LUCKY CEMENT LTD.

Analysis of Financial Statement 1

 LUCKY CEMENT LTD.

Lucky Cement Limited has been sponsored by Yunu

which is one of the largest business groups of the Co
grown up remarkably over the last 50 years. The YB
manufacturing activities including Textile, Spi
Finishing, Stitching and Power Generation. The G
industrial establishments other then Lucky Cement Li

1. Lucky Textile Mills

2. Fazal Textile Mills Limited
3. Gadoon Textile Mills Limited
4. Lucky Energy (Private) Limited
5. Yunus Textile Mills

Lucky Textile Mills - established in 1983

Fully computerized weaving and stitching unit

Consists of 3 weaving plants comprising of 800 lo
3.4 million meter/month Grey fabric capacity, 83
processing and 15 million meters/ annum made up
Power generation capacity 6.20 MW
Expertise in ready-made curtains and accessories

Fazal Textile Mills Limited - established in 1987

One of the top spinning mill in the country wi

Produces 100% Grey Cotton Ring Spun Yarn and
Heather Yarns? ISO – 9001:2000 certified

Gadoon Textile Mills Limited - established in 1988

First of the only two mills in the world producing Co

194,392 installed spindles. Produces high quality Com
Spinning yarn, Core Spun yarn and 100% Grey Cotto
Also has a power plant of 34 MW
OKO – Tex Standard 100 certified

Lucky Energy (PVT) Limited - established in 1993

- Captive power unit

- Supplies uninterruptible power to Lucky Textiles, F
- Textiles & Lucky Knitwear
- Generation capacity of 17.4 MW

Yunus Textile Mills Limited - established in 1998

- State of the art machinery for weaving, printing and

- Self power generation capacity of 14 MW
- 250 Air Jet looms installed
- Completely vertically integrated textile
Analysis of Financial Statement 2
mill
- Major Player in home textile and garment exports
 LUCKY CEMENT LTD.

Analysis of Financial Statement 3

 LUCKY CEMENT LTD.

A BRIEF PROFILE OF MR. ABD

LATE CHAIRMAN OF YUNUS BROTHERS GR

Dynamism, loyalty and a vision to make our cou

nations of the world by bringing in more and more i
transfers – these were some of the many goals set
Executive Mr. A. Razzak Tabba.

Yunus Brothers Group is one of the largest export ho

up remarkably over the last 50 years. The YB Group
manufacturing activities consisting of Spinning, Wea
Stitching. The Group also owns one of the largest c
the second largest yarn manufacturing capacit
manufacturing, the Group is also engaged in Int
commodities.

The Group consists of the following Companies, w

Rs. 27 Billion or US$ 450 Million during year 20
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
6. M/s. Yunus Brothers
7. Lucky Textile Mills
8. Security Electric Power Company Limited

Mr. Abdul Razzak Tabba was the Chairman of YB G

SITARA-I-IMTIAZ on 23rd March, 2005 for Public
Under the leadership of Mr. Abdul Razzak Tabba, the
20 Exports Trophies from the Government of Pa
exports from the Country as well as the highest expo
pertinent to point out that during the financial yea
owned by the Group i.e. Yunus Textile Mills, Lucky
Mills and Fazal Textile Mills have in total exported
Rs. 18 Billion.

Unfortunately, the group lost its dynamic and great

A. Razzak Tabba suffered a heart stroke on 19th May

Mr. A. Razzak Tabba was a Director of National B

involved in policy making of the bank. In addition to
of the board of governors of the Institute of Busines
also a member of academic syndicate of Dow Me
member of advisory committee of Citizen Police L
Saark Health Foundation, ice chairman Kidney Fo
Memon Foundation Community Centre where techn
Analysis of Financial Statement 4
more than 2300 girls every year.

Being very conscious of social responsibility of co

 large, which is engaged in a number of social welf
poor and needy people. The major social welfare
Tabba foundation are “Aziz Tabba Dialysis Centre
The Aziz Tabba LUCKY CEMENT
Kidney CentreLTD.
in Karachi havin
machines serving more than 200 patients every day a
240 patients. The Tabba Heart Institute inaugurate
Shaukat Aziz on 8th March, 2005 is a most modern s
institute, equipped with latest state of art equipment
post surgery procedures.

Mr. A. Razzak Tabba (S.I)

The late Chairman
& Chief Executive
of Lucky Cement

Analysis of Financial Statement 5

 LUCKY CEMENT LTD.

At Lucky Cement we comprehend our core values to be the most significant factor leading to
the existence and growth of this prestigious organization.

How we accomplish our mission is as vital as the mission itself. Thus these values are not
only on paper and pen but lounge deep in the heart of each individual working or associated
with lucky cement.

These values are reflected within the name of LUCKY itself: They are as follows.

L = LEADERSHIP - We don't just innovate industry practices - we are defining the way
business will be done in the future. We are pioneers.

U = UNDERSTANDING - Whereby we understand the demands of cement industry at a

global level, parallel to the needs of people, associated with us in one way or the other.

C = COMMITMENT - One word that sums it all at Lucky Cement is the commitment of
people to quality, relationship and most importantly our customers, who can never be
disappointed at any cost.

K = KONSTANT - The most important element to balance any equation worldwide, at

Lucky Cement we assign the value of Constant with consistency of profits, as profits are
required to sustain and grow any organization. They are in-turn the ultimate measure of
efficiency.

Y = YOU - This attitude is a built-in character. At lucky cement we always maintain, ‘You
first, Me last’ approach, not only to please but to delight our employees, shareholders,
customers, and all the other people who expect a result from Lucky Cement.

Analysis of Financial Statement 6

 LUCKY CEMENT LTD.

To be the leading exporter of cement from Pakistan for the regional countries as well as to explore other
potential export markets. Our future strategy is to explore investment possibilities outside Pakistan in the
cement industry to become a leading global producer.

Exploring and Establishing Export Markets

We have a firm commitment in exploring new markets for sustainable business growth. Lucky Cement has
been successful in establishing its brand in several export markets including Middle East, India, Sri Lanka
and East and South African countries. We are also planning to setup some offshore facilities to further
strengthen our export business on regular basis

Product:

Lucky Cement aims at producing cement to suit every user. The following types of cement
are available:

1. Ordinary Portland Cement

2. Sulphate Resistant Cement
3. Slag Cement

ORDINARY PORTLAND CEMENT (OPC)

Analysis of Financial Statement 7

 LUCKY CEMENT LTD.

Ordinary Portland cement is available in darker shade as well as in light shades in Lucky Star
with different brand names to suit the requirement of users.

It is used in all general constructions especially in major prestigious projects where cement is
to meet stringent quality requirements; it can be used in concrete mortars and grouts etc.
Ordinary Portland cement is compatible/consumable with admixture/ retarders etc.

SULPHATE RESISTANT CEMENT (SRC) Sulphate resistant Cement’s best quality is to

provide effective and long lasting strength against sulphate attacks and is very suitable for
constructions near sea shores as well as for canals linings. It provides very effective
protection against alkali attacks.

SLAG CEMENT Slag cement is also available for specific user requirements. Slag cement,
has been incorporated into concrete projects for over a century to improve durability and
reduce life cycle costs. Among its measurable benefits in concrete are better workability and
finish ability, higher compressive and flexural strengths, and improved resistance to
aggressive chemicals.

BRANDS AVAILABLE AT LUCKY CEMENT

Lucky CEMENT (REGULAR) Lucky STAR

Lucky GOLD Lucky SULPHATE RESISTANT CEMENT (SRC)

Analysis of Financial Statement 8

 LUCKY CEMENT LTD.

Here is the income statement and balance sheet in below boxes. It shows the company sales,
gross profit and net profit. If we see that the sales are increasing with the passage of time but the
cost is same so it decreases the profit margin. The company share capital is same for 6 year so it
means that the company is not issuing the more capital.

Income Statement
Amount in'000' 2004 2005 2006 2007 2008 2009
29078 39801 80541 125218 169578 263304
turnover 07 09 01 61 79 05
18073 26005 50737 884670 126007 165191
cost of sales 53 89 97 8 06 38
11004 13795 29803 36751 43571 98112
gross profit 54 20 04 53 73 67
10348 115505 242783
distribution cost 19599 23817 9 497729 4 7
10674
administrative cost 46751 61355 0 111311 125752 165936
10341 12943 27700 30661 30763 72174
operating profit 04 48 75 13 67 94
123697
finance cost 10842 21691 82809 862847 126743 1
other income / 13429 -
charges 52161 62706 0 487085 643095 803521
profit before 97110 12099 25529 26903 23065 51770
taxation 1 51 76 51 29 02
28533 38336 61702 -
taxation 9 4 6 143059 371141 580453
profit after 68576 82658 19359 25472 26776 45965
taxation 2 7 50 92 70 49

Balance Sheet

Analysis of Financial Statement 9

 LUCKY CEMENT LTD.

Amount in'000' 2004 2005 2006 2007 2008 2009

Share Capital & 43070 513368 706963 935355 186554 232519
Reserve 96 3 3 0 23 72
Non Current 17743 753039 118011 100242 789675 604171
Liabilities 46 0 09 47 4 2
Current 93086 214276 475203 635242 768689 909867
Liabilities 2 3 5 9 7 8
Total Equity & 70123 148068 236227 257302 342390 383923
Liabilities 04 36 77 26 74 62

Non Current 50342 134643 191672 203210 258835 305344

Assets 32 25 83 83 50 20
19780 134251 445549 540914 835552 785794
Current Assets 92 1 4 3 4 2
70123 148068 236227 257302 342390 383923
Total Assets 24 36 77 26 74 62

Vertical Analysis

Income Statement
Vertical Analysis
% 2004 2005 2006 2007 2008 2009
100.0 100.0 100.0 100.0 100.0 100.0
turnover 0 0 0 0 0 0
cost of sales 62.16 65.34 63.00 70.65 74.31 62.74
gross profit 37.84 34.66 37.00 29.35 25.69 37.26
distribution cost 0.67 0.60 1.28 3.97 6.81 9.22
administrative cost 1.61 1.54 1.33 0.89 0.74 0.63
operating profit 35.56 32.52 34.39 24.49 18.14 27.41
finance cost 0.37 0.54 1.03 6.89 0.75 4.70
other income /
charges 0.04 0.02 0.02 -0.04 0.04 0.03
profit before
taxation 33.40 30.40 31.70 21.49 13.60 19.66
taxation 9.81 9.63 7.66 1.14 -2.19 2.20
profit after
taxation 23.56 20.77 24.04 20.34 15.79 17.46

Analysis of Financial Statement 10

 LUCKY CEMENT LTD.

If we see the vertical analysis of the Income statement it shows that the company performance is
decreasing. The issue in decline in the profits of the company is that is world recession,
electricity problems, democracy, and increase in the cost due to the increase in the raw material
prices.

Balance Sheet
Share Capital &
Reserve 61.42 34.67 29.93 36.35 54.49 60.56
Non Current
Liabilities 25.30 50.86 49.96 38.96 23.06 15.74
Current
Liabilities 13.27 14.47 20.12 24.69 22.45 23.70
Total Equity & 100.0 100.0 100.0 100.0 100.0
Liabilities 0 0 0 0 0 100.00

Non Current
Assets 71.79 90.93 81.14 78.98 75.60 79.53
Current Assets 28.21 9.07 18.86 21.02 24.40 20.47
100.0 100.0 100.0 100.0 100.0
Total Assets 0 0 0 0 0 100.00

In the analysis of the Balance sheet we see that the current assets are increasing with the passage
of time and there is a heavy amounts of the current assets which shows the negative image. As
the more current assets shows the more liquidity but in this case its more access.

Horizontal Analysis

Income Statement
In %age 2004 2005 2006 2007 2008 2009
176.9 330.6 483.1
turnover 100 36.88 8 3 8 805.51
180.7 389.4 597.1
cost of sales 100 43.69 3 8 9 814
170.8 233.9 295.9
gross profit 100 25.36 2 7 4 791.57
428.0 2439. 5793. 12287.
distribution cost 100 21.52 3 56 43 55
128.3 138.0 168.9
administrative cost 100 31.24 2 9 8 254.94
operating profit 100 25.17 167.8 196.5 197.4 597.95

Analysis of Financial Statement 11

 LUCKY CEMENT LTD.

7 9
100.0 663.7 7858. 11309.
finance cost 100 6 8 37 1069 07
-
157.4 1033. 1132. 1440.4
other income / charges 100 20.22 5 81 9 6
177.0 137.5
profit before taxation 100 24.6 162.9 4 2 433.11
-
116.2 230.0
taxation 100 34.35 4 -49.86 7 103.43
182.3 271.4 290.4
profit after taxation 100 20.54 1 6 7 570.28

Horizontal analysis (2) 05 vs 06 vs 07 vs 08 vs 09 vs

year vs year % 2004 04 05 06 07 08
102.3
turnover 100 35.88 6 55.47 35.43 55.27
cost of sales 100 43.89 95.1 74.36 42.37 31.1
116.0
gross profit 100 25.36 4 23.31 18.71 125.18
334.5 380.9 132.0
distribution cost 100 21.52 2 5 6 110.19
administrative cost 100 31.24 73.97 4.28 17.96 31.95
114.0
operating profit 100 25.17 1 10.69 0.33 134.61
100.0 281.7 941.9
finance cost 100 6 7 7 -85.31 875.97

Now if we see the horizontal analysis of the income statement shows that the according to the
base year 2005 the sales are improving with the passage of time. Due to the increase in the cost
of goods in 2009 the gross profit decline. And it shows that the cost of raw material has been
increased day by day.

Analysis of Financial Statement 12

 LUCKY CEMENT LTD.

Balance Sheet
In % age 2004 2005 2006 2007 2008 2009
100.0 117.1 333.1
Share Capital & Reserve 0 19.19 64.14 7 3 439.85
100.0 324.4 565.1 464.9 345.0
Non Current Liabilities 0 0 0 5 5 240.50
100.0 130.1 410.5 582.4 725.7
Current Liabilities 0 9 0 2 8 877.45
100.0 111.1 236.8 266.9 388.2
Total Equity & Liabilities 0 6 8 3 7 447.50

100.0 167.4 280.7 303.6 414.1

Non Current Assets 0 6 4 6 5 506.54
100.0 125.2 173.4 322.4
Current Assets 0 -32.13 4 5 0 297.25
100.0 111.1 236.8 266.9 388.2
Total Assets 0 5 8 3 7 447.50

horizontal analysis(2) 05 vs 06vs 07 vs 08 vs 09 vs

year vs year % 2004 04 05 06 07 08
100.0
Share Capital & Reserve 0 19.19 37.71 32.31 99.45 24.64
100.0 324.4
Non Current Liabilities 0 0 56.71 -15.06 -21.22 -23.49
100.0 130.1 121.7
Current Liabilities 0 9 7 33.68 21.01 18.37
100.0 111.1
Total Equity & Liabilities 0 6 59.54 8.92 33.07 12.13

100.0 167.4
Non Current Assets 0 6 42.36 6.02 27.37 17.97
100.0 231.8
Current Assets 0 -32.13 8 21.40 54.47 -5.96
100.0 111.1
Total Assets 0 5 59.54 8.92 33.07 12.13

The balance sheet shows that the assets are increasing with the time and if we see fixed assets are
increased but in 2009 the assets decrease. But it also increases in the cash and bank. The share
capital is same in the 5 year the long term liabilities are increased with increasing ratio but in
2009 it also decreases.

Analysis of Financial Statement 13

 LUCKY CEMENT LTD.

Ratio Analysis
Description 2004 2005 2006 2007 2008 2009
Profitability Ratio
%

Gross profit to sales Percent 37.84 34.66 37 29.35 25.73 37.26

EBITDA to sales Percent 42.97 38.5 39.58 31.54 23.57 31.51
Net profit after tax to
sales Percent 23.58 20.77 24.04 20.34 15.79 17.46
ROE after tax Percent 15.92 16.1 27.38 27.23 14.35 19.77
Return on capital
employed Percent 11.28 6.53 10.26 13.15 10.08 15.69

Solvency/ Debt
Ratio

Debt Equity ratio times 0.63 1.88 2.34 1.75 0.84 0.65
Interest coverage
ratio times 95.38 59.67 33.45 3.55 24.27 5.83

Operating/ Activity
Ratios

Inventory turnover Times 12.58 18.06 18.54 15.97 18.18 17.33

No. of days in
inventory Days 29.01 20.21 19.69 22.86 20.08 21.06
Creditor Turn over Times 5.96 5.37 4.91 5.9 4.95 5.31
No. of days in
payables Days 61.22 67.92 74.3 61.84 73.81 68.79
Operating cycle Days -32.21 -47.71 -54.61 -38.99 -53.73 -47.73
Total assets turnover Percent 41.47 26.88 34.09 48.67 49.53 68.58
Fixed assets turnover Percent 57.76 29.56 42.02 61.62 65.52 86.23

Analysis of Financial Statement 14

 LUCKY CEMENT LTD.

Liquidity Ratios

Current ratios Percent 2.12 0.63 0.94 0.85 1.09 0.86

Quick/ Acid test ratio Percent 1.94 0.57 0.85 0.75 1 0.73
Investment valuation Ratios
EPS ratio (after tax) Rs. 2.8 3.14 7.35 9.67 9.84 14.21
P/E ratio (after tax) Rs. 13.97 13.51 13.66 12.72 9.96 4.12
Cash dividend per
share Rs. _ _ 1 1.25 _ 4
Dividend Yield Percent _ _ 1 1.02 _ 6.83
Dividend Payout ratio Percent _ _ 13.61 12.93 _ 28.15
Dividend Cover Ratio Times _ _ 7.35 7.74 _ 3.55
Market Value Per 100.4 123.0
Share Rs. 39.1 42.39 2 4 97.93 58.53
Rs. In
EBITDA Million 1249 1532 3188 3949 4055 8366

The ratios are calculated as above shows the company performance. We can explain them with
the help of graph.

Profitability Ratio

The gross profit decrease with the time docline and lowest in 2008 shows that the profit decrese.
And the profit is increase in the 2009 year.

Analysis of Financial Statement 15

 LUCKY CEMENT LTD.

Debt ratios

As you see in 2007 total debt is highest and the interest coverage ratio times is high in whole
ratios.

Operating Cycle and Inventory Ratios

As you see no. of days in payable increse the limit of 50. Operating cycle shows in negative.
Which shows the company performace good. And the no of days inventory payable is at the zero
point which mean that the company is unsing the just in time inventory system.

Analysis of Financial Statement 16

 LUCKY CEMENT LTD.

Assets Management Ratios

As you see fixed assets turnover decrease in 2005 which mean that the company current asset
turnover is high and the company is more liquide. And in the 2009 fixed asset turnover is
highest.

As you see inventory turnover is gratually more than 10 days and creditor turnover times is less
than 5 days in whole year.

Current and Quick Ratios

Analysis of Financial Statement 17

 LUCKY CEMENT LTD.

As you see the current ratios decrease in 2004 due to the low current assets and high inventory
level. We ca see the it increase in 2008 but decrease in 2009.

Analysis of Financial Statement 18