Page 49 - CCL AR 2017 Final

Liquidity Strategy its expansion, the management will try to improve the
The Company made draw-down of total Rs. 4 billion image of the Company and the brand. Specific
from its total facility of Rs. 9.5 billion to finance marketing budgets are kept for advertisements. In
cement line II project. In view of strong liquidity addition, excess liquidity is utilized in financing the
position and available unutilized short-term financing expansion project. These achievements are in line
facilities, the management is confident that there will with the expectations as depicted in last year’s
be no liquidity issue in future. Besides management Directors’ report.
has a practice of continuous monitoring of cash flows
on daily basis and has planned to gradually increase MARKET SHARE
its short-term financing facilities in line with the future Cherat is a premium brand of Ordinary Portland
working capital requirements. The Company has also Cement in Pakistan and Afghanistan. Our main
arranged Rs. 13 billion long-term loan for line III markets in Pakistan are KPK, FATA, and Punjab. As per
project considering all project requirements. the data available on the website of All Pakistan
Cement Manufacturers Association our market share
Financing Arrangements is around 4% because of our superior quality, Cherat
The Company has good business relationship with all is the first choice of customers in most of the markets.
the reputable banks and financial institutions of the Our market share is expected to increase after the
Country. Adequate unutilized short-term financing commissioning of line II. We managed to increase
facilities are available at the Company’s disposal. market share after expansion. Next year after full
During the year, the Company has also obtained a utilization of line II our market share will be more
syndicated term-finance facility of Rs. 13 billion at an than 5%.
attractive rate to finance the cement line III project.

Significant Changes in Financial Position, Liquidity
and Performance
Profit after tax has significantly increased by 39.24%
as compared to last year, which helped in improving
the financial position of the Company. Company’s
liquidity was affected mainly in view of the fact that all
the resources are being invested in the new line
project which has started improving after
commissioning of the new line. The mark up rates
were renegotiated and lowered during the year in view
of strong financial position of the Company. SEGMENT RESULTS

Analysis of Financial and Non-Financial Targets Segment result for Line I and Line II is given in note 32
to the financial statements. Analysis of local and
Targets are set for both financial and non-financial export sales is given in Director’s Report.
indicators. Financial indicators are set for revenue,
costs, profitability, gearing and liquidity etc. while Segment analysis of gross income and profit before
non-financial targets are set for company and brand tax of Line I and Line II has been referred in note 32 to
image, human resource development and growth / the financial statements.
expansion etc. Line II started in January 2017and all
the targets in this regard were met. This has improved CONSUMER PROTECTION MEASURES
our performance significantly.
The Company ensures that the cement is packed and
The Company on an annual basis sets marketing, dispatched to its consumers in a safe manner. It also
production and other targets in the form of a budget complies with all safety standards and industrial
which is duly approved by the Board of Directors. We requirements. The Company ensures that the
have surpassed most of the key targets set in our last customers get best value for money.
year’s budget specially pertaining to production,
revenue and profitability. For liquidity and gearing, BUSINESS ETHICS AND ANTI-CORRUPTION
cash flows are monitored on a daily basis to achieve MEASURES
the targets. The Company has also met its The Company is fully committed to promoting the
non-financial targets in the areas of marketing and highest standards of ethical behavior throughout its
human resource to a greater extent. For revenue business. The management condemns corrupt and
maximization, marketing targets are set with respect fraudulent practices and ensures transparency,
to quantity and retention. The Company managed to integrity and honesty in all aspects of work. The
capture the market share after expansion. In line with

47
Annual
Report 2017