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Presented To:

Mr. Hamza
Mukhtar

Presented By:
 Mubashar Sharif
 Umer Shahzad
Maple Leaf Cement
Factory Limited
Company Introduction
 Came into being on 1st July 1992

MLCF

WCIL Kohinoor Group

PCGL

MLCFL
Financial Statements Analysis
Analysis could be performed in three ways,

Economic Analysis

Industry Analysis

Firm Analysis
1.Economic Analysis

Economic indicators:
GDP growth
Inflation
Per Capita Income ($1085,Rs.7142)
Real GDP Growth
The real GDP growth in financial year 2008 is found to be 5.8
percent that was expected at 7.2 percent.
This deficiency is due to:
 Unexpected weakness in commodity producing sectors,

leads to the revival of inflationary pressure.


 High energy cost.

 Large external current account deficit.

Trade balance $1.96 bn


Exports $1.53 bn

Imports $2.72 bn
Inflation
The inflation rate in the economy in financial
year 2008 is 10.5 percent that is very high as
compared to the last year 7.8 percent.
 Low Demand

 Inability to reduce prices of petroleum

products.
 High international commodity prices

 Domestic demand for construction inputs (e.g.

metal, copper,etc.)
 Oil prices changes

 Inflationary pressures

 Higher interest rates.

 High international commodity prices


(e.g. steel, wheat etc.)
Prevailing inflation rates

INFLATION RATE

20

15
2005-06H
10 2006-07H
2007-08H
5

0
CPI Food Group Non Food
Group
Industry
Analysis
Learning Objective in Industry
Analysis
 To determine the opportunities and threats that
exists for firms within a competitive
environment.
 When analyzing an industry, taking all factors
into account, should we as a corporation, enter
this industry? The end result will be an
understanding of what it takes to compete
successfully.
Forces

 Threat of New Entrants

 Suppliers

 Buyers

 Substitute Products
Obstacles of Growth of Local
industry

 Expensive New Technology


 Lack of Trained Teachers
 Lack of skilled Personnel
 Government Regulations
 Economic Situations
Attract New Firm in Industry
 Government Rules & Regulations

 Policy must be set for the investors in the


industry in case of taxation.

 Availability of skilled Labor

 Cheaper new technology


Affect on Industry and Firm
 GDP growth decreased the growth of per
capita cement consumption from 22.2% in
FY07 to 2.9% in FY08.
 Pakistan’s Cement sector is correlated to GDP
growth.
 In the past years, Pakistan’s cement sector
witnessed a robust growth due to the country’s
strong economic growth.
 However, in FY08, lower GDP growth has
affected the construction activity in the
country and thus affected the demand for
cement in local market.
 Sales volume achieved during the first quarter
was 749,492 mt of grey cement, 18,664 mt
white cement.(FY08-373,830..FY07-15003)
 Despite these high sales volume, the company
suffered losses.
Reasons of losses
 Higher production costs.
 Due to inflationary spiral afflicting our
economy.
 Huge input cost of coal.
 Rapid depreciation in exchange rate and
mounting interest rate.
 Which adversely affected operating margins of
company.
 High federal and provisional taxes
 Very low selling prices
 Cut throat domestic competition
 High export expenses
 Exorbitant fuel cost
 Rise in electricity charges
Cost of production
Fuel and power

raw material
20%
salaries
40%
depreciation
11%

other overhead
6%
10%
3% 10% admin and
selling
finacial charges
Firm
Analysis
Maple Leaf Cement
Factory Limited
Mission Statement

“The Maple Leaf Cement Factory Limited stated mission


is to achieve and then remain as the most progressive and
profitable company in Pakistan in terms of industry
standards and stakeholders interests”
Board of Directors
 Mr. Tariq Sayeed Saigol (Chairman)
 Mr. Sayeed Tariq Saigol (Chief Executive)
 Mr. Waleed Tariq Saigol
 Ms. Jahanara Saigol
 Mr. S. M. Imran
 Mr. Zamiruddin Azar
Sales Graph

Total Sale Local & Export Sale


10000000
5000000
8000000
4000000
6000000
Sale

3000000 Export
4000000
2000000 Local
2000000
1000000
0
2008 2007 2006
0
2008 2007
Years
Liquidity Ratios

Ratios 2009 2008 2007

Current Ratio 0.51:1 0.81 :1 1.08:1

The decrease in ratio of FY08 is due to the increase in


current liabilities (96%) while current assets were
increased only by 48%.
Current Ratio Graph

CURRENT RATIO

1.50

1.00
TIMES

Series1
0.50

-
2004 2005 2006 2007 2008
YEARS
Profitability Ratios
Ratios 2008 2007 2006

Gross Profit Margin 16.94% 8.35% 37.63%

Net Profit Margin -8.65% 1.13% 18.55%

Return on Asset -2.59% 0.18% 5.53%

Return on Equity -8.09% 0.47% 14.02%


Profitability Ratios
 The Profit of MLCFL declined drastically because of an
excess supply situation in industry and falling net
retention prices.
 Financial charges formed 20% of production cost
increased by 96% because of the increse interest rate in
the economy.
profit (loss) afte r taxation

1,200,000

900,000

600,000

300,000
Series 1
-

(300,000) 2,006 2,007 2,008

(600,000)

(900,000)
0
700000
1400000
2100000
2800000
3500000
4200000
Fuel &power

Raw
&packing
Material

Salaries

Depreciation
&
Amortization

Admin &
Selling
Production cost (2007& 2008)

Financial
charges
2008
2007
Asset Management Ratios
Ratios 2008 2007 2006

Inventory turnover 14.96 9.20 17.72


Ratio

Days to sell inventory 24.06 39.13 20.31

Days sale Outstanding 34.24 18.88 10.31

Operating Cycle 58.30 58.01 30.62

Total asset turnover 0.30 0.16 0.30


Asset Management
 The inventory turnover rate increase showing
that it took lesser days for the company to sell
its stock trade. However the company average
collection period of account receivable
increase and so did its operating cycle.
 The total asset turnover ratio Improved in
FY08 indicating that the company was able to
generate sufficient sales volume given it total
asset investment.
Asset Management Graph

Asset management

70.00
60.00 Days sales
50.00 outstanding
40.00 Inventory Turnover in
times

30.00 Days
20.00 operating cycle(days)
10.00
-
2008 2007 2006 2005
ye ars
Debt Management Ratios

Ratios 2008 2007 2006

Debt to asset 0.68 0.62 0.61

Debt / Equity (times) 2.13 1.61 1.53

Time interest earned (times) 0.25 0.59 5.79

Long Term debt to equity 0.03 0.98 1.04


Debt Management
 Firms profitability decline when economy
takes a downturn and in tight monitory policy.
 As interest rate increase in FY08 the cost of
borrowing for the firm has increased.
 The firm can’t pay for its expenses through
earnings and will have to take extra debt to
pay its obliogation.
Debt Management Graph

Debt Management

7.00
6.00
5.00
Debt To Asset
4.00
Debt To Equity
3.00
Time interst earned
2.00
1.00
-
2005 2006 2007 2008
years
BALANCE SHEET
Rupees in “000”
Non Current Assets 2008 2007 2006

Property, Plant And Equipment 20,081,448 19,330,866 16,088,505

Intangible Assets 15,082 4,578 -

Investments - - 368,881

Loans to employees 6,121 6,373 7,127

Deposits and prepayments 54,014 43,200 15,923

Total 20,156,665 19,385,017 16,480,436


BALANCE SHEET

Current Assets 2008 2007 2006

Stores,Spare and loose tools 33,25,744 2,014,580 1,847,926

Stock in trade 433,952 369,709 200,946

trade debts 743,366 194,587 163,459

Fair value derivative financial 365,748 242,226 -


instruments
Loans and advances 82,814 85,544 299,257

Investments 734,859 944,669 -


BALANCE SHEET
Current Assets 2008 2007 2006
Deposits and short term 54,532 15,373 7,314
prepayments

Accrued profit 763 402 559


Sale tax, customs and excise duty 57,769 37,742 34,611

Due from gratuity fund trust 9,768 8,539 -

Other receivables 21,780 1,198 9,452

Taxation - net 44,907 14,029 -

Cash and bank balances 118,894 123,359 100,938

TOTAL ASSETS 5,994,896 4,051,957 2,664,462


BALANCE SHEET
EQUITY AND LIABILTIES 2008 2007 2006

Share Capital and Reserves


Authorized Capital 5,000,000 5,000,000 5,000,000

Issued, subscribed and paid up 4,264,108 4,264,108 3,519,581


capital

Reserves 4,644,355 4,457,328 3,063,529

Unappropriated profit (547,574) 271,601 972,594

Total Equity 8,360,889 8,993,037 7,555,704


BALANCE SHEET
NON - CURRENT 2008 2007 2006
LIABILTIES

Loans from related parties 35,224 250,000 -

Long Term loans and finance 241,539 8,576,657 7,868,948

Redeemable capital 8,000,000 - -

Syndicated term finance 1,000,000 - -

Liabilities against assets subject 957,434 268,040 12,226


to finance lease
BALANCE SHEET
NON - CURRENT 2008 2007 2006
LIABILTIES

Lease finance advances and - 979,676 76,146


accured interest thereon

Long Term deposits 2,582 2,702 2,977

Deferred taxation 154,741 897,183 971,128

Employee' compensated 16,688 13,192 10,250


absences

TOTAL NON -CURRENT 10,408,208 10,687,450 8,939,675


LIABILTIES
BALANCE SHEET
CURRENT LIABILTIES 2008 2007 2006
Current portion of:
redeemable capital - - 41,650

Long Term loans and finances - 1,792,519 538,530

syndicated term finance 1,080,000 - -

Liabilities against assets subject 188,011 13,858 4,481


to finance lease
BALANCE SHEET
CURRENT LIABILTIES 2008 2007 2006

Short term finance 3,369,738 797,585 947,160

Trade and other payable 2,495,559 719,311 752,172

Accured profit and interest / 194,568 378,675 279,112


mark-up

Taxation -net - - 31,828

Dividends 54,588 54,539 54,586

TOTAL EQUITY AND 26,151,561 23,436,974 19,144,898


LIABILTIES
BALANCE SHEET
CURRENT LIABILTIES 2008 2007 2006

Short term finance 3,369,738 797,585 947,160

Trade and other payable 2,495,559 719,311 752,172

Accured profit and interest / 194,568 378,675 279,112


mark-up

Taxation -net - - 31,828

Dividends 54,588 54,539 54,586

TOTAL EQUITY AND 26,151,561 23,436,974 19,144,898


LIABILTIES
INCOME STATEMENT
2008 2007 2006

Sale 7,815,829 3,711,081 5,709,792

Less: cost of sale (6,491,999) (3,401,188) (3,561,212)

Gross profit 1,323,830 309,893 2,148,580

Administrative expenses (121,236) (67,291) (60,474)

Distribution cost (834,849) (69,021) (20,961)

Other operating expenses (24,838) (18,371) (118,024)


INCOME STATEMENT
2008 2007 2006
Other operating income 105,656 43,224 26,671

Operating profit from operation 448,563 198,434 1,975,792

Finance cost (1,812,807) (338,453) (340,978)

Profit / (Loss) before taxation (1,364,244) (140,019) 1,634,814

Taxation
Current: 44,815 (94,77) (28,536)
Deferred: (732,924) (172,589) (547,038)

Profit (loss) after taxation (676,135) (42,047) (1,059,240)

Earning Per Share (1.96) (0.03) 3.38


COMMON SIZE
ANALYSIS
BALANCE SHEET

Non Current Assets 2008 2007 2006

Property, Plant And Equipment 76.79% 82.48% 84.04%

Intangible Assets 0.06% 0.02% 0.00

Investments 0.00 0.00 1.93%

Loans to employees 0.02% 0.03% 0.04%

Deposits and prepayments 0.21% 0.18% 0.08%


BALANCE SHEET

Current Assets 2008 2007 2006

Stores, Spare and loose tools 12.72% 8.60% 9.65%

Stock in trade 1.66% 1.58% 1.05%

trade debts 2.84% 0.83% 0.85%

Fair value derivative financial 1.40% 1.03% 0.00


instruments
Loans and advances 0.32% 0.36% 1.56%

Investments 2.81% 4.03% 0.00


BALANCE SHEET
Current Assets 2008 2007 2006
Deposits and short term 0.0029% 0.07% 0.04%
prepayments

Accrued profit 0.22% 0.0017% .0029%


Sale tax, customs and excise duty 0.04% 0.16% 0.18%

Due from gratuity fund trust 0.04% 0.04% 0.00

Other receivables 0.08% 0.01% 0.05%

Taxation - net 0.17% 0.06% 0.00

Cash and bank balances 0.45% 0.53% 0.53%

TOTAL ASSETS 100% 100% 100%


BALANCE SHEET
EQUITY AND LIABILTIES 2008 2007 2006

Share Capital and Reserves


Authorized Capital ---------- ----------- ------------

Issued, subscribed and paid up 16.31% 18.19% 18.38%


capital

Reserves 17.76% 19.02% 16.00%

Unappropriated profit -2.09% 1.16% 5.08%

Total Equity 31.97% 38.37% 39.47%


BALANCE SHEET
NON - CURRENT 2008 2007 2006
LIABILTIES

Loans from related parties 0.13% 1.07% 0.00

Long Term loans and finance 0.92% 36.59% 41.10%

Redeemable capital 30.59% 0.00 0.00

Syndicated term finance 3.82% 0.00 0.00

Liabilities against assets subject 3.66% 1.14% 0.06%


to finance lease
BALANCE SHEET
NON - CURRENT 2008 2007 2006
LIABILTIES

Lease finance advances and 0.00 2.90% 0.39%


accured interest thereon
Long Term deposits 0.01% 0.01% 0.02%

Deferred taxation 0.59% 3.83% 5.07%

Employee' compensated 0.065 0.06% 0.05%


absences
BALANCE SHEET
CURRENT LIABILTIES 2008 2007 2006
Current portion of:
redeemable capital 0.00 0.00 0.22%

Long Term loans and finances 0.00 7.65% 2.81%

syndicated term finance 4.13% 0.00 0.00

Liabilities against assets subject 0.72% 0.06% 0.02%


to finance lease
BALANCE SHEET
CURRENT LIABILTIES 2008 2007 2006

Short term finance 12.89% 3.40% 4.95%

Trade and other payable 9.54% 3.07% 3.93%

Accured profit and interest / 0.74% 1.62% 1.46%


mark-up

Taxation -net 0.00 0.00 0.17%

Dividends 0.21% 0.23% 0.29%

TOTAL EQUITY AND 100% 100% 100%


LIABILTIES
INCOME STATEMENT
2008 2007 2006

Sale 100% 100% 100%

Less: Cost of sale 83.06% 91.65% 62.37%

Gross profit 16.94% 8.35% 37.63%

Administrative expenses 1.55% 1.81% 1.06%

Distribution cost 10.68% 1.86% 0.37%

Other operating expenses 0.32% 0.50% 2.07%


INCOME STATEMENT
2008 2007 2006
Other operating income 1.35% 1.16% 0.47%

Operating profit from operation 5.74% 5.35% 34.60%

Finance cost 23.19% 9.12% 5.97%

Profit / (Loss) before taxation -17.45% -3.77% 28.63%

Taxation
Current: 0.57% 0.26% 0.50%
Deferred: 9.38% 4.655 9.58%

Profit (loss) after taxation -8.65% 1.13% 18.55%


INDEX
ANALYSIS
BALANCE SHEET

Non Current Assets 2008 2007 2006

Property, Plant And Equipment 124.82% 120.15% 100%

Intangible Assets 0.00 0.00 0.00

Investments 0.00 0.00 100%

Loans to employees 85.88% 89.42% 100%

Deposits and prepayments 339.22% 271.31% 100%


BALANCE SHEET

Current Assets 2008 2007 2006

Stores, Spare and loose tools 179.97% 109.02% 100%

Stock in trade 215.95% 183.98% 100%

trade debts 454.77% 119.04% 100%

Fair value derivative financial 0.00 0.00 0.00


instruments
Loans and advances 27.67% 28.59% 100%

Investments 0.00 0.00 0.00


BALANCE SHEET
Current Assets 2008 2007 2006
Deposits and short term 745.58% 210.19% 100%
prepayments

Accrued profit 136.49% 71.91% 100%


Sale tax, customs and excise duty 166.91% 109.05% 100%

Due from gratuity fund trust 0.00% 0.00 0.00

Other receivables 230.43% 12.67% 100%

Taxation - net 0.00 0.00 0.00

Cash and bank balances 117.79% 122.21% 100%

TOTAL ASSETS 136.60% 122.42% 100%


BALANCE SHEET
EQUITY AND LIABILTIES 2008 2007 2006

Share Capital and Reserves


Authorized Capital ---------- ----------- ------------

Issued, subscribed and paid up 121.15% 121.15% 100%


capital

Reserves 151.60% 145.50% 100%

Unappropriated profit -56.30% 27.93% 100%

Total Equity 110.66% 119.02% 100%


BALANCE SHEET
NON - CURRENT 2008 2007 2006
LIABILTIES

Loans from related parties 0.00 0.00 0.00

Long Term loans and finance 3.07% 108.99% 100%

Redeemable capital 0.00 0.00 0.00

Syndicated term finance 0.00 0.00 0.00

Liabilities against assets subject 7831.13% 2192.38% 100%


to finance lease
BALANCE SHEET
NON - CURRENT 2008 2007 2006
LIABILTIES

Lease finance advances and 0.00 916.67% 100%


accured interest thereon
Long Term deposits 86.73% 90.76% 100%

Deferred taxation 15.93% 92.39% 100%

Employee' compensated 162.81% 128.70% 100%


absences
BALANCE SHEET
CURRENT LIABILTIES 2008 2007 2006
Current portion of:
redeemable capital 0.00 0.00 100%

Long Term loans and finances 0.00 332.85% 100%

syndicated term finance 0.00 0.00 0.00

Liabilities against assets subject 4195.74% 309.26% 100%


to finance lease
BALANCE SHEET
CURRENT LIABILTIES 2008 2007 2006

Short term finance 355.77% 84.21% 100%

Trade and other payable 331.78% 95.63% 100%

Accured profit and interest / 69.71% 135.67% 100%


mark-up

Taxation -net 0.00 0.00 100%

Dividends 100.004% 99.91% 100%

TOTAL EQUITY AND 136.60% 122.42% 100%


LIABILTIES
INCOME STATEMENT
2008 2007 2006

Sale 136.88% 65% 100%

Less: Cost of sale 182.30% 95.51% 100%

Gross profit 61.61% 14.42% 100%

Administrative expenses 200.48% 111.27% 100%

Distribution cost 3982.87% 329.28% 100%

Other operating expenses 21.04% 15.57% 100%


INCOME STATEMENT
2008 2007 2006
Other operating income 396.15% 162.06% 100%

Operating profit from operation 22.70% 10.04% 100%

Finance cost 531.65% 99.26% 100%

Profit / (Loss) before taxation -83.45% -8.56% 100%

Taxation
Current: -157.05% 33.21% 100%
Deferred: 133.98% 31.55% 100%

Profit (loss) after taxation -63.83% 3.97% 100%


The End