Annual Report 2015
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P 1 20 CULTIVATING annual report 15 GROWTH 6-A Muhammad Ali Housing Society, A Aziz Hashim Tabba Street Karachi-75350, Pakistan Tel: +92-21-111-786-555, +92-21-37130123 l Fax: +92-21-34534302 Email:[email protected] Web: www.lucky-cement.com P 2 CULTIVATING GROWTH For nearly two decades, Lucky Cement has accelerated towards driving positive change; a change that is rooted in our perennial commitment to boost the economic and infrastructural development of our country and elsewhere in the world. On the cover of this year’s annual report, we celebrate the past and reiterate our dedication to the future; our agenda is to cultivate a greater opportunity of growth for everyone – that reflects our values and creates a pathway towards innovation and progress. P 01 CONTENTS Road to Success ............................................................. 02 Report of the Audit Committee ..................................... 66 Vision and Mission ........................................................ 04 Procedings of the last Annual General Meeting ............ 67 Core Values .................................................................... 05 Procedings of the last Extra Ordinary General Meeting .... 67 Business Strategies ........................................................ 06 Calendar of Major Events .............................................. 67 Code of Conduct ............................................................ 07 Awards and Accolades ................................................... 68 Company Information ................................................... 09 Human Resource Excellence .......................................... 70 Company at a Glance ..................................................... 10 Safety & Health.............................................................. 72 Competitive Edge .......................................................... 12 Sustainability ................................................................. 74 Chairman’s Profile ......................................................... 14 Stakeholders’ Engagement ............................................ 84 CEO’s Profile .................................................................. 16 Statement of Compliance .............................................. 88 Board of Directors ......................................................... 18 Review Report to the Members .................................... 90 CEO’s Message ............................................................... 20 Auditors’ Report to the Members ................................. 91 Organogram................................................................... 22 Balance Sheet ................................................................ 92 Senior Management ...................................................... 24 Profit and Loss Account ................................................. 93 Company Profile ............................................................ 26 Cash Flow Statement ..................................................... 94 Group Profile ................................................................. 28 Statement of Changes in Equity .................................... 95 Directors’ Report ........................................................... 30 Notes to the Financial Statements ................................ 96 Six Years at a Glance ...................................................... 48 Auditors’ Report on Analysis of Balance Sheet .............................................. 49 Consolidated Financial Statements ............................. 129 Analysis of Profit and Loss Account ............................... 50 Consolidated Balance Sheet ........................................ 130 Financial Ratios .............................................................. 51 Consolidated Profit and Loss Account ......................... 131 Statement of Value Addition and Wealth Distribution .. 52 Consolidated Cash Flow Statement ............................. 132 Notes on Analysis .......................................................... 53 Consolidated Statement of Changes in Equity ............ 133 Composition of Balance Sheet ...................................... 55 Notes to the Consolidated Financial Statements ........ 134 DuPont Analysis ............................................................. 56 Pattern of Shareholding ............................................... 182 Financials at a Glance .................................................... 57 Notice of 22nd Annual General Meeting ...................... 189 Share Price Sensitivity Analysis ..................................... 58 Form of Proxy .............................................................. 191 Corporate Analysis......................................................... 59 Dividend Mandate ....................................................... 193 Roles of Chairman and CEO ........................................... 63 Glossary ....................................................................... 195 Policies ........................................................................... 64 Jama Punji Information ............................................... 196 P 02 ROAD TO SUCCESS 1996 Started commercial production with a capacity of 1.2 2005 mtpa Brown field expansion at Pezu 1993 by 2.5 mtpa 2007 Incorporated in Became the Pakistan Green field first company 2001 expansion at to export loose Karachi by 2.5 cement by sea Conversion mtpa of Kiln Firing System from Became largest furnace oil to cement producer coal based of Pakistan 2002 1994 1999 Delivered the first export 2006 Listed on Production consignment Karachi, Lahore capacity Invested in and Islamabad increased to 1.5 Cement Export Stock Exchanges mtpa Logistics i.e. Bulkers and Ship loaders Became the largest cement exporter from Pakistan P 03 2015 Installed vertical grinding mills at the Karachi Plant 2011 Started operations of Invested in Tyre 5 MW WHR at Derived Fuel Karachi Power (TDF) Plant to Plant use alternative fuels 2013 Became the Signed a first Pakistani 2009 joint venture Company to Brown Field agreement for receive A+ expansion at setting up of rating from the Karachi Plant cement plant in Global Reporting by another 1.2 DR Congo Initiative mtpa 2012 2014 Started selling Started commercial 2008 electricity to operations of cement HESCO grinding plant in Iraq Set up its own cement storage Signed LOI Initiated 5MW Waste facility at Karachi Port for supply of Heat Recovery Project 2010 electricity to at Karachi Power Conversion of Invested in Waste PESCO Plant Furnace Oil Power Heat Recovery Generation Engines Project at both Signed a Initiated a 1 x 660 to Dual Fuel Engines Karachi and Pezu joint venture MW Coal Fuel Power Cement Plants agreement for Project in Karachi, Got listed on London cement grinding Pakistan Stock Exchange and Further invested on plant in Iraq became the first Logistics on multi- Became the only Cement company purpose trailers Acquired ICI Pakistani Company in Pakistan to issue Pakistan Limited to be listed in Forbes GDRs ‘Asia‘s 200 Best Under a Billion’ list P 04 VISION 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 Our mission is to be a premium cement manufacturer by building a professional organization, having state-of-the-art technology, identify- ing new prospects to reach globally and maintain service and quality standards to cater to the international construction needs with an environment-friendly approach. P 05 CORE VALUES CUSTOMER FOCUSED ETHICS AND INTEGRITY • Quality and Consistency • Prestige • Commitment • Honesty • Customer satisfaction • Uprightness • Fair Practices • Reliability SOCIAL RESPONSIBILITY ENTREPRENEURSHIP • Sustainable Development • Sense of Ownership • Philanthropy • Loyalty • Community Development • Identifying and Capitalizing on Opportunities • Environmentally Conscious • Foresightedness • Proactive Approach • Value Addition and Creation INNOVATION • Business Oriented • Creative Solution • Modernization • Setting Trends EXCELLENCE • Benchmark Practices • Continuous Improvement • Efficient and Effective Performance P 06 BUSINESS STRATEGIES 1. Holding and growing local market share Further reinforcing our strength is what we keep in focus when designing our business strategies for the local market. 2. Increasing our share in the international market Broadening our horizons, we have engaged our resources to the unconventional markets to become accessible to the construction industry worldwide. 3. Efficiency (in terms of cost, energy and resource utilization) Efficiency is reflected in all our business approaches, giving us an edge over our competitors in cost and energy, by the skillful utilization of resources. 4. Sustainable Development (In terms of environmental and social responsibility) 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. P 07 CODE OF CONDUCT It is the fundamental policy of Lucky Cement Limited