storage facility at Karachi Port with the
capacity of 24,000 tons
Conversion of furnace oil power generation engines to gas-based
Got listed in London Stock Exchange and became the first cement
company in Pakistan to issue GDR
Started the 7th production line (Line G) at Karachi Plant, bringing the
total production capacity to 7.75 million tons per annum
Waste Heat Recovery Project started operations at both Karachi and
Pezu Plants
Acquired multi-purpose trailers for moving all kinds of payload,
either bagged or in raw form
Signed MOU to sell 20 MW electricity to Hyderabad Electric Supply
Company (HESCO)
Set up a plant at Karachi Plant to replace coal with Tyre Derived Fuel
(TDF) to further reduce cost of production
Invested in a joint venture in DR Congo
Started supplying electricity to HESCO.
Signed Lol for supply of electricity to PESCO.
Invested in a joint venture of cement grinding plant in Iraq.
Shares acquisition of ICI Pakistan limited.
INVESTOR RELATIONS
Page 19
27/12/2012
Lucky Cement realizes the importance of interaction with the existing shareholders and potential
investors of the Company and in this respect participates in various investor conferences held
from time to time domestically or abroad.
For the last couple of years, LCL has been participating in national and international Conferences
to meet and interact with existing and potential investors for attracting foreign investment into
the Country.
These conferences are attended by representatives of Banks, Asset Management companies,
Insurance companies and various other corporate individuals.
Lucky Cement NTN: 0009807-8
Lucky Cement - Registration Number: 0031182
For any investor related queries and / or grievances, contact our Corporate Affairs Department or
visit SECPs Investor Complaint Section.
EXPORTS
Pakistans first company to export sizable quantity of loose cement and it is the only
cement manufacturer to have a loading and storage terminal at Karachi Port. This state-of-the-art
project is based on the latest European technology and the first in South East Asia and
Middle Eastern region. This terminal is equipped with logistical arrangements to carry loose
cement, which is transferred to the port from our Karachi Plant via a fleet of especially designed
cement bulkers, they are capable of off-loading loose cement into carrier ships directly through a
Page 20
27/12/2012
unique compressor system installed on each vehicle. Each bulker can carry up to 75 tons of
cement.
Our infrastructure at Karachi port is specially designed to transfer loose cement to the vessels in
the shortest amount of time, making it efficient and reliable for reducing the vessels idle time , in
turn making the shipments timely as per the customer requirements. We have installed cement
storage silos at the port which are capable of storing 24,000 tons of cement. LCL has set up
automatic ship loaders at the site to make a fully automatic loading from the silos when the
vessels arrive. This system works at fast discharge rates and enables quick loading time, ensuring
cement availability at the port anytime; thus playing a major role in increasing our export
capacity. The loading capacity of this terminal is 12,000 tons of loose cement per day, which
depends upon the size and construction of vessel(s). In order to store large amount of cement,
four silos have been installed, each silo has a capacity to store around 6000 metric tons cement,
and underground system has been designed to unload bulkers, store cement into silos and transfer
required quantity of loose cement into vessels.
The whole system is designed on the basis of PLC (Programmable logic control) system. All
processes go through a fixed repetitive sequence of operations that involves logical steps and
decisions. PLCs are used to control time and regulate the system, the extraction of cement from
bulkers and reloading in to vessels is processed though vacuum pumps and compressors, which
operate through powerful generators. The cement transfer volumes attained through this system
is approximately 500 metric tons per hour. A strong work force of skilled individuals, including
engineers, technicians and labor are employed at the companys terminal on port.
Page 21
27/12/2012
With this specialized work force, Lucky Cement is capable of loading around 2000 tons of
bagged cement per day, and 3000 tons cement per day in sling bags. This record rate of loading
is achieved through our well-trained stevedores who maintain load rate and utilize their
capabilities to the maximum. To date, more than 50 million tons of loose cement has been
exported through the plant installed at Karachi port.
CEMENT MANUFACTURING PROCESS

Cement is a fine, soft, powdered substance, made from a mixture of elements that are found in
natural materials such as limestone, clay, iron ore and sand. When cement is mixed with water, it
can bind sand and turns into a hard, solid mass called concrete.
Raw Material Preparation

The key element Limestone and clay are mined through blasting from rock quarries by setting
off explosives. Limestone and clay contains calcium, silicon, aluminum and iron, which are the
essential elements for cement manufacturing. Latest technology is used for blasting so as to
ensuring vibration, dust, and noise emissions are kept at a minimum level. Blasting produces
materials in a wide range of sizes from approximately 1.5 meters in diameter to smaller particles
less than a few millimeters in diameter. Quarried material is the loaded into trucks or belts for
transportation to the crushing plant. Through a series of crushers and screens, the Limestone is
reduced to a size less than 100 mm and is stored until required.
Pre - Homogenization
Page 22
27/12/2012
In the dry process, each raw material is proportioned to meet a desired chemical composition and
fed to a vertical steel mill. The raw materials are dried with waste process gases and grinded
through the pressure exerted by three conical rollers in a rotary kiln. The rotary kiln is fired with
an intense flame produced by burning coal, coke, oil, gas or waste fuels. The dry materials
exiting the mill are called "kiln feed". The kiln feed is pneumatically blended to ensure the
chemical composition is well homogenized and is then stored in separate silos until required.
Basic chemical reactions that take place in the kiln, at 1400 C are: Evaporation of moisture,
calcinations of the Limestone to produce free calcium oxide and reaction of the calcium oxide
with other materials (sand, shale, clay, and iron). This results in a final, nodular, red-hot product
known as "Clinker" which is 3 4 centimeters in diameter and can be stored for several months.
Finishing, Packaging and Distribution

The clinker is cooled and grinded into a fine grey powder. The grinding is done through
different-size steel balls. A small amount of gypsum and other process are also added during the
final grinding. The amount of gypsum and process added during the process varies in all of the
final cement products. Each cement product is stored in an individual silo from where it is
transported to packaging facility for either sack packaging or bulk transportation. Bulk cement
is distributed through bulkers or is shipped; depending on the customer's needs.
QUALITY ASSURANCE
Lucky Cement greatly emphasizes in manufacturing high quality cement through stringent
quality control techniques and computerized control systems. Using sophisticated equipment like
Page 23
27/12/2012
Distributed Control System (DCS), Programmable Logic Controllers (PLCs) and on line X-Ray
Analyzers. We have one of the best equipped laboratories, with facilities for analysis of raw
material, semi furnished product, furnished product and fuel, to ensure the supply of high quality
product to market.
Quality of the cement has been tested and proven up to the specifications mentioned in Pakistan,
British, Indian, Kenyan, Nigerian, South African and Sri Lankan Standards.
Lucky Cement has been accredited by following international bureaus of Standards:
1. Bureau of Indian Standards
2. Sri Lankan Standard Institute
3. Standards Organization of Nigeria
4. Kenya Bureau of Standards
5. South African Bureau of Standards.
Lucky Cement is also an ISO 9001:2008 and ISO14001:2004 certified company
Page 24
27/12/2012
CERTIFICATE
PRODUCTS OF THE COMPANY

OPC (Ordinary Portland Cement):
We offer Ordinary Portland Cement (OPC) that is used in all general constructions, especially in
major and prestigious projects where cement is needed to meet stringent quality requirements. It
can also be used in concrete mortars and grouts, etc. Ordinary Portland Cement is
compatible/consumable with admixture/ retarders, etc.
Page 25
27/12/2012
OPC has easy workability and lower heat

of hydration. We maintain our technical
standard of quality parameter at high level
and with high strength at all ages. Our
OPC cement satisfies EN 196 / 197 1,
SABS, BIS, SLSI & PSS 232 ~ 1983 (R).
SRC (Sulphate Resistant Cement):

By maintaining C3A level within the specified limit of 3.5%, our Sulphate Resistant Cement is
more resistant to Sulphate attacks and is suitable for use in foundations near seashore and canal
linings.
SRC has lower heat of hydration and its strength satisfies B.S 4027 / 1980 & PS 612 / 1989.
Clinker:
We also offer clinker to the customers with their own grinding units. Clinker can be easily
handled by ordinary mineral handling equipment and can be stored for several months without
compromising on the quality. Clinker is the primary product in the cement manufacturing
process where limestone, clay and sand are grinded and heated, before the gypsum is added to
produce the final product of cement.
Block Cement:
By the nature of product, Block Cement is similar to the SRC, with a significantly darker color
and some low setting time to meet the requirements of the market and for the production of
blocks. Block Cement also maintains C3A level within the specified limit of 3.5%.
BRANDS AVAILABLE AT LUCKY CEMENT
Page 26
27/12/2012
Lucky CEMENT (REGULAR)
Lucky STAR
Lucky GOLD
Lucky SULPHATE RESISTANT CEMENT (SRC)
SUSTAINABILITY
Business leaders across the globe, appreciate the fact that business is not just about
making quality products or satisfying your clients. Beyond the requirement of legal
settings, businesses are
now
required
to
manage
the
wider
social
and environmental consequences of their actions.
Page 27
27/12/2012
Lucky Cement is actively contributing towards the welfare of the society and plays its part in
areas of education, environmental awareness, and health and community development.
Believing in fair and transparent practices, we have reported separately on our sustainability
initiatives for the financial year 2011. Our Sustainability Report 2011 has been assessed with a
Level Check A by the Global Reporting Initiative (GRI). This makes us the only company in
Pakistan to receive Level Check A in the year 2010 2011
Page 28
27/12/2012
Page 29
Others; 23%
Attock Cement ; 6%
Pioneer Cement ; 4%
Lafarge Cement ; 6%
Kohat Cement ; 5%
27/12/2012
Lucky Cement ; 20%
Bestway Cement ; 11%

DG Khan Cement ; 15%
Maple Leaf Cement ; 10%
Page 30
27/12/2012
Page 31
27/12/2012
Building network:
Lucky Cement maintains a strong network of association with its corporate stakeholders. Our
association with prominent public and corporate platforms enable
us in strengthening our bond with local as well as international businesses.
Pakistan Business Council (PBC)

PBC represents big businesses, enterprises with substantial investments in
manufacturing and in the financial sector. PBCs aim is to promote and
facilitate the integration of Pakistani businesses into world economy and to encourage the
development and growth of Pakistani companies.
CSR Association of Pakistan

The CSR Association of Pakistan promotes CSR principles and
practices to businesses in Pakistan because it makes companies
more innovative, productive, and competitive.
Marketing Association of Pakistan (MAP)

MAP is an independent association that promotes the study of all branches of knowledge
relevant to the profession of marketing. It provides facilities for the study of inquiry and research
into marketing problems. The Association enjoys patronage from the Government of Pakistan
and is represented on the Advisory Council of the Ministry of Commerce.
US Atlantic Council
The Atlantic Council has been a preeminent, nonpartisan institution devoted to promoting
Page 32
27/12/2012
transatlantic co-operation and international security. The council provides an essential forum
for navigating dramatic shifts in economic and political influence.
Building Network
Lucky Cement maintains a strong network of association with its corporate stakeholders. Our
association with prominent public and corporate platforms enable us in strengthening our bond
with local as well as international businesses.
Pakistan Institute of Corporate Governance (PICG)

The PICG undertakes activities geared towards achieving good corporate
governance in the country and creating an enabling environment for
effective implementation of the Code of Corporate Governance. PICG is
focused on encouraging professional interaction between members and to
enhance competitiveness of the domestic corporations.
SAFETY AND SECURITY

For us, safety and security means not just protecting our employees from any hazards, but also
taking all the requisite measures to prevent any harm. We ensure that all our stakeholders are
protected from any potential hazards. Today, when information related to health issues is widely
available and just a click away, there is still a significant lack of knowledge regarding the typical
signs and risk factors associated with serious medical conditions. We effectively control any risks
to injury or health that could arise at the workplace and educate our employees on how to deal
with risks and train them with various first-aid techniques.
Page 33
27/12/2012
Fire Fighting
We believe that the ample knowledge in first aid and fire fighting support should be an essential
aspect for an office environment as these trainings are important for both the support provider
and the victim and minimizes the potentials of any unpleasant event.
Basic Life Support Cardiopulmonary Resuscitation

(CPR)
Basic life support consists of a number of medical procedures provided to patients with life
threatening conditions that may cause pain or dysfunction. We organized a session on Basic Life
Support training for our employees, which was fruitful in enabling them to identify several lifethreatening emergencies, performing CPR and ease choking in a safe, timely and effective
manner. All the participants actively performed the practical and were given certificates for their
participation.
Page 34
27/12/2012
Lucky Cement Limited.

Consolidated Profit and Loss Account
For the year ended June 30,2012
Gross Sales
Less: Sales Tax and
Excise Duty
Rebates and
Commission
Net Sales
COST OF SALES
GROSS PROFIT
Distribution costs
Administrative expenses
2012
2011
2010
Rs.000
Rs.000
Rs.000
39,123,1 31,767,0
47
53
5,485,62 5,545,54
9
9
314,983 203,985
Analysis
Verti Horizon
cal
tal
29,052,9 100% 134.66
01
%
4,226,45 14% 129.79
9
%
317,649
1%
99.16%
5,800,61 5,749,53 4,544,10

2
4
8
33,322, 26,017, 24,508,
535
519
793
20,601,2 17,306,5 16,529,9
61
19
32
12,721, 8,711,0 7,978,8
274
00
61
3,236,72 3,236,42 3,433,04
1
5
7
474,135
313389
303244
15%
85%
53%
33%
8%
1%
Finance costs
253,234
517,788
569,184
1%
Other charges
438,411
325,482
257,774
1%
5,204
2,486
1,902
0%
8,323,9
77
333,225
4,320,4
02
260,175
3,417,5
14
195,697
1,208,33
6
89,946
84,360
other income
Profit before taxation
Taxation
Deferred
21%
1%
3%
127.65
%
135.96
%
124.63
%
159.44
%
94.28%
156.35
%
44.49%
170.08
%
273.61
%
243.57
%
170.28
%
1432.3
6%
Page 35
Profit before taxation

other comprehensive
income
Total comprehensive
income
27/12/2012
1,541,5
61 350,121 280,057
6,782,4 3,970,2 3,137,4
16
81
57
-
6,782,4
16
3,970,2
81
3,137,4
57
17%
550.45
%
216.18
%
17%
216.18
%
4%
Vertical Analysis of Financial Performance

The vertical analysis shows very good performance of the organization, Cost of Services are
52% of sales with a resulting Gross Profit of 33% this is good performance of the company and
despite very good sales revenue of over Rs. 391 Billion the profitability of the organization is
very good for the company. Company achievement is so high.
In distribution cost major expense is incurred on Advertisement and distribution which is Rs. 32
Billion and it is extremely high as well.
Administrative expenses of the organization still increase with the previous year 1% of the
total sales revenue and amounts more than Rs. 4.74 Billion it is also very high.
Finance Cost of organization is decrease as compare to previous year that cost are Rs. 2.53
Billion and it comprise almost 1% of the sales revenue.
Just because of the above mentioned main points organization performance is so good and
increase the net sales as compare to the previous.
Page 36
27/12/2012
As you can see in the statement of profit and loss, lucky cements gross profit is sizable, at 33
percent. The distribution cost, though, are eating up a huge chunk of the revenues; that could be
an area in which to cut back. General operating expenses take up a reasonable percentage of
sales, leaving lucky cement with about a 17 percent bottom-line profit.
Horizontal Analysis of SOFP

When we do a horizontal analysis of the organization we come to find that the sales of
organization have increased by 37% but surprisingly its cost of services increased by 24%
which clearly indicates that the management of the organization is in a very good shape and the
corresponding cost of sales to with better management. As a result even the increase in sales has
resulted that company grow well and performance is so good as compared to the previous year it
is still growing and improve the sale volume on the organization in the coming year.
Gross profit of the organization is decreased by 59% which indicates clearly that company
going to improve and cost of good is not effect on the profit of the company.
Exchange profit of the organization in the year 2012 has increased by 143% slightly change in
the cost of the current year.
Due to all above results and good business performance the overall profit of the organization has
increased by 116% which is make stronger of the organization and in the future it may increase
the plant and business.
Page 37
27/12/2012
Lucky Cement Limited.

Consolidated Statement of Financial Position
As on June 30, 2012
2012
2011
2010
Rs.000
Rs.000
Analysis
Vertic Horizon
al
tal
31,016,5
32
1,514
31,018,
046
31,705,1
56
1,685
31,706,
841
31,378,2
55
2,977
31,381,
232
76.34
%
0.00%
76.34
%
55,373
55,373
55,373
0.14%
3,175
31,076,
594
3,175
31,765,
389
2,175
31,438,
780
0.01%
76.48
%
5,396,22
0
1,276,43
3
6,313,58
4
1,248,53
8
4,008,28
8
13.28
%
608,813
3.14%
ASSETS
NON CURRENT ASSETS
Fixed assets
Property, plant and equipment
Intangible
Long term loan advances

Long term deposit
98.85%
50.86%
98.84%
100.00
%
145.98
%
98.85%
CURRENT ASSETS
Stores and spares

Stock in-Trade
134.63
%
209.66
%
Page 38
27/12/2012
1,050,63
9
620,961
779,305
2.59%
Loans and advances

Trade deposits and Short Term
Prepayments
Other receivables
148,189
72,164
86,471
0.36%
67,894
105,677
38,669
218,884
48,807
204,249
0.17%
0.26%
Tex refunds due from the Government

Taxation net
Sales Tax refundable
538,812
126,361
0
538,812
41,652
0
538,812
145,151
117,939
1.33%
0.31%
0.00%
Cash and bank balances
844,422
9,554,6
47
40,631,
241
351,202
9,444,4
66
41,209,
855
333,629
6,871,4
64
38,310,
244
2.08%
23.52
%
100.0
0%
134.82
%
171.37
%
139.11
%
51.74%
100.00
%
87.05%
0.00%
253.10
%
139.05
%
106.06
%
3,233,75
0
30,027,9
95
33,261,
745
3,233,75
0
24,539,0
79
27,772,
829
3,233,75
0
21,862,1
79
25,095,
929
7.96%
73.90
%
81.86
%
100.00
%
137.35
%
132.54
%
Long term Finance
392,898
658,298
1,658,60
0
0.97%
Long Term Deposits
52,752
3,299,52
2
3,745,1
72
37,306
2,044,63
3
2,740,2
37
31,957
1,882,06
7
3,572,6
24
3,345,60
5
13,319
4,043,68
9
85,448
6,302,28
2
265,400
3,043,32
0
155,500
6,267,11
2
175,759
Trade debts
Total Assets
EQUITY AND LIABILITIES

SHARE CAPITAL AND RESERVES
Share capital
Reserves
NON-CURRENT LIABILITIES
Deffered Libilities
9.22%
23.69%
165.07
%
175.31
%
104.83
%
8.23%
0.03%
109.93
%
8.57%
0.00%
0.65%
0.00%
151.00
0.13%
8.12%
CURRENT LIABILITIES
Trade and other payables
Accrued interest
Short-term borrowings
Current Long-term financing
0
265,400
Page 39
27/12/2012
%
3,624,3
24
10,696,
819
9,641,6
91
8.92%
37.59%
40,631,
241
41,209,
885
38,310,
244
100.0
0%
106.06
%
CONTINGENCIES AND COMMITMENTS

TOTAL EQUITY AND LIABILITIES
Vertical Analysis of Statement of Financial

Position
Asset side of the SOFP is very good and favourable there is no indication of unfavourable ratio
between the Fixed and Current assets as the Fixed assets are 77% of the total assets which is very
normal and the Current Assets are 23% of the total assets and it is also veru normal and
favourable.
On the other hand the liability side is in a very good shape and it shows that the equity side of the
SOFP is very positive due to good balance of reserves which are due to accumulated profit of
the previous years.
Another alarming fact is the Current Liabilities as they comprise of 9% of the total libilities
and Non-Current liblities are also 9% and equity is 82% as show in the above statement of
the financial position it is very strong position of the company , which indicates that the
organization has to pay off of the organization is very little and strong equity of the organization.
Page 40
27/12/2012
Horizontal Analysis of Statement of Financial

Position
Horizontal analysis of the SOFP shows that at Asset side Cash and bank balances has been
increase significantly and it has increase by 153% amounting about Rs. 8.4 Billion, short term
investments have also been increase by 139% which means that the orgnaization has sold its
investments to generate cash.
Liability side of the SOFP has also became very strong and very huge change as compared to
the previous year, balance of the reserves has been increased by 30% which is due to the increase
in the profits of the organization during the past years. Long term financing of the organization
has been decrease by 77% amounting a very heavy amount of Rs. 12.75 billion, as the overall
long term financing is decrease, hence it will also decrease the overall finance cost in the future
and it will also decrease the current liability of ineterest expenses.
Current Liabilities of the organization have also been decrease by 62% which the horizantial
improvement of the organization.
The share capital and reserves of the company are increasing every year, which shows the strong
financial position of the organization. There is a increase in noncurrent liabilities of the
organizations as 4% in that year but a well decrease in current liabilities 62%. There is a jump in
companys noncurrent assets and current assets.
Page 41
27/12/2012
Ratio Analysis of Lucky

Cement Lemited.
2012
2011
2010
Current Ratio
2.46
0.88
0.71
Quick Ratio
1.15
0.29
0.30
Gross Profit Ratio
33%
27%
27%
Operating Profit Margin
21%
14%
12%
Net Profit Ratio
17.34%
12.50%
10.80%
Return on Capital Employed
22.57%
11.23%
9.84%
Return on Assets
20.49%
10.48%
8.92%
0.97
0.77
0.76
Earning per share
20.09
12.28
9.7
Capital Gearing Ratio
306%
219%
301%
18%
33%
34%
32.87%
8.34%
6.00%
Asset Turnover
Debt Ratio
Interest Cover
Page 42
27/12/2012
Current Ratio:
The purpose of using liquidity ratio is to determine the ability of the company for paying off its short term
debts. The higher value of liquidity ratios reflects that the company is well secured in performing its
obligations of short term debts. The calculation of current ratio shows that lucky cement is well secured in
this region. Its current ratio is 2.64 more than previous year .88
Inventory Turnover:
If we compare the inventory turnover it is 3.84 in year 2011 and 5.84 this year. This shows that company
has lower its efforts to convert its inventory into sales due to several reasons like power shortage.
Gross Profit Ratio:

Profitability ratios are the measure of assessing business performance of generating profits with
respect to its expenses and other relevant expenses in a specific period of time say one year. The
higher value as compare to the competitors or industry average or relative to previous period
show the business is going well. In the present case, Company Lucky cement generated 27.00
Gross Profit as compare to year in 2011 which Gross Profit was 33.00 which shows that 2012
has better managed its COGS which resulted in increase of the Gross Profit.
Operating Profit Margin:

Company has generated 14% Operating Profit in 2011 and as compare to previous year in 2012
Operating Profit is 21%. Company decrease their finance cost and slightly change in CGS that is
and sales revenue is so high as compared to the previous year and performance is so increase in
that year.
Page 43
27/12/2012
Net Profit Ratio:

Company has generated 12.50% Net Profit in 2011 and as compare to previous year in 2012 Net
Profit is 17.40%. This improvement is so high in the net profit that company improved his
performance beyond the previous years. Company decrease his finance cost also increases his
income that is effective on the increase the Net profit ratio.
Return on Capital Employed

Lucky cement is very strong in this area and proved that the management is well employing it
Capital Employed (capital investment) generating almost 22.57% in this year and the previous
year ROCE was 11.23% that show the strong area of the company management and more return
than the Stock or Shares and Long-term Liabilities.
Return on Assets:
Lucky Cement is increase in return on assets in this year that would be 20% in 2012 and in 2011
that was 10% Company financial position is strong as compare to the previous year.
Assets Turnover Ratio:

Assets Turnover show that how much company has generated by employing on unit of currency.
Lucky cement is generating about 0.96 revenues against Re.1.0 assets. This reveals that although
the return is very good in 2011 however performing so well in 2012.
Page 44
27/12/2012
Quick Ratio:
The purpose of using liquidity ratio is to determine the ability of the company for paying off its
short term debts. The higher value of liquidity ratios reflects that the company is well secured in
performing its obligations of short term debts. The calculation of quick ratio shows that
Company
is well secured in this region.. The Company
can easily meets its short term
liabilities. Even is position with respect to Inventory Turnover is also better. Company Quick
Ratio in 2011 was 0.29:1 but in 2012 Quick Ratio is 1.15:1 that show the company well secured
in performing its obligation in short term debts.
Debt ratio:
Gearing ratio is the measure to check the equity to borrowed funds/long term financing. The best
measure is the gearing ratio (Debt to equity). The results of the company show that they are
highly geared as the portion of their borrowed money is very much higher than the owners
equity. The other best measure is to check, how much the profit covers its interest. The higher the
interest cover ratio value, the more safe the company position is. The debt ratio in 2011 was 33%
and in 2012 debt ratio is 18% show the company decrease the payables and remove all short
term borrowing and also decrease the long term financing that impact on the debt ratio and
strong position of the company show as well.
Interest cover:
Interest cover ratio is the measure to check the equity to borrowed funds/long term financing.
The best measure is the gearing ratio (Debt to equity). The results of the company show that they
are highly geared as the portion of their borrowed money is very much higher than the owners
Page 45
27/12/2012
equity. The other best measure is to check, how much the profit covers its interest. The higher the
interest cover ratio value, the more safe the company position is. Interest Cover was 8.2 in 2011
and in 2012 it is so high 32.87 that is four time double in that year and company show so the
high equity in present and it would shows as well strong financial position.
Earning per share:

Most important is what the company is paying back toits investors/owners. The greater value of
EPS maintain the investors and owners confidence on the company.The Company is paying
almost double the value and building its better image before the investors. The previous year
EPS was 12.28 and in 2012 it is increase by 20.9 that is greater value of EPS in present.
Standards, amendments and interpretations adopted during

the year
The accounting policies adopted in the preparation of these financial statements are consistent
with those of the previous financial year except as described below:
New and amended standards and interpretations
The Company has adopted the following new and amended IFRS and IFRIC interpretations
which became effective during the year:
IFRS 7 Financial Instruments: Disclosures (Amendment)
IAS 24 Related Party Disclosure (Revised)
IFRIC 14 Prepayments of a Minimum Funding Requirements (Amendment)
In May 2010, International Accounting Standards Board (IASB) issued amendments to various
standards primarily with a view to
Page 46
27/12/2012
removing inconsistencies and clarifying wording. These improvements are listed below:
IFRS 7 Financial Instruments : Disclosures (Clarification of disclosures)
IAS 1 Presentation of Financial Statements (Clarification of statement of changes in equity)
IAS 34 Interim Financial Reporting (Significant events and transactions)
IFRIC 13 Customer Loyalty Programmes (Fair value of award credits)
Recommendations and Financial Strategy:
In cement industry have some issue regarding electricity but the company should have to
improve their strategies and omit these issues.

The company should have to payoff its long term debts to avoid such a heavy finance
costs.
Finally, it needs more exemplary leadership, expand their business in foreign counties
and improve pricing stretgies and aslo improve its performance.
Conclusion:
Lucky Cement Lamited is one of the largest cement company in pakistan is financial performanc
in 2012 is so good as compaird to the previous yares.
Company management is so strong and strategies that are used is very usefull for the company
betterment and its growth. Due to state issues like electrocity, gas and other facters not effect on
the company performance but aslo company dramatically company growth going high. Company
should grow their business as multinationl and export the product in the other countries.
Thank you!
Page 47

Luckycementfinalprojectfr 130329051702 Phpapp01

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Luckycementfinalprojectfr 130329051702 Phpapp01

Uploaded by

Copyright:

Available Formats

A PROJECT OF FINANCIAL ANALYSIS

The Institute of Management Sciences (Pak-AIMS)

The Institute of Management Sciences (Pak-AIMS)

The Institute of Management Sciences (Pak-AIMS)

The Institute of Management Sciences (Pak-AIMS)

businessman with calculated economic

Mr. Tabba's dynamism, loyalty and

Pakistan stronger among other nations

Mr. A. Razzak Tabba (S.I)

goals set by him. It was Mr. Tabbas

of the world. Bringing in

expanded from regional to international level, despite the economic meltdown.

The Institute of Management Sciences (Pak-AIMS)

The Institute of Management Sciences (Pak-AIMS)

6. M/s. Yunus Brothers

Chief Operating Officer

Director Finance and Company Secretary

M/s. KPMG Taseer Hadi and Co.,

Tel: (92-61) 4540556-7

UAN: (92-42) 111-786-555

Tel: (92-51) 2610804-07 Fax: (92-51)2610809

F1, First Floor, Institute of Engineers Building, Zarghoon Road,

Pezu, District Lakki Marwat, Khyber Pakhtunkhwa

2) 58 Kilometers on Main Super Highway, Gadap Town,

2. Increasing our share in International market

The Institute of Management Sciences (Pak-AIMS)

The Institute of Management Sciences (Pak-AIMS)

Karachi Chamber of Commerce and Industry:

Leadership As Solid As Concrete

The Institute of Management Sciences (Pak-AIMS)

Ultrasound facility at Mother and Child Health Care Centre

The Institute of Management Sciences (Pak-AIMS)

Model Village in DI Khan

Scholarship Program for the students of Pezu

World-Class Primary School in Darra Pezu

The Institute of Management Sciences (Pak-AIMS)

establish a primary school, which will later be expanded to secondary education

Lucky City School Pezu

DI Khan Airport Renovation

The company also took responsibility of the renovation of DI Khan Airport as a

Development of the Company

The Institute of Management Sciences (Pak-AIMS)

Listed on Karachi, Lahore and Islamabad Stock Exchanges

The Institute of Management Sciences (Pak-AIMS)

CEMENT MANUFACTURING PROCESS

Raw Material Preparation

Finishing, Packaging and Distribution

The Institute of Management Sciences (Pak-AIMS)

PRODUCTS OF THE COMPANY

OPC has easy workability and lower heat

SRC (Sulphate Resistant Cement):

The Institute of Management Sciences (Pak-AIMS)

Lucky CEMENT (REGULAR)

Lucky SULPHATE RESISTANT CEMENT (SRC)

and environmental consequences of their actions.

The Institute of Management Sciences (Pak-AIMS)

The Institute of Management Sciences (Pak-AIMS)

The Institute of Management Sciences (Pak-AIMS)

Lucky Cement ; 20%

Bestway Cement ; 11%

The Institute of Management Sciences (Pak-AIMS)

The Institute of Management Sciences (Pak-AIMS)

Pakistan Business Council (PBC)