MIRA INFORM REPORT

Report Date :

06.09.2014

IDENTIFICATION DETAILS

Name :	LUCKY CEMENT LIMITED

Registered Office :	6-A, Muhammad Ali Housing Society, A. Aziz Hashim Tabba Street, Karachi

Country :	Pakistan

Financials (as on) :	30.06.2013

Date of Incorporation :	1993

Com. Reg. No.:	0031182

Legal Form :	Public Limited Company

Line of Business :	Subject is engaged in manufacturing, selling and marketing of cement

No. of Employees	3,267

RATING & COMMENTS

MIRA’s Rating :

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Status :	Satisfactory
Payment Behaviour :	No Complaints
Litigation :	Clear

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – June 1, 2014

Country Name

Previous Rating

(31.03.2014)

Current Rating

(01.06.2014)

Pakistan

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

PAKISTAN - ECONOMIC OVERVIEW

Decades of internal political disputes and low levels of foreign investment have led to slow growth and underdevelopment in Pakistan. Agriculture accounts for more than one-fifth of output and two-fifths of employment. Textiles account for most of Pakistan's export earnings, and Pakistan's failure to expand a viable export base for other manufactures has left the country vulnerable to shifts in world demand. Official unemployment was 6.6% in 2013, but this fails to capture the true picture, because much of the economy is informal and underemployment remains high. Over the past few years, low growth and high inflation, led by a spurt in food prices, have increased the amount of poverty. As a result of political and economic instability, the Pakistani rupee has depreciated more than 40% since 2007. The government agreed to an International Monetary Fund Standby Arrangement in November 2008 in response to a balance of payments crisis. Although the economy has stabilized since the crisis, it has failed to recover. Foreign investment has not returned, due to investor concerns related to governance, energy, security, and a slow-down in the global economy. Remittances from overseas workers, averaging about $1 billion a month since March 2011, remain a bright spot for Pakistan. However, after a small current account surplus in fiscal year 2011 (July 2010/June 2011), Pakistan's current account turned to deficit in the following two years, spurred by higher prices for imported oil and lower prices for exported cotton. Pakistan remains stuck in a low-income, low-growth trap, with growth averaging about 3.5% per year from 2008 to 2013. Pakistan must address long standing issues related to government revenues and energy production in order to spur the amount of economic growth that will be necessary to employ its growing and rapidly urbanizing population, more than half of which is under 22. Other long term challenges include expanding investment in education and healthcare, adapting to the effects of climate change and natural disasters, and reducing dependence on foreign donors.

Source : CIA

Company Name

LUCKY CEMENT LIMITED

Full Address

Registered Address

6-A, Muhammad Ali Housing Society, A. Aziz Hashim Tabba Street, Karachi, Pakistan

Tel #	92 (21) 111-786-555
Fax #	92 (21) 34534302

Short Description Of Business

a.	Nature of Business	Principally engaged in manufacturing, selling and marketing of cement
b.	Year Established	1993
c.	Registration #	0031182

Distribution Network

Mainly exist at major cities of Pakistan

Factory Location

(1) Pezu District, Lakki Marwat, NWFP, Pakistan.

(2) 58 Kilometers on Main Super Highway, Gadap Town, Karachi, Pakistan.

Auditors

Ernst & Young Ford Rhodes Sidat Hyder

(Chartered Accountants)

Legal Status

Subject Company was established as a Public Limited Company in 1993 and is listed at all stock exchanges of Pakistan

Details of Management

Names

Designation

Mr. Muhammad Yunus Tabba

Mr. Muhammad Ali Tabba

Mr. Muhammad Sohail Tabba

Mr. Jawed Yunus Tabba

Mrs. Rahila Aleem

Mrs. Zulekha Razzak Tabba

Mr. Muhammad Abid Ganatra

Mr. Tariq Iqbal Khan

Chairman

Chief Executive

Director

Categories of Shareholders

Associated Companies

(1) Gadoon Textile Mills Limited, Pakistan.

(2) Fazal Textile Mills Limited, Pakistan.

(3) Yunus Textile Mills Limited, Pakistan.

(4) Lucky Textile Mills, Pakistan.

(5) Lucky Energy (Private) Limited, Pakistan.

(6) Lucky Knits (Private) Limited, Pakistan.

(7) YB Pakistan Limited, Pakistan.

(8) Aziz Tabba Foundation, Pakistan.

(9) Aziz Tabba Kidney Centre, Pakistan.

Business Activities

Subject Company is principally engaged in manufacturing, selling and marketing of cement.

No. of Employees

3,267

Annual Sales Volume

Years

In Pak Rupees

2012

2013

39,123,147,000/-

43,738,002,000/-

Capacity & Production - Tons

2013 2012

Annual Production Annual Production

Name Plate Name Plate

Capacity Capacity

Cement 7,750,000 6,150,440 7,750,000 5,935,790

Clinker - 5,770,980 - 5,633,811

Exporting Countries

Mainly to India, Iran & Afghanistan

Trade Suppliers (Foreign)

Subject mainly import from Companies belongs to European Countries, China, Korea, Japan, U.S.A. & U.K.

Bankers

(1) Allied Bank Limited, Pakistan.

(2) Askari Bank Limited, Pakistan.

(3) Bank Al-Habib Limited, Pakistan.

(4) Bank Alfalah Limited, Pakistan.

(5) Barclays Bank PLC.

(6) Citibank N.A.

(7) Dubai Islamic Bank (Pakistan) Limited.

(8) Soneri Bank Limited, Pakistan.

(9) Habib Bank Limited, Pakistan.

(10) Habib Metropolitan Bank Limited, Pakistan.

(11) Meezan Bank Limited, Pakistan.

(12) MCB Bank Limited, Pakistan.

(13) NIB Bank Limited, Pakistan.

(14) Standard Chartered Bank (Pakistan) Limited, Pakistan.

(15) United Bank Limited, Pakistan.

Future Outlook

The financial year under review was the best performing year of the Company. Going forward, the consumption of cement in the country is expected to grow due to Government’s allocation of funds towards Public Sector Development Program as announced in the federal budget 2013-14. However, the anticipated increase in the utility cost, weakening of Pak Rupee against US $ and recent interest rate hike by the state bank of Pakistan are some of the key challenges for the next financial year.

Memberships

Federation Pakistan Chamber of Commerce & Industry.

Pakistan Cement Manufacturers Association.

Karachi Chamber of Commerce & Industry.

Foreign Exchange Rates

Currency	Unit	Pakistani Rupee
US Dollar	1	Rs. 101.50
UK Pound	1	Rs. 166.60
Euro	1	Rs. 133.25

Comments

Lucky Cement Limited (LCL) is Pakistan’s 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 Pakistan’s 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 companies 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.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.60.44
UK Pound	1	Rs.98.64
Euro	1	Rs.78.20

INFORMATION DETAILS

Analysis Done by :	SUM

Report Prepared by :	SDA

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
--	NB	New Business	--

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

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