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MAPLI LIAI CIMINT


"IINAL PROJICT
ON IIASIBLITY RIPORT







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FINAL PRO1ECT OF CORPORATE FINANCE

Submitted to :
Prof. Abdul Khaliq
Submitted by :
Sana Shahid (8304)
Moona Khadim(8402)
Iram Noor(8357)

Submission Date:
28
th
April 2011


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Table of Content
Company profile
istory
SWOT Analysis
PEST Analysis
Ratio Analysis
Trend Analysis
Projected Financials
Feasibility Report
Appendices


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Mission Statement

'The Maple LeaI Cement Factory Limited stated mission is to achieve and then remain as the
most progressive and proIitable company in Pakistan in terms oI industry standards and
stakeholders interests. The company shall achieve its mission through a continuous process oI
having sourced and implemented the best leading edge technology, industry best practice, and
human resource and by conducting its business proIessionally and eIIiciently with responsibility
to all its stakeholders and community.

Corporate Strategy

We at Maple LeaI Cement Factory Limited manuIacture and market diIIerent types oI
consistently high quality cement, according to the demanding requirements oI the construction
industry. Our strategy is to be competitive in the market through quality and eIIicient operations.
As a responsible member oI the community, we are committed to serve the interest oI all our
stakeholders and contribute towards the prosperity oI the country.








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INTROLCTION

istory and Background
The Cement Industry:
n August 1947, Pakistan inherited Iour cement plants having total installed capacity oI 0.471
million tons per annum and total production oI 0.300 million tons.
By 1953-54, the production increased to 0.660 million tons against demand oI one million tons.
As the private sector did not have resources, the public sector in the Iorm oI Pakistan ndustrial
Development Corporation (PDC) took the lead and established two cement plants Maple LeaI
and Zeal Pak. These units came into production in 1956, increasing the production capacity to
one million tons per annum. By mid-sixties, the private sector acquired suIIicient conIidence,
expertise & capital and established the Iollowing three plants:
Valika Cement (now Javedan) in Karachi in 1964
smail Cement (now Gharibwal) at Gharibwal in 1965 and
Pak Cement (now Mustehkam) at Hattar in 1965.
Nationalization:
Under the Economic ReIorms Order, all private sector cement plants were nationalized in 1972
and State Cement Corporation oI Pakistan (SCCP) was Iormed to manage cement plants.
nstalled production capacity was substantially expanded during this period. The capacity oI
Javedan and Mustehkam were doubled and new plants were installed at Thatta, Dandot, Kohat,
D.G.Khan and Daudkhel. As a result, total production capacity expanded by 2.45 million tons
per annum.
During this period, growth in demand oI cement was around 7 percent per annum. New
capacities were not coming up to match the demand. Consequently, Pakistan had to start
importing cement in 1976-77 and continued to import cement till 1994-95.
Kohinoor Maple Leaf Group:
The Kohinoor Maple LeaI Group (KMLG) is one oI the largest groups in Pakistan. t is one oI
the leading manuIacturers oI the country with a composite textile unit, two weaving units, two
dyeing units and one spinning unit aside Irom its cement operations

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The group also has presence in power generation, and insurance sectors consisting oI a total oI
seven group companies, all oI which are SO 9002 certiIied. n 1999, KMLG entered into a
contract with oracle to upgrade all Management nIormation Systems including the integration oI
its Iinancials, cost and management accounting, production, marketing, and human resource
Iunctions. Out oI 7 companies oI KMLG, 5 are listed on the stock exchanges in Pakistan with
operations comprising oI vertically integrated textile operations, power generation, and cement
production.
KOINOOR MAPLE LEAF CEMENT
Maple LeaI is one oI the pioneers oI the cement industry in Pakistan. t owns and operates grey
and white cement plants located at Daudkhel District Mianwali.
istory
Maple leaI Cement Factory Limited was established by the Pakistan ndustrial Development
Corporation (PDC) in 1956. t was later incorporated as 'Maple LeaI Factory Limited in April
1960. The company started as a producer oI grey Portland cement, with a wet process plant oI
400 tons per day ('tpd) clinker capacity installed with the assistance oI the Canadian
Government, in 1960 a second wet process plant Portland cement was installed with a clinker
capacity oI 600 tpd.n 1969, a company by the name oI White Cement ndustries Limited
(WCL) was Iormed with a 50 tpd white cement plant.
n 1974, under the PDC TransIer oI Company & Project Ordinance, the management oI
two companies, namely MLCFL and WCL were transIerred to the newly established State
Cement Corporation oI Pakistan (SCCP), which controlled the entire cement industry in Pakistan
aIter nationalization. n 1983 SCCP expanded WCL`s white cement plant by adding another
unit oI the same capacity parallel to the existing one. n 1986 SCCP also set up another
production unit oI grey cement with a capacity oI 600 tpd based on wet technology under the
name oI Pak Cement.
Privatization
Under the privatization policy oI the government, the ownership and management oI MLCFL,
WCL, and PCCL, was transIerred to the Kohinoor Maple LeaI Group. All three companies were
merged into Maple LeaI Cement Factory Limited on July 1, 1992. The arrangement worked well

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as the plants oI all three companies were within a common boundary wall, sharing Iacilities such
as raw material supply, power supply, water, and other inIrastructural Iacilities.
Management
MLCFL is a part oI the Kohinoor Maple LeaI Group, one oI the largest groups in Pakistan. t is
primarily being run by Mr. Tariq Sayeed Saigol, the son oI late Mian Sayeed Saigol, Iounder oI
the Saigol Group. Mr. Tariq S. Saigol is an ex- chairman oI All Pakistan Textile Mills
Association. He has also been the Chairman oI the Government`s Export Committee as well as a
director oI SBP and member oI the Prime Minister`s Committee oI TariII ReIorms, Resource
Mobilization, Tax ReIorms and Down Sizing oI the government. He is also the architect oI
Textile Vision 2005.Other senior management has vast experience in the textile industry. Top
management id the hub oI strategic decisions, with middle management playing implementation
role.
Company`s Policy
~Quality Policy
MLCFL`s policy Ior quality is based upon the mission statement.
MLCFL manuIactures grey ordinary Portland cement Ior industrial and domestic use.
MLCFL shall achieve its policy through the application oI quality management system; by
identiIying, understanding, managing, and maintaining a quality system oI inter related quality
processes which are structured to comply with the requirements oI SO 9001: 2000 (E) and all
applicable regulatory and statutory requirements.
MLCFL shall continually improve the eIIectiveness oI Quality Management System Ior the
organizations over all perIormance and eIIiciency. All the employees oI MLCFL believe in
~Continual improvement through team work"
MLCFL understands that the involvement oI people at all levels is equally beneIicial Ior both the
organization and its employees and the eIIective decision at all Iunctions shall be based on the
analysis oI data and inIormation.
MLCFL believes that the suppliers are important part oI the organization and play a key role in
the smooth operation oI plant.
This policy is issued to clearly indicate the attitude oI the company with regard to quality and
customer satisIaction Ior the long term oI MLCFL`s competitive position, reputation and
employees` satisIaction.

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Empowerment
Maple leaI has centralized operations, major decision making power lies in the hand oI the
central head quarters however delegation oI authority has been done in such a way that the senior
management has enough power to direct employees without inIorming the top management at
the central oIIice so as to avoid operation hindrance only


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SWOT Anulysis
Strength
Weukness
Opportonities
Threut


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Strengths:

1. The company is situated in Daud Khel, district Mianwali. This location is rich with raw
material that is required by the cement industries Ior the production oI cement.

2. Maple leaI is operating with a present production capacity oI 1.5 mntpa. Further
expansion oI 2.0 mntpa is expected in the near Iuture which will make MLFCL, the third
largest capacity wise player aIter Lucky cement and D.G. Cement.

3. The production oI the cement in maple leaI is completely automated.

4. The company has imported the machinery Ior dry process Irom Denmark. The use oI this
advance machinery has helped the company produce good quality cement with much
EIIiciency.

5. The company is going to import the waste heat recovery plant Irom Denmark,which will
help the company to cut the power expenditures.

6. Maple leaI cement Iactory is the only cement Iactory that produces both grey cement and
white cement.

7. t also has developed a niche market by being the only manuIacturer oI oil well cement in
Pakistan.

8. Maple leaI is one oI the pioneers oI cement industries in Pakistan, established in 1956.
This long time span oI the company has helped it earn customer loyalty all over Pakistan.

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9. Maple leaI, having a good brand image, has the advantage to charge their customers at a
higher price than the other competitors.

10.The price oI maple leaI cement is high in the international market as compared to its local
competitors who are involved in the exports as well.
Weaknesses
1. The location where the cement plant oI maple leaI is located is a very remote Area.

2. Maple leaI Iaces problems in hiring good quality oI employees Ior the Iactory place due
to this reason in spite oI a good salary package.

3. The company has been established since 1956. ThereIore the technology being used by
the Iactory, i.e. the production oI cement through wet process, is old and yields low
proIits and high costs.

4. The company has borrowed heavy loans Irom the Iinanciers, Iurther increasing the debt
burden over maple leaI.

5. Maple leaI is short oI trucks to distribute their product in local markets.

6. The cost oI Ireight charges Iurther reduces the retention price oI the cement, hampering
the proIitability oI the company.
Opportunity
1. At present the demand Ior cement in the domestic market is increasing. Maple LeaI is
beneIiting quite well at present.

2. I Kala Bagh dam is commissioned, MLFC will be the major beneIiciaries in the
ndustry.


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3. At present, maple leaI along with Lucky cement is the only two cement Iactories that
have received the BS certiIication.

4. This has given maple leaI a golden opportunity to capture the ndian market with very
less competition.

5. The demand oI cement outside Pakistan has been increasing rapidly, providing maple leaI
a good chance to explore these markets.

6. Maple leaI is also exploring new markets Ior the potential customers oI white cement,
which will give maple leaI a competitive edge against the competitors.

7. The conversion oI wet process plants to dry process plants and the shiIting oI company
Irom coal based production to waste heat production will cut down the company`s
expenses and increase company`s retention prices.

Threats

1. The company is highly vulnerable to price competition since it Iaces higher cost oI
production per bag.

2. The rocketing increase in prices oI Iurnace oil, and even 300 increase in the Price oI
coal has been aIIecting badly to company`s proIitability.

3. The export to ndian market highly depends on diplomatic relations between the two
countries.

4. The day aIter day terrorist attacks and the suicidal bombing have caused the unrest in the
country. Along with creating a sense oI non security among the citizens oI Pakistan, these
activities have proved to be hazardous to the manuIacturing companies as well. The
incident oI rocket launcher Iired on the grid station in Mianwali caused a great damage.

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PIST Anulysis
Politicul
Iconomic
Sociul
Technologicul



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Political factors

Political Iactors include government regulations and legal issues and deIine both Iormal
and inIormal rules under which the Iirms operate. The rule and regulations that the
cement industries Iollow are as Iollows:

%ax Policies
O According to the tax memorandum 2008, the cement industries have to abide by the
Iollowing rules

O The tax rates on telephones will be collected at the rate oI 10 oI the amount exceeding
Rs. 1000.
O General sales tax is enhanced Irom 15 to 16 including sales tax on services under
the Provincial Sales Tax Ordinance, etc.
O Due to the increase in the general rates oI sales tax, the rate sales tax on the natural gas
has been increased Irom 24 to 25 .
O Duty on cement (that includes Portland cement, aluminous cement, slag cement, super
sulphate cement and similar hydraulic cements, whether or not colored or in the Iorm oI
clinkers) has been enhanced Irom Rs. 750 to Rs. 900 per metric ton.
O The government has put special excise duty oI 1 as well.
O Duty on the services such as goods insurance, Iire nsurance, theIt nsurance, theIt
nsurance, marine nsurance, other nsurance, non-Iund services provided by banking
companies or non-banking companies has been enhanced Irom 5 to 10.
O The rate oI tax Ior the collection at the import stage Ior all imports oI goods has been
reduced to 2 Irom 5 .
O According to the tax memorandum 2008, the importer will not be taxed at the importing
stage oI goods such as mineral Iuels, mineral oils and products oI their distillation.

mployment Laws


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The labor policy issued by the Government oI Pakistan lays down the parameters Ior the growth
oI trade unionism, the protection oI workers' rights, the settlement oI industrial disputes, and the
redress oI workers' grievances. The policy also provides Ior the compliance with international
labor standards ratiIied by Pakistan. At present, the labor policy as approved in year 2002 is in
Iorce. The minimum wages Ior unskilled worker is Rs. 2,500. The minimum threshold oI income
Ior taxation oI salaried individuals has been enhanced Irom Rs. 150,000 to 180,000 per annum.


Political stability

The present situation regarding the political stability is negative in Pakistan.
This political instability has been in process since the Iate Iull attack oI 9/11, 2001.

Economic factors

Economic Iactors aIIect the purchasing power oI potential customers and the Iirm`s cost
oI capital. Following are the Iactors aIIecting the macro economy:

conomic growth

According to the report oI UN Economic and Social Commission Ior Asia and the PaciIic
Pakistan maintained its momentum in 2007, slightly more than the 6.6 Ior 2006.
The manuIacturing sector growth continued 8.4 in 2007, which is slightly more moderate
than 10 Ior the year 2006.
Pakistan has Iormulated sound macroeconomic policies that will help the Pakistani economy
to grow stronger but the recent political violence and uncertainties could slow down the
growth.
However according to the report, including all the sectors Pakistan`s economic growth is
expected to remain strong at 6.5 in 2008.

nflation rate

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O Pakistan, with a population oI about 16 million people has undergone a remarkable macro
economic growth during last Iew years, but the core problems oI the economy are still
unsolved.
O nIlation is one oI these core problems.
O The inIlation in year 2008 has recorded to be the highest according to the Federal Bureau
oI Statistics.
O Consumer Price jumped to 17.21 in March 2008 according to the statistics given by
Federal Bureau oI Statistics.
O n April 2008, the Pakistan inIlation accelerated at it Iaster pace and the inIlation is still
increasing.


Social factors

ealth consciousness

O Health consciousness among the people oI Pakistan has been increasing day by day.
O The citizens oI Pakistan are getting aware oI their duties in order to maintain the healthy
environment.
O Government is taking several steps in order to educate, how important it is Ior the people
to live in the healthy environment.
O The government discourages the operation oI the industries within the city by charging
these Iactories with environmental charges.
O n spite oI this discouragement, there are many Iactories that are running inside the city,
discharging poisonous gases and chemicals.
O By the passage oI time, the people as well along with the government are discouraging
such activities and demand Ior clean environment.


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Technological factors

Automation

O This is the era oI high competition.
O The Pakistani industries not only have to compete among themselves but with the
international market as well.
O Pakistan is steadily automating particularly its development sectors to stir quality
production and ensure skilled management, as it would ensure a good place Ior the
country in the global competitive market.
O The ERP is being implemented or is in the phase oI being implemented in the cement
industry.

%echnology incentives


O According to the report issued by the ministry oI technology, the government will invest
in various Iiscal and non-Iiscal incentives to nurture, develop, and promote the use oI T
in organizations, to increase their eIIiciency and productivity.

O The strategies Iocus on promotion oI venture capital industry through incentives,
recognition oI soItware development as a priority industry Ior Iinancing by the banks and
DFs, creation oI investment Iriendly environment, and building investors conIidence.







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RATIOS CALCULATED FOR
~MAPLE LEAF CEMENT

O Gross Profit margin
O Net Profit Margin
O Asset turn over ratios
O Debt to Equity ratio
O Interest Cover
O Current Ratio
O Quick Ratio
O Average inventory turnover period
O Average accounts receivable period
O Average accounts payable period
O Earnings Per share




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PROIITABILTIY RATIOS
O Gross profit marginGross Profit/Sales`100
2010 2009 2008

2,938,628/13,630,511*100
21.56


4,954,509/15,251,374*100
32.49

1,323,830/7,815,829*100
16.94
nterpretation
Maple LeaI Cements gross proIit margin has increased steadily as 32.49 in year 2009.The
increment was witnessed in gross proIit due to rise in net sales. However, we see that once again
proIit margin shows decline in 2010. Although the situation has improved Irom 2008 to 2009,
but the condition is still not good.
O Net profit margin PBIT/ Sales`100
2010 2009 2008

(510,032)/13,630,511*100
3.74


2,482,590/15,251,374*100
16.28

448,563/7,815,829*100
5.74

nterpretation
The Net proIitability oI the company is increasing Irom 2008 to 2009. The increasing net proIit trend
shows the eIIiciency oI the company to control the operating costs. n 2010 there is again decline in the
PBT, and it`s showing the negative value oI (510,032) because oI that the net proIit margin has
decreased down to 3.74.


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O Asset Turnover RatioSales/ Capital Employed
2010 2009 2008

13,630,511 /16,752,991
0.81


15,251,374/15,697,954
0.97

7,815,829/18,769,097
0.42

nterpretation
Asset turnover ratio determines the amount oI sales generated Irom each dollar. According to the
above result, low proIit margins tend to have higher asset turnover whereas higher proIit margins
tend to have lower asset turnover. So, the asset turnover oI Maple LeaI cement is increasing Irom
2008 to year 2009 which indicates that company had higher proIit margin in 2008 than in 2009
because asset turnover ratio was lower in 2008. Similarly, in 2010 proIit margin is again
increasing because oI the decline in asset turnover ratio as compared to 2009.
O Return on Capital EmployedPBIT/ Capital Employed`100
2010 2009 2008

(510,032)/16,752,991
3.04


2,482,590/15,697,954
15.81

448,563/18,769,097*100
2.39

nterpretation
The company is earning more return on the capital they have employed in the business in 2009,
but there is drastic decline in 2010 because oI poor perIormance oI the company.


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IBT & LIVIRAGI RATIOS OR GIARING RATIOS
O Debt to Equity RatioDebt/ Equity
2010 2009 2008

11,618,783/5,134,208
2.26

8,980,153/ 6,717,801
1.34

10,408,208/8,360,889
1.24

nterpretation
Due to increased debt and reduced equity in 2010, Maple LeaI Cement Factory Limited s debt to
equity ratio has rose up to 2.26 this increase in debt is only being used as a means oI providing
a cushion Ior the reducing equity.
O Debt to Capital EmployedDebt/Equity +Debt`100
2010 2009 2008

11,618,783/5,134,208
11,618,783*100
69.35

(8,980,153)/6,717,801
8,980,153*100
57.20

10,408,208/8,360,889
10,408,208*100
55.45


nterpretation
This ratio indicates the percentage oI equity and debt invested in the business. The above results
show that in 2008 the debt to capital employed ratio was lower than in 2009. t again increased
by 69.35 in 2010. This is a cushion Ior the company to increase its capital and enhance the
operations.

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O Interest CoverPBT/Interest
2010 2009 2008

2,569,508/2,059,476
1.25 times

917,651/3,400,241
0.27 times


1,364,244/1,812,807
0.75 times
nterpretation
t indicates the number oI times interest is covered by the proIits available to pay interest
charges. n 2008 0.75 times interest was covered by the proIit but it decreased down in 2009.
Similarly, again in 2010 it has taken a boost and become 1.25 times.
LIQLIITY RATIOS
O Current RatioCurrent assets/ current liabilities
2010 2009 2008

5,002,734/9,341,951
0.54


5,214,877/9,962,884
0.52

5,994,896/7,382,464
0.81

nterpretation
The current ratio in 2008 is 0.81 that was quite low but iI we see the recent trend oI 2010, the
current ratio is extreme down i.e. 0.54 in 2010 and it`s an alarm bell, as the company will not
Iind it easy to pay oII its liabilities and have huge liabilities coming up this year.



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O Quick Ratio
Current Assets- Stock/ Current Liabilities
2010 2009 2008

5,002,734-504,718/9,341,951
0.48


5,214,877-650,914/9,962,884
0.46

5,994,896-433,952/7,382,464
0.75

nterpretation
I quick ratio is higher, company may keep too much cash on hand or have a problem collecting
its accounts receivable. Higher quick ratio is needed when the company has diIIiculty borrowing
on short-term notes. The results shows that company does not have enough cash in hand to pay
oII it short term borrowing quickly and this ratio has been decreasing year to year such as in
2008 it was 0.75 which turned down by 0.46 in 2009 and then in 2010 it became 0.48. t
means that company is too much relying on its inventory or other assets in order to pay oII its
liabilities.
O Average inventory turnover periodInventory/ Cost of Sales`365
2010 2009 2008

504,718/10,691,883*365
17.23

650,914/10,296,865*365
23.07


433,952/6,491,999*365
24.40
nterpretation
The inventory turnover rate has improved in 2010 that is 17.23 days, that means that Maple leaIs
is generating more sales on the same amount oI inventory. But it is not as good as it remained in

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2008 and 2009. Higher inventory turnover ratio means higher proIit and good management oI
resources whereas lower inventory ratio means lower proIit and poor management oI resources.
O Average accounts receivable periodTrade Receivable/ Sales`365
2010 2009 2008

751,400/13,630,511*365
20.12


682,244/15,251,374*365
16.23



743,366/7,815,829*365
34.72


nterpretation
This ratio measures the quality oI debtors. A short collection period implies prompt payment by
debtors. t reduces the chances oI bad debts. Similarly, a longer collection period implies too
liberal and ineIIicient credit collection perIormance. Maple leaI cement had been recovering its
debt within 34.72 days which came down by 16.32 which was a good indicator Ior the company
in order recover its payment Irom debtors and avoid Irom bad debts. Similarly, in 2010 it again
took little boost and become 20.12 days bit still it is in Iavor oI the company.
O Average accounts payable periodTrade Payables/ Purchases`365
2010 2009 2008

3,491,872/10,691,883*365
119


2,407,870/10,296,865*365
85



2,495,559/6,491,999*365
140


nterpretation
The average payment period ratio represents the number oI days by the Iirm to pay its creditors.
A high creditors turnover ratio or a lower credit period ratio signiIies that the creditors are being
paid punctually this situation enhances the credit worthiness oI the company. So, in 2008 the

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company had 140 days which decreased by 85 days in 2009. t is good indication Ior the
company to increase it credit worthiness among creditors but in 2010 it again increased by 119
days. Again it is not a big issue but lower payable days helps you to build the trust oI people so
that they cannot Ieel reluctant to give you credit next time.
SHARIHOLIR'S RATIOS
Earnings Per share
PAT - Preference Dividend/ No. of ordinary share
2010 2009 2008

(2,583,955)-52,794/3,722,634
(0.71)

(982,970)-52,794/3,722,634
(0.26)


(676,135)-52,794/3,722,634
(0.20)


nterpretation
The earnings per share is a good measure oI proIitability and when compared with EPS oI
similar companies, it gives a view oI the comparative earnings or earnings power oI the Iirm.
AIter reviewing the above results it can be said that company is not perIorming healthy activities
in order to increase its earning power such as in 2008 its proIitability was 0.20 which took
unnoticeable increase and became 0.26 in 2009. n 2010 it increased by 0.71 which is better than
prior periods but still not suIIicient Ior the company.






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TRIN
ANALYSIS
















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BALANCI SHIIT

010 00 00
LUI1 LIA8ILI1ILS
Share cap|ta| and reserves
AuLhorlze CaplLal 0 40 0
lssued Subscrlbed and pald up caplLal 000 000 000
8eserves 129 1113 420
AccumulaLed roflL 13733 20364 30161
3846 1963 703
NCN CUkkLN1 LIA8ILI1ILS
Long Lerm loans from banklng secured 3317 24223 9718
8edeemable CaplLal 1314 1000
SyndlcaLe Lerm llnances 000 000 000
LlablllLles agalnsL asseLs sub[ecL Lo flnanclal lease 1877 990 23720
Long Lerm deposlL 616 008 444
Lease llnance advances 000 000 000
Deferred L|ab|||t|es
Lmployees 8eneflL
ueferred 1axaLlon 10000 3492 8273
Lmployees CompensaLed Absences 336 1379 2630
Long Lerm loans from relaLed parLles 000 000 000
1ota| Non current ||ab|||t|es 2938 1372 261
CUkkLN1 LIA8ILI1ILS
Current port|on of |ong term ||ab|||t|es
8edeemable CaplLal
Long Lerm loans lrom banklng secured 273 100
LlablllLles agalnsL asseLs 2331 6093 123670
SyndlcaLe Lerm flnances 100 39
ShorL Lerm llnances 7 30 322
1rade and oLher payables 43 4 247
Accrued roflL 109 127 49
1axaLlon
ulvldends 100 0
1ota| current ||ab|||t|es 6 33 97
1ota| ||ab|||t|es and Lqu|ty 2 2 12
ASSL1S
NCNCUkkLN1 ASSL1S
roperLy planL equlpmenL 3 1 4
lnLanglble asseLs 76 31 229

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lnvesLmenLs
long Lerm loans 42 7 4
deposlLs and prepaymenLs 017 468 2303
1ota| non current assets 316 144 398

CUkkLN1 ASSL1S
sLoresspares and loose Lools 18 12 63
sLock ln Lrade 3 7 3
Lrade debLs 10 8 282
lalr value derlvaLlve flnanclal lnsLrumenLs 100 31
loans and advances 241 6 3
lnvesLmenLs 16 43 22
ueposlLs 40 86 304
ShorL Lerm prepaymenLs 37 1739 0
Accrued roflL 33 29 90
Sales 1ax cusLom 0 71 33
uue from graLulLy fund LrusL 100 16 14
CLher recelvables 210 33 1718
1axaLlon neL 83 261 220
Cash and bank balances 27 16 4
1ota| Current Assets 407 1301 4793
1ota| Assets 169 188 1138

INTERPERTATION
Equities and Liabilities
For equity issued, subscribed and paid-up capital increased by 21 reserves by 45 and a
decrease in inappropriate proIit by 62. For the liability portion, current liabilities increased by
41 and non-current liabilities by 19.
For current liabilities major contributor is oI current portion oI long term loans and Iinances
which increased by 232 because oI increase in interest rates. Then the other major contributor
is current portion oI liabilities against assets subject to Iinance lease it is increased by 209.
Non-current liabilities increased by 19 with major increase in liabilities against assets
subjected to Iinance lease agreement with Iirst National Bank to acquire two units oI imparted
Volvo wheel loaders.


age 0 of 40

88098
The total assets oI the maple leaI have increased by 22 since the previous year.There is an
increase oI 17 in non-current assets. The property plant and equipment has increased by 70
because company acquired a new building, plant and machinery.
Also the capital work in progress increased because oI plant and machinery, electrical and
mechanical works, unallocated capital expenditure done Ior the expansion project oI 6700 tpd
clinker capacity. No investments were made in 2007 showing a 100 decrease. Then the
deposits and prepayments increased by 71.There is an increase oI 52 current assets, where
major indicators are stock in trade, loans and advances, deposits and short term prepayments,
receivables cash and bank balances. Stock in trade increased by 83 Irom last year because oI
low turnover oI work-in-progress and Iinished goods.There is a decrease oI 72 in loans and
advances because oI earnest money deposited with the privatization commission, Govt. oI
Pakistan Ior participating in the bidding oI 100 shareholding oI Pak American Fertilizer ltd. As
the Company`s bid could not succeed this balance was Iully received back during the current
year. Then there is an increase oI 10 in the deposits and short term payments which also
includes margin against letters oI credit. Finally cash and bank balances also increased by 22
Irom last year.










age 1 of 40

INCOMI STATIMINT
010 00 00
Sa|es net 11 93 111
CosL Cf sales 384 3861 9087
Gross prof|t 4069 27426 32719
Lxpenses
ulsLrlbuLlon CosL
3476 18023 110936
AdmlnlsLraLlve Lxpenses 2798 2314 8017
CLher Lxpenses 27347 7011 3320
1pLal operaLlng expenses 3836 13829 33413
Cperat|ng prof|t 12342 60398 12093
Cther Cperat|ng Income 9770 8623 4676
llnance CosL 3943 8737 43362
rof|t](Loss) before taxat|on
1axat|on
CurrenL 6032 4333 37288
ueffered 898327 10014 32466
7788 10949 27794
rof|t]( Loss) after taxat|on 16287 4338 170803

INTERPERTATION
The year 2006 is kept as base year and all Iinancial statement items are 100 Ior this year. Now,
comparing the sales in 2007 to its sales in 2006, the index is 64.9, showing a 35 decrease in
sales and this is prominently due to reduction in cement retention prices, and a 40-day
unIortunate breakdown oI a cement grinding mill. Now the reduction in cost oI sales is only 5,
showing company is producing on a very high cost and this is prominently due to increase in
coal and oil prices and the 2354 increase in work-in-progress transIerred to normal operations
during trial run operations Ior Iurther processing. Because oI high cost oI sales and low revenues,
the company`s gross proIit Ior 2007 is 85 less than the 2006.AIter the deduction oI operating
expenses the company is leIt with operating proIit oI 155,210,000, which is 92 less than the
previous year. There is an increase oI 62 in operating income, where major increase is due to
sale oI scrap. Gain on disposal oI operating Iixed assets and dividends. Finance cost remains
almost the same as in 2006. ProIit beIore taxation is 91 less than 2006. And proIit aIter
taxation is 96 less than 2006. The year 2007 is eventIul year Ior the cement sector oI Pakistan
but Maple LeaI suIIered a drastic decrease in proIits in its 6 year history.


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VIRTICAL
ANALYSIS











age of 40

BALANCI SHIIT
010 00 00 00 00
LUI1 LIA8ILI1ILS
Share cap|ta| and reserves
AuLhorlze CaplLal 2683 2728 1912 2133 2661
lssued Subscrlbed and pald up caplLal 1634 1662 1631 1819 1873
8eserves 1602 1608 1776 1902 1494
AccumulaLed roflL 1632 632 209 116 318
1384 2618 3197 3837 3884
SnAkL DLCSI1 MCNL 383 000 000 000 000
NCN CUkkLN1 LIA8ILI1ILS
Long Lerm loans from banklng secured 422 322 092 3639 4187
8edeemable CaplLal 3177 2806 3039 000 000
SyndlcaLe Lerm llnances 374 000 382 000 000
LlabllLles agalnsL asseLs sub[ecL Lo flnanclal lease 269 336 366 114 007
Long Lerm deposlL 001 001 001 001 002
Lease llnance advances 000 000 000 290 039
Deferred L|ab|||t|es
Lmployees 8eneflL 003 000 000 000 000
ueferred 1axaLlon 000 027 039 383 466
Lmployees CompensaLed Absences 008 007 006 006 003
Long Lerm loans from relaLed parLles 000 000 013 107 000
1ota| Non current ||ab|||t|es 44 00 0 40 40
CUkkLN1 LIA8ILI1ILS
Current port|on of |ong term ||ab|||t|es
8edeemable CaplLal 003 000 000 000 022
Long Lerm loans lrom banklng secured 2 1 0 8 3
LlablllLles agalnsL asseLs 1 1 1 0 0
SyndlcaLe Lerm flnances 0003 3843 4130 0000 0000
ShorL Lerm llnances 16 17 13 3 3
1rade and oLher payables 37 24 34 19 28
Accrued roflL 4 2 1 2 1
1axaLlon 000 000 000 000 017
ulvldends 000 000 021 023 029
1ota| current ||ab|||t|es 1 14
1ota| ||ab|||t|es and Lqu|ty 100 100 100 100 100
ASSL1S
NCNCUkkLN1 ASSL1S
roperLy planL equlpmenL 8061 7943 7679 8248 8361
lnLanglble asseLs 0007 0029 0038 0020 0000
lnvesLmenLs 0001 0000 0000 0000 0093
long Lerm loans 0013 0022 0023 0027 0038
deposlLs and prepaymenLs 020 020 021 018 008
1ota| non current assets 0 0 1


age 4 of 40

CUkkLN1 ASSL1S
sLoresspares and loose Lools 9 11 13 9 10
sLock ln Lrade 2 3 2 2 1
Lrade debLs 3 3 3 1 1
lalr value derlvaLlve flnanclal lnsLrumenLs 0000 0000 1399 1034 0000
loans and advances 102 030 032 036 139
lnvesLmenLs 181 138 281 403 000
ueposlLs and shorL Lerm prepaymenLs 0223 0377 0199 0033 0016
Accrued roflL 00023 00038 00029 00017 00030
Sales 1ax cusLom 0064 0063 0221 0161 0184
uue from graLulLy fund LrusL 000 003 004 004 000
CLher recelvables 0349 0113 0083 0003 0030
1axaLlon neL 114 063 017 006 000
Cash and bank balances 0281 0389 0433 0326 0337
1ota| Current Assets 1 0 1 14
1ota| Assets 100 100 100 100 100

INTERPERTATION
Assets
The total assets oI the company are 100 which includes 17.3 current assets and
82.7 non current assets Ior 2007. The major contributor to no-current assets is property plant
and equipment. These are 82.5 oI total assets. This includes 39 operating Iixed assets 59.
Capital work in progress and 2 stores and spares held Ior capital expenditure. Major
contributor to operating Iixed assets is plant and machinery, it is 75 oI total operating Iixed
assets, and other major contributor is building. And the major contributors to capital work-in-
progress are plant and machinery, mechanical works, electrical works and the un-allocated
capital expenditure. And Ior the 17.3 current assets, major contributors are stores, spares and
loose tools with 8.6 and investments with 4.
Equities and Liabilities
The Company is using 38.4 equity and 61 debtors` money to run its operations and Iinance
its assets. The Iirm`s degree oI indebtedness is high.
For the 38.4 equity portion, the company has 18.2 issued subscribed and paid-up capital and
19 reserves. For the 61 liabilities Portion Company has 16 current liabilities and 45.6
noncurrent liabilities. For the 45.6 non-current liabilities major contributors are term loans and
Iinances worth 36.6. These loans have been taken Irom diIIerent banks, consortium and
syndicate oI commercial banks. And Ior the 16.02 current liabilities major contributor is
cement parties oI long term loans and Iinance with 7.6.

age of 40

INCOMI STATIMINT
010 00 00
Sa|es 100 100 100
CosL Cf sales 7844 6731 8306
Gross prof|t 2136 3249 1694
Lxpenses
ulsLrlbuLlon CosL 2313 1334 1068
AdmlnlsLraLlve Lxpenses 142 099 133
CLher Lxpenses 116 028 032
1ota| Cperat|ng expenses 2372 1661 1233
416 1387 439
Cther Cperat|ng Income 042 040 133
Cperat|ng prof|t 4 16 6
llnance CosL 1311 2229 2319
rof|t](Loss) before taxat|on (1883) (602) (1743)
1axat|on
CurrenL 076 042 037
ueffered (063) 001 (938)
011 043 (880)
rof|t]( Loss) after taxat|on (1896) (643) (863)

INTERPERTATION
n common size analysis sales are bench marked as 100. Cost oI goods sold is 91.6 oI the
sales, leaving a very low gross proIit oI 8.4 Ior 2007. And it was 37.6 in 2006. This sharp
decline in 2007 is because oI high costs oI goods sold due to trial run operations oI the new
installed plant Irom 01 March, 2007 to 30th June 2007.The operating expenses are 4.2 oI total
sales, leaving the operating proIit to only4.2 adding 1.2 operating income. Maple LeaI has an
operating proIit oI only 5.3 to total sales. The total Iinance cost oI the company is 9.1 oI
sales because oI high mark-up rates on long term and short-term loans and Iinances, bank
guarantees commission and exchange Iluctuation loss. AIter the deduction oI Iinance cost, the
company suIIered pre-tax loss oI 3.8 oI total sales. AIter the tax calculation, the company
earned net proIit oI only 3.8 oI the total sales.



age of 40




FEASABILTY REP0RT
OVERVIEW OF TE ECONOMY
INTRODUCTION
PROBLEMS
OB1ECTIVES
BENINFITS
FUTURE OUTLOOKS
PRO1ECTED FINANCIALS














age of 40

OVERVIEW OF TE ECONOMY

The economy oI Pakistan has Iaced a huge slump this Iiscal year with the GDP growth mounting
to just 5 Ior 2008 and it's expected to be just 2 this year. The economy witnessed surging
inIlation rates with inIlation touching 25 high and so was the case with interest rates. The melt
down oI the stock exchange reIlected a sheer drop in stock prices and the Iall oI real estate
markets Iollowed.

The reduction oI expenditure in the real estate and construction business had adverse eIIects on
the cement sector. This is evident by drop oI investment as a percentage oI GDP Irom 22.5 to
mere 19.1 this year. To make matters worse, the electricity and water shortages girded the
industries and caused high losses. This Iiscal year's beginning saw highest oil prices ever and the
subsequent oI this high price was suIIered by each and every industry.
PROFITABILITY
The cement sector saw growth oI 2 in Iiscal year 2008-2009. However, exports showed
encouraging increase oI 47 with sales volume reaching 11.381 million tons against last year's
volume oI 7.716 million tons. Demand in the local market showed negative growth oI 14 due
to adverse economic situation in the country.
This growth was seen because oI a large number oI companies looking Ior new avenues outside
the Pakistani market. Those who were very successIul tried to reach the Middle East and the
AIrican markets. They capitalized on the growth potential oI the countries that are in a process oI
reconstruction like raq and Somalia. However, Maple LeaI Cement Iocused on ndia and aIter
Mumbai attacks the suIIered a lot as ndia imposed duties. Despite all the problems, their sales
increased.
The production oI grey, white and oil well cements by the Company at 3,174,512 metric tons
compares Iavorably to 2,431,352 metric tons in the corresponding period last year. ncrease in
production is mainly due to addition oI 6,700 tpd clinker capacity plant and oil well cement
commencing commercial production.

age of 40

Net sales Revenue doubled at Rs 15,251 million against the corresponding period last year oI Rs
7,816 million. Sales volume was recorded at 3,165,770 metric tons Ior all cements as compared
to 2,534,220 metric tons in the previous year in both local and export markets. The increase in
sales Ior Maple LeaI Cement in FY'09 was 95. 13. I we break it up Iurther, 52.34 increment
was witnessed in local sales while 175.12 rise was witnessed in export sales.
Introduction
This report seeks to evaluate the overall perIormance oI Maple leaI,and then the major issues
that company is Iacing , and what are the Iactors that company needs to Iocus on ,Ior giving
better perIormance next year, I we see the Maple leaI s Iinancials .it is continually going in
loss, reason is the poor perIormance and extra expenses that Maple leaI is Iacing, more over ,
Maple LeaI cement despite increase in sales was unable to liIt its proIits. I we compare it with
the other companies in the industries, Maple leaI Cement has underperIormed. Actually it has
shown worst perIormance this Iiscal year. All the companies that had showed losses or decreased
sales have improved but Maple LeaI incurred Iurther losses. This high increase in sales was
coupled by 59 increase in cost oI goods sold. The major chunks that caused such high
increment in CGS Ior Maple LeaI Cement were 57.31 increase in packing material consumed,
90.07 increase in Iuel and power expense and 71.63 increment in rents, rates and taxes.
Problem
This huge increment in expenses was because oI multiple reasons. The Iirst being electricity
shortage in the city. The nation witness unprecedented power outages this year. This has
adversely aIIected the operations oI the industrial sector. Even iI they use the generators, the
surging Iuel prices don't help. Despite the drop in international prices oI oil, there was not a drop
in Pakistani market because oI removal oI subsidy on oil. This removal was because oI
conditions imposed by MF Ior bestowing loan to Pakistan. The loan demands removal on
subsidies and increase in price oI the energy sector.
Objectives
Company recently had Machinery breakdown, because oI that the sales are going down, resulting
in poor proIits. For this reason company need to import machinery and is in need oI loan, maple

age of 40

leaI is also want to acquire Heat Recovery plant because Recovery oI waste heat has a direct
eIIect on the eIIiciency oI the process. This is reIlected by reduction in the utility consumption &
costs, and process cost.
Indirect Benefits:
a) Reduction in pollution: A number oI toxic combustible wastes such as carbon monoxide gas,
sour gas, carbon black oII gases, oil sludge, Acrylonitrile and other plastic chemicals etc,
releasing to atmosphere iI/when burnt in the incinerators serves dual purpose i.e. recovers heat
and reduces the environmental pollution levels.
b) Reduction in equipment sizes: Waste heat recovery reduces the Iuel consumption, which
leads to reduction in the Ilue gas produced. This results in reduction in equipment sizes oI all Ilue
gas handling equipments such as Ians, stacks, ducts, burners, etc.
c) Reduction in auxiliary energy consumption: Reduction in equipment sizes gives additional
beneIits in the Iorm oI reduction in auxiliary energy consumption like electricity Ior Ians, pumps
etc
FUTURE OF CEMENT INDUSTRY AND SCOPE OF MAPLE LEAF
The government oI Pakistan has recently announced the largest Public sector development
program this year. This plan is worth 646 billion rupees. OI this budget 25 billion has been
allocated to the earthquake rehabilitation and 67.59 billion towards building oI dams. This shows
that the domestic demand would increase in Maple LeaI being the 3rd largest in terms oI market
share would earn Iair share Irom the pie. The electricity would be an issue Ior them this year as
the rental generators will provide expensive electricity and MF loan tranche asks the
government to raise prices Iurther in December and in April. Finally recovery oI the global
economies will slowly and gradually open room Ior real.
Acquisition of Loan
For acquiring these assets company needs Iinancing, although company is in loss but with
acquisition oI this plant (that details are given above).we will be able to operate the Iunctions
more eIIectively and will show the improvement in the sales and proIits oI next year. The

age 40 of 40

company needs Long term loan oI 2,000,000 Rs.From that amount company will buy the
Machinery, this will help in the increasing the productivity and eIIiciency, it is expected to have
sales oI about 15,675,088 next year and will increase so on.



PRO1ECTED FINANCIALS

INCOME STATEMENT
BALANCE SEET