Fulfilling Dreams - kohatcement.com · Pak Rupee Value, has increased cost ... and provincial infrastructure projects associated with China Pak Economic Corridor ... Final cash dividend

3rd Quarter Report

March 31, 2018

w w w . k o h a t c e m e n t . c o m

FulfillingDreams

FulfillingDreams

Contents

02 Corporate Information

03 Directors’ Review

04

05 Balance Sheet

06 Profit and Loss Account

07 Statement of Comprehensive Income

08 Cash Flow Statement

09 Statement of Changes in Euqity

10 Notes to the Financial Statements

01

02

Board of DirectorsMrs. Hafsa Nadeem Chairperson & Non-Executive Director

Mr. Aizaz Mansoor Sheikh Chief Executive

Mr. Nadeem Atta Sheikh Executive Director

Mr. M. Atta Tanseer Sheikh Independent Director

Ms. Aminah Aizaz Sheikh Non-Executive Director

Mr. Muhammad Rehman Sheikh Non-Executive Director

Mr. Hasan Tariq Atta Non-Executive Director

Audit CommitteeMr. M. Atta Tanseer Sheikh Chairman

Ms. Aminah Aizaz SheikhMr. Muhammad Rehman Sheikh

HR&R CommitteeMr. M. Atta Tanseer Sheikh Chairman

Mr. Aizaz Mansoor SheikhMr. Muhammad Rehman Sheikh

Company SecretaryMr. Muhammad Asadullah Khan

Legal AdvisorImtiaz Siddiqui & Associates

AuditorsKPMG Taseer Hadi & Co.Chartered Accountants

Share RegistrarHameed Majeed Associates (Pvt) LimitedH.M. House,7-Bank Square, Lahore.Tel: 042 - 37235081 - 82Fax: 042 - 37358817

Registered Office and WorksKohat Cement Company LimitedRawalpindi Road, Kohat.Tel: 0922 - 560990 Fax: 0922 - 560405Email: [email protected]

Head Office37-P, Gulberg-II, Lahore.Tel: 042 -11 - 111 - 5225Fax: 042 - 35754990Email: [email protected]

Bankers of the CompanyStandard Chartered Bank (Pak) LtdAskari Bank LimitedThe Bank of PunjabThe Bank of KhyberSoneri Bank LimitedAllied Bank LimitedUnited Bank LimitedMCB Bank LimitedNational Bank of PakistanHabib Bank LimitedBank Alfalah Limited

Corporate Information

3rd Quarter Report - March 31, 2018

03

Directors’ Review

Dear Shareholders,

Your Directors present to you the unaudited Interimresults for the 3rd Quarter and nine months of financialyear 2017-18.

Production and Sales Volumes

Summary of production and sales is as under:

For and on behalf of the Board

Aizaz Mansoor Sheikh Nadeem Atta SheikhChief Executive DirectorLahore: April 21, 2018

Financial Performance

Financial Performance of your Company for the period under review issummarized below:

Net Sales Revenue 3,517,027,189 3,493,497,757 10,384,648,773 10,657,622,935

Gross profit 986,294,738 1,451,580,845 3,514,815,155 4,815,699,669

Admin and selling expenses (75,979,671) (68,844,467) (245,445,611) (223,256,890)

Other expenses (73,800,223) (106,098,408) (254,682,597) (336,987,002)

Other income 91,645,676 100,007,239 267,410,519 302,555,133

Finance costs (12,728,167) (20,313,189) (49,928,083) (66,910,270)

Taxation (263,601,170) (425,062,232) (936,152,108) (1,369,753,847)

Profit after taxation 651,831,183 931,269,788 2,296,017,275 3,121,346,793

Earnings per share (Rs.) 4.22 6.03 14.86 20.20

2018 2017 2018 2017

3rd Quarter(Jan-Mar)

Nine months(July-Mar)

Clinker Production 460,919 501,482 1,527,810 1,438,081

Cement Production 618,202 564,280 1,721,626 1,603,910

Local Sales 608,042 514,550 1,664,021 1,502,709

Export Sales 20,731 22,036 79,435 103,307

Total Sales 628,773 536,586 1,743,456 1,606,016

2018 2017 2018 2017

(Jan-March) (July-March)M Tons

(Rupees)

Global coal prices have been on a steady rise in theperiod under reference, which coupled with decliningPak Rupee Value, has increased cost of cementproduction. Although the cement prices showed upwardtrend during March 2018; however, these have beencontinuously decreasing during earlier months for thenine-month period under review. All these factorstogether culminated into profit reduction of the Company.

The Company is current on its all debt obligations.

On Going Projects

Cement Mill of grinding capacity of 105 tph shallcommence its commercial operations during April2018.

Brownfield Expansion of 7800 tpd at the existing Plantsite is being carried out as per schedule.

Future outlook

We are expecting growth in overall consumption acrossseveral sectors including Private sector housing projectsand provincial infrastructure projects associated withChina Pak Economic Corridor (CPEC) and PSDP. Theseprojects shall have vital role to boost the overallinvestment climate resultantly shall have robust increasein the profits of the Company.

Acknowledgments

We would like to express our sincere appreciation andgratitude to all the stakeholders and employees fortheir co-operation, trust and support.

04 3rd Quarter Report - March 31, 2018

501,482

564,280

514,550

22,036

536,586

1,527,810

1,721,626

1,664,021

79,435

1,743,456

1,438,081

1,603,910

1,502,709

103,307

1,606,016

460,919

618,202

608,042

20,731

628,773

3,517,027,189

986,294,738

(75,979,671)

(73,800,223)

91,645,676

(12,728,167)

(263,601,170)

651,831,183

4.22

3,493,497,757

1,451,580,845

(68,844,467)

(106,098,408)

100,007,239

(20,313,189)

(425,062,232)

931,269,788

6.03

10,384,648,773

3,514,815,155

(245,445,611)

(254,682,597)

267,410,519

(49,928,083)

(936,152,108)

2,296,017,275

14.86

10,657,622,935

4,815,699,669

(223,256,890)

(336,987,002)

302,555,133

(66,910,270)

(1,369,753,847)

3,121,346,793

20.20

05

Condensed Interim Balance Sheet (Un-audited)As at 31 March 2018

(Un-Audited) (Audited)March 31, 2018 June 30, 2017

Note Rupees Rupees

Chief Executive Chief Financial Officer Director

EQUITY AND LIABILITIESShare capital and reservesAuthorized share capital 3,000,000,000 3,000,000,000Issued, subscribed and paid-up capital 1,545,086,900 1,545,086,900Reserves 120,142,465 120,531,465Accumulated profit 15,627,639,141 13,640,639,246

17,292,868,506 15,306,257,611Non-current liabilitiesLong term finances - secured 5 213,157,888 426,315,784Long term security deposits 2,036,100 2,036,100Deferred liabilities- deferred taxation 1,603,720,842 1,660,261,314- compensated absences 12,873,964 13,616,897

1,831,788,794 2,102,230,095Current liabilitiesCurrent maturity of long term finances 5 284,210,528 284,210,528Trade and other payables 6 2,960,786,671 2,177,574,482Short term borrowings - secured - 200,000,000Provision for taxation - net - 78,470,775Unpaid dividend 29,603,848 29,082,559Unclaimed dividend 9,919,087 8,027,340Interest / mark-up accrued on borrowings 3,968,401 6,337,389

3,288,488,535 2,783,703,073

Contingencies and commitments 7

22,413,145,835 20,192,190,779

The annexed notes from 1 to 21 form an integral part of these condensed interim financial statements.

ASSETSNon-current assetsProperty, plant and equipment 8 8,272,186,819 8,060,484,714Investment property 9 3,588,639,222 3,062,824,000Intangible assets 15,901,917 14,741,587Long term loans and advances 4,201 39,827Long term deposits 125,326,640 125,326,640

12,002,058,799 11,263,416,768Current assetsStores, spares and loose tools 1,741,210,004 1,333,176,562Stock-in-trade 841,871,787 949,142,281Trade debts - unsecured, considered good 10 516,212,228 343,775,970Short term investments 11 6,018,322,456 5,219,113,317Advances, deposits, prepayments and other receivables 591,324,342 587,907,314Advance income tax - net 134,688,509 -Cash and bank balances 12 567,457,710 495,658,567

10,411,087,036 8,928,774,011

22,413,145,835 20,192,190,779


Condensed Interim Profit and Loss Account (Un-audited)For the quarter and nine months period ended 31 March 2018

Sales - net 13 10,384,648,773 10,657,622,935 3,517,027,189 3,493,497,757Cost of goods sold 14 (6,869,833,618) (5,841,923,266) (2,530,732,451) (2,041,916,912)

Gross profit 3,514,815,155 4,815,699,669 986,294,738 1,451,580,845

Selling and distribution expenses (94,699,052) (102,416,793) (26,696,190) (30,938,474)Administrative and general expenses (150,746,559) (120,840,097) (49,283,481) (37,905,993)Other operating income 15 267,410,519 302,555,133 91,645,676 100,007,239Other operating charges 16 (254,682,597) (336,987,002) (73,800,223) (106,098,408)

(232,717,689) (257,688,759) (58,134,218) (74,935,636)

Operating profit 3,282,097,466 4,558,010,910 928,160,520 1,376,645,209

Finance cost (49,928,083) (66,910,270) (12,728,167) (20,313,189)

Profit before taxation 3,232,169,383 4,491,100,640 915,432,353 1,356,332,020

Taxation 17 (936,152,108) (1,369,753,847) (263,601,170) (425,062,232)

Profit after taxation 2,296,017,275 3,121,346,793 651,831,183 931,269,788

Earning per share (basic and diluted) 14.86 20.20 4.22 6.03


Note Rupees

01 July to 01 July to 01 January to 01 January to31 March 31 March 31 March 31 March

2018 2017 2018 2017


07

Condensed Interim Statement of Comprehensive Income (Un-audited)For the quarter and nine months period ended 31 March 2018


Profit after taxation 2,296,017,275 3,121,346,793 651,831,183 931,269,788

Other comprehensive income for the period

Items that are or may be reclassified to profitand loss account:

Available-for-sale financial assets- net changes in fair value (389,000) 260,199 44,600 210,999

Total comprehensive income for the period 2,295,628,275 3,121,606,992 651,875,783 931,480,787

Rupees


01 July to 01 July to 01 January to 01 January to31 March 31 March 31 March 31 March

2018 2017 2018 2017



Condensed Interim Cash Flow Statement (Un-audited)For the nine months ended 31 March 2018

(Un-audited) (Un-audited)July 1 - March 31 July 1 - March 31

2018 2017Note Rupees Rupees

Cash flow from operating activities

Profit before taxation 3,232,169,383 4,491,100,640Adjustments for:

Depreciation on property, plant and equipment 8.1 393,230,975 363,785,901Amortization on intangible assets 2,763,416 228,907Gain on disposal of property, plant and equipment (11,860) (2,977,326)Interest on bank deposits and investments (110,264,348) (253,140,017)Realized gain on held for trading investments (112,361,398) (14,107,185)Unrealized gain on held for trading investments (37,150,092) (31,428,567)Provision for compensated absences 901,740 1,560,852Provision for Workers’ Welfare Fund 16 65,375,788 87,777,620Provision for Workers’ Profit Participation Fund 16 173,555,009 241,404,382Finance cost 49,928,083 66,910,270

425,967,313 460,014,837

Cash generated from operations before working capital changes 3,658,136,696 4,951,115,477

(Increase) / decrease in current assets:Stores, spares and loose tools (408,033,442) (149,999,847)Stock-in-trade 107,270,494 3,950,828Trade debts (172,436,258) (134,067,236)Advances, deposits, prepayments and other receivables 14,179,177 167,095,266Increase / (decrease) in current liabilities:Trade and other payables 650,885,189 (167,709,294)

191,865,160 (280,730,283)

Cash generated from operations 3,850,001,856 4,670,385,194

Compensated absences paid (1,644,673) (1,900,824)Finance cost paid (52,297,071) (74,893,885)Payment made to Workers’ Welfare Fund (106,603,797) (86,003,351)Long term deposits made - (27,030,000)Income tax paid (1,205,851,864) (1,239,151,764)

Net cash generated from operating activities 2,483,604,451 3,241,405,370Cash flow from investing activitiesAcquisition of property, plant and equipment (621,036,981) (538,423,291)Proceeds from disposal of property, plant and equipment 16,115,761 8,060,000Acquisition of intangible assets (3,923,746) (9,254,980)Acquisition of investment property (525,815,222) (908,645,072)Investment in mutual funds - net (1,926,052,471) (825,000,000)Long term loans and advances - net 35,626 80,519Gain on other short term investments - net 110,452,825 196,578,987Interest on bank deposits 92,668,143 86,192,271

Net cash used in investing activities (2,857,556,065) (1,990,411,566)Cash flow from financing activities

Repayment of long term finances - secured (213,157,896) (213,157,896)Repayment of short term borrowings (200,000,000) (398,000,000)Dividend paid (306,604,344) (770,043,530)

Net cash used in financing activities (719,762,240) (1,381,201,426)

Net decrease in cash and cash equivalents (1,093,713,854) (130,207,622)Cash and cash equivalents at beginning of the period 5,611,171,564 6,036,461,321

Cash and cash equivalents at end of the period 18 4,517,457,710 5,906,253,699


09

Condensed Interim Statement of Changes in Equity (Un-audited)For the nine months ended 31 March 2018

Balance as at 30 June 2016 - audited 1,545,086,900 49,704,951 860,714 70,000,000 12,104,437,366 12,225,003,031 13,770,089,931

Total comprehensive income

Profit for the nine months ended31 March 2017 - - - - 3,121,346,793 3,121,346,793 3,121,346,793

Other comprehensive income for thenine months ended 31 March 2017 - - 260,199 - - 260,199 260,199

- - 260,199 - 3,121,346,793 3,121,606,992 3,121,606,992

Transactions with owners of the Company

Final cash dividend at Re. 1.0 per share forthe year ended 30 June 2016 - - - - (154,508,690) (154,508,690) (154,508,690)

First interim cash dividend at Rs. 4.0 pershare for the year ended 30 June 2017 - - - - (618,034,760) (618,034,760) (618,034,760)

Second interim cash dividend at Rs. 8.0 pershare for the year ended 30 June 2017 - - - - (1,236,069,520) (1,236,069,520) (1,236,069,520)

- - - - (2,008,612,970) (2,008,612,970) (2,008,612,970)

Balance as at 31 March 2017 - unaudited 1,545,086,900 49,704,951 1,120,913 70,000,000 13,217,171,189 13,337,997,053 14,883,083,953

Balance as at 30 June 2017 - audited 1,545,086,900 49,704,951 826,514 70,000,000 13,640,639,246 13,761,170,711 15,306,257,611

Total comprehensive income

Profit for the nine months ended31 March 2018 - - - - 2,296,017,275 2,296,017,275 2,296,017,275

Other comprehensive income for the nine months ended 31 March 2018 - - (389,000) - - (389,000) (389,000)

- - (389,000) - 2,296,017,275 2,295,628,275 2,295,628,275

Transactions with owners of the Company

Final cash dividend at Rs. 2.0 per share forthe year ended 30 June 2017 - - - - (309,017,380) (309,017,380) (309,017,380)

Balance as at 31 March 2018 - unaudited 1,545,086,900 49,704,951 437,514 70,000,000 15,627,639,141 15,747,781,606 17,292,868,506

Share Share Fair value General Accumulated Total Totalcapital permium reserve reserve profit reserves

Rupees

Capital reserves Revenue reserves



Notes to the Condensed Interim Financial Statements (Un-audited)For the nine months ended 31 March 2018

1. Reporting entity

1.1 Kohat Cement Company Limited ("the Company") is a public limited company incorporated in Pakistan underthe Companies Act, 1913 (now the Companies Act, 2017) and is listed on Pakistan Stock Exchange. TheCompany is engaged in the production and sale of cement. The registered office of the Company is situatedat Rawalpindi Road, Kohat, Pakistan. Pursuant to the approval of the Board of Directors, the managementintends to set up a new cement production line at the Company's existing factory site.

1.2 ANS Capital (Private) Limited is the holding company of the Company and holds 84,986,400 ordinary sharesof the Company comprising 55% of its total paid up share capital.

2. Basis of preparation

2.1 These condensed interim financial statements comprise of the condensed interim balance sheet of theCompany, as at 31 March 2018 and the related condensed profit and loss account, condensed interimstatement of comprehensive income, condensed interim cash flow statement and condensed interim statementof changes in equity together with the notes forming part thereof.

2.2 These condensed interim financial statements have been prepared in accordance with the accounting andreporting standards as applicable in Pakistan for interim financial reporting. the accounting and reportingstandards as applicable in Pakistan for interim financial reporting comprise of:

- International Accounting Standard (IAS) 34, Interim Financial Reporting, issued by the InternationalAccounting Standards Board (IASB) as notified under the Companies Act, 2017: and

- Provisions of and directives issued under the Companies Act, 2017.

Where the provisions of and directives issued under Companies Act, 2017 differ with the requirements ofIAS 34, the provisions of and directives issued under Companies Act, 2017 have been followed.

2.3 These condensed interim financial statements do not include all of the information required for full annualfinancial statements and should be read in conjunction with the annual audited financial statements for theyear ended 30 June 2017..

2.4 Comparative balance sheet numbers are extracted from the annual audited financial statements of theCompany for the year ended 30 June 2017, whereas comparatives of condensed interim profit and lossaccount, statement of comprehensive income, cash flow statement and statement of changes in equity arestated from unaudited condensed interim financial statements of the Company for the nine months periodended 31 March 2017.

2.5 These condensed interim financial statements are unaudited and being submitted to the shareholders asrequired under Section 237 of the Companies Act, 2017.

3. Judgements and estimates

The preparation of the condensed interim financial statements requires management to make judgments, estimatesand assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities,income and expenses. Actual results may differ from these estimates.

The significant judgments made by the management in applying the Company's accounting policies and the keysources of estimation uncertainty were the same as those applied to the financial statements for the year ended30 June 2017.

4. Statement of consistency in accounting policies

4.1 The accounting policies and the methods of computation adopted in the preparation of these condensedinterim financial statements are same as those applied in the preparation of the financial statements for theyear ended 30 June 2017 except that pursuant to the requirements of IAS 7 "Statement of cash flows" adisclosure of reconciliation of movements of liabilities to cash flows arising from financing activities hasbeen given in note 19 to these condensed interim financial statements. This change does not have anyimpact on the figures reported in the financial statements..

4.2 There were certain new standards and amendments to the approved accounting standards which becameeffective during the period but are considered not to be relevant or have any significant effect on the Company'soperations and are, therefore, not disclosed.


11



Note Rupees Rupees

5 Long term finances - secured

Syndicated term finance - WHR 5.1 497,368,416 710,526,312Less: Current maturity presented under current liabilities (284,210,528) (284,210,528)

213,157,888 426,315,784

Standard Effective date (accountingperiods beginning on or after)

FRIC 23 - Uncertainty over Income Tax Treatments 01 January 2019IFRS 15 - Revenue from Contract with customer 01 July 2018IFRS 9 - Financial Instruments 01 July 2018IAS 28 - Investments in Associates and Joint Ventures 01 January 2019IFRS 3 - Business Combinations 01 January 2019IFRS 11 - Joint ventures 01 January 2019IAS - 12 Income Taxes 01 January 2019IAS - 23 Borrowing cost 01 January 2019IFRS 16 - Leases 01 January 2019

5.1 During the period / year, the Company has made repayments amounting to Rs. 213,157,896 (30 June 2017 :Rs. 284,210,528).

6 Trade and other payables

Trade creditors 6.1 715,143,321 233,656,825Contractors’ bills payable 25,857,416 12,006,222Accrued liabilities 279,509,199 140,009,609Advances from customers 67,101,087 82,688,697Payable to Workers’ Welfare Fund 66,341,454 107,569,463Payable to Workers’ Profit Participation Fund 1,282,494,908 1,107,484,399Payable to Provident Fund Trust 2,402,811 1,857,673

2,438,850,196 1,685,272,888Payable to Government on account of:

Income tax deducted at source 9,807,896 691Federal excise duty 51,987,312 79,815,400Sales Tax 11,638,386 -Royalty and excise duty 71,458,585 57,851,549

144,892,179 137,667,640

Securities and retention money payable 195,482,034 182,723,893Other payables 181,562,262 171,910,061

377,044,296 354,633,954

2,960,786,671 2,177,574,482

4.3 The following amendments and interpretations of approved accounting standards will be effective for accountingperiods as detailed below :

6.1 This includes unsecured balance of Rs. 6,757 (30 June 2017: Rs. 15,347) and Rs. 31,898,434 (30 June 2017:5,978,701) payable to Palace Enterprises (Private) Limited and Ultra Pack (Private) Limited respectively, relatedparties of the Company.


Note Rupees Rupees



7. Contingencies and commitments7.1 Contingencies7.1.1 The Competition Commission of Pakistan ("CCP") took suo moto action under Competition Ordinance, 2007,

(subsequently enacted as Competition Act, 2010 - the "Law") and issued show cause notice on 28 October2008 inquiring for increase in cement prices across the country. Similar notices were also issued to All PakistanCement Manufacturer Association ("APCMA") and its member cement manufacturers. The Company filed writpetition in Honorable Lahore High Court ("LHC") challenging the vires of the law along with filing of appeal beforethe honourable Supreme Court of Pakistan ("SCP") because at that time, no appeallate forum except SupremeCourt was available to the Company. The LHC, vide its order dated 24 August 2009, allowed CCP to issue itsfinal order. Consequently, CCP passed an order dated 28 August 2009 imposing a penalty of Rs. 103.00 millionon the Company. The said levy of penalty has also been agitated by the Company before the LHC, and the LHCvide its order dated 31 August 2009 restrained CCP from enforcing its order against the Company for the timebeing.Meanwhile the CCP Tribunal was constituted under the law to hear appeals against levy of penalty by CCP andthe SCP set aside all the appeals to the Tribunal for its adjudication. However, the constitution of Tribunal hasalso been challenged by the Company along with other stakeholders before the Honorable Sindh High Court("SHC") on various legal grounds, which very kindly has granted a stay order in favour of the Company againstconstitution of the CCP Tribunal.

7.1.2 The Tax Department, after conducting Sales Tax and Federal Excise Duty audit of the Company for Tax Year 2009passed an order dated 23 May 2012 disallowing zero rating on exports and input tax claims, levying additionaltax and penalty amounting to Rs. 12.72 million and Rs. 14.02 million under provisions of Sales Tax and FederalExcise Laws respectively. The Company filed appeal before CIR(A) along with a writ petition before the honourableLahore High Court (LHC) against the above mentioned order. Both litigations have been decided in favour ofthe Company. However, both these appellate decisions have been assailed by the tax department at respectiveforums i.e. through filing of appeal before the ATIR and through filing of an Intra Court Appeal (ICA) before thethe honourable LHC. Before the decision of matter, an amount of Rs. 14.80 million was deposited by the Companyunder Amnesty Scheme announced vide SRO 548(I)/2012 dated 22 May 2012 which became refundable tothe Company in consequence of favorable appellate order.

7.1.3 The Deputy Commissioner Inland Revenue (DCIR), disallowed Rs. 17.00 million being reversal of excess outputtax paid by the Company on advances recevied from its dealers and imposed a penalty of Rs. 0.85 million,pertaining to Tax Periods August 2013, October 2013, December 2013, January 2014 and March 2014 withoutapprehending the facts and legal provisions which donot empower the DCIR to disallow the aforesaid amount.The Company filed an appeal before the Commissioner Inland Revenue (Appeals) [CIR(A)], challenging theaforesaid disallowance and in the meanwhile, the principal demand of Rs. 17.00 Million was also paid to theState kitty. The CIR(A), heard the case of the Company for the aforesiad months and remanded the case backto the DCIR to consider the contention of the Company to delete the disallowance. The DCIR, after thoroughexamination of taxpayer's record accepted its contention and deleted the entire demand of Rs. 17.00 million;however, the levy of penalty was maintained by him, which has been challenged by the Company through filingof appeal before (CIR(A).

7.1.4 Income tax affairs of the Company for Tax Year 2015 were selected for audit by the Commissioner Inland Revenue(CIR) under the provisions of Section 177 of the Income Tax Ordinance, 2001 (ITO, 2001). The audit proceedingswere finalized by Deputy Commissioner Inland Revenue (DCIR) resulting in change in allocation of expensesbetween local and export income of the Company and disallowance of certain expenses and allowance culminatinginto a further tax liability of Rs. 145 million. The aforesaid treatment meted out by the DCIR has been agitatedby the Company before Commissioner Inland Revenue (Appeals) through filing of appeal.

7.1.5 The Additional Commissioner Inland Revenue (Addl. CIR) amended the assessment of the Company twice forthe Tax Year 2016 under the provisions of Section 122(5A) of the Income Tax Ordinance, 2001 (ITO, 2001).The amendments of assessment resulted in change in allocation of expenses between local and export incomeof the Company and disallowance of certain expense, allowances and tax credit. Super Tax U/S 4B of the ITO,2001 was enhanced by Rs. 18.1 million and tax credit U/S 65B of the ITO, 2001 was disallowed to the tune ofRs. 28 million whereas aforesaid disallowance created a further tax liability of Rs. 186.3 million.The aforesaidtreatment meted out by the Addl. CIR has been agitated by the Company before the Commissioner InlandRevenue (Appeals) through filing of appeal.Management is confident of favourable outcome in aforementioned matters, hence no provision is beingrecognized in this respect in the financial statements.Other than the above mentioned matters, there has been no material change in contingencies as disclosedpreceding annual published financial statements of the Company for the year ended 30 June 2017.

13

7.2 CommitmentsIn respect of letters of credit for:- capital expenditure 6,542,681,765 70,344,785- stores and spares 102,950,824 499,021,201

6,645,632,589 569,365,986

8. Property, plant and equipmentOperating fixed assets 8.1 7,064,291,550 7,378,863,363Capital work in progress 8.2 1,207,895,269 681,621,351

8,272,186,819 8,060,484,714

8.1 Operating fixed assets

Opening written down value 7,378,863,363 7,698,456,586

Add: Additions during the period / year (cost)Factory buildings and plant civil structure 39,202,304 -Plant, machinery and equipment 9,469,971 43,835,811Power installations - 35,023,268Furniture, fixtures and office equipment 3,332,329 4,717,593Computers and printers 2,310,615 3,469,337Light vehicles 35,730,677 95,172,996Heavy vehicles 1,509,200 -Laboratory equipment 3,207,967 304,882

94,763,063 182,523,887Less: Disposals during the period / year (written down value)Factory buildings and plant civil structure - (4,500,000)Plant, machinery and equipment (9,481,316) (338,275)Furniture, fixtures and office equipment - (158,738)Light vehicles (6,622,585) (132,766)Heavy vehicles - (111,633)

(16,103,901) (5,241,412)

Less: Depreciation charge for the period / year (393,230,975) (496,875,698)

Closing written down value 7,064,291,550 7,378,863,363

8.2 Capital work in progress

Balance at beginning of the period / year 681,621,351 173,299,377Add: Additions during the period / year 574,696,194 526,463,141Less: Transfers to fixed assets during the period / year (48,422,276) (18,141,167)

1,207,895,269 681,621,351



Note Rupees Rupees

9.1 The latest valuation of investment property was carried out as at 30 June 2017, and according to that the marketvalue of investment property, excluding additions during the period of Rs. 525.82 million, was Rs. 3,815.43million. During the current nine months period, the Company has purchased land measuring 309 kanals and8 marlas in Lahore. The fair value measurement for the investment property has been categorized as a level3 fair value based on the inputs to the valuation techniques used.

10. This includes unsecured balance of Rs. 3,915 (30 June 2017: Rs. 3,915) receivable from Ultra Pack (Private) Limited,a related party of the Company.

9. Invesment Property

Opening Balance 3,062,824,000 2,156,011,898Addition during the period / year 525,815,222 906,812,102

9.1 3,588,639,222 3,062,824,000




Note Rupees Rupees

11. Short term investments

Available-for-sale

Equity securities of listed company 526,800 915,800

Held for trading

Investment in mutual funds 11.1 2,067,795,656 102,684,520Investment in Market Treasury Bills - 5,115,512,997

Loans and receivables

Investment in term deposit receipts 11.1 3,950,000,000 -

6,018,322,456 5,219,113,317

11.1 These represent deposits made and securities placed under Shariah permissible arrangement.

12. Cash and Bank BalanceThese include Rs. 91.828 million (June 30, 2017: Rs. 8.008 million) placed under Shariah permissible arrangement.Remaining deposits are placed with conventional financial institutions.

(Un-Audited) (Un-Audited)July 1 - Mar. 31 July 1 - Mar. 31

2018 2017Rupees Rupees

13 Sales - netLocal sales - gross 14,640,586,884 13,987,093,810

Less: Sales tax 2,487,818,589 2,302,284,796 Federal Excise Duty 2,080,026,376 1,502,708,700

4,567,844,965 3,804,993,496

10,072,741,919 10,182,100,314

Export sales 403,446,910 567,525,513

10,476,188,829 10,749,625,827

Less: Commission on cement sales 91,540,056 92,002,892

10,384,648,773 10,657,622,935

14 Cost of goods sold

Raw materials consumed 499,554,238 469,103,027Packing materials consumed 575,311,703 543,767,070Fuel and power 1,293,182,520 1,225,441,918Coal and gas 3,126,775,285 2,482,138,478Stores, spares and loose tools consumed 302,162,957 259,185,095Salaries, wages and other benefits 254,298,488 225,578,228Royalty and excise duty 153,547,380 149,472,855Rent, rates and taxes 24,912,763 18,060,013Repairs and maintenance 78,401,822 62,045,166Insurance 30,779,345 22,155,669Depreciation 389,070,790 359,450,596Other expenses 72,233,830 52,653,211

6,800,231,121 5,869,051,326

Work-in-process

At beginning of the period 703,875,591 405,860,370At end of the period (694,853,590) (434,382,623)

Cost of goods manufactured 6,809,253,122 5,840,529,073

15


2018 2017Rupees Rupees


Finished goods:At beginning of the period 167,423,321 124,546,558At end of the period (93,485,733) (115,570,062)

6,883,190,710 5,849,505,569

Less: Cost attributable to own cement consumption (13,357,092) (7,582,303)

6,869,833,618 5,841,923,266

15 Other operating incomeIncome from financial assets - Shariah non-compliant:Interest on bank deposits and investments 34,563,524 252,786,359Profit from SNGPL loan - 52,733Unrealized gain on held for trading investments - 31,428,567Realized gain on held for trading investments 112,214,152 14,107,185Interest on Employees’ loans 6,125 18,751

Income from financial assets - Shariah compliant:Profit on bank deposits 75,700,824 300,925Realized gain on held for trading investments 147,246 -Unrealized gain on held for trading investments 37,150,092 -Bonus units received from investment in mutual funds 682,626 -Dividend received from investment in mutual funds 30,000 -

Income from non-financial assets:Income from sale of scrap 6,615,104 504,763Profit on sale of assets 11,860 2,977,326Miscellaneous 288,966 378,524

267,410,519 302,555,133

16 Other operating chargesDonations 15,751,800 7,805,000Workers’ Profit Participation Fund 173,555,009 241,404,382Workers’ Welfare Fund 65,375,788 87,777,620

254,682,597 336,987,002

17 TaxationCurrent 17.1 992,692,580 1,352,093,929Deferred (56,540,472) 17,659,918

936,152,108 1,369,753,847

(Un-Audited) (Un-Audited)March 31, 2018 March 31, 2017

Rupees Rupees

18 Cash and cash equivalents

Cash and bank balances 567,457,710 1,227,221,444Term deposit receipts 3,950,000,000 153,000,000Market Treasury Bills - 4,526,0320,255

4,517,457,710 5,906,253,699

17.1 The Finance Act, 2017 amended Section 5A of the Income Tax Ordinance, 2001 under which every publiccompany other than a scheduled bank or modaraba, that derives profits for a tax year and does not distributeat least 40 percent if its after tax profits within six months of the end of said tax year through cash or bonusshares shall be liable to pay tax at the rate of seven and a half percent of its accounting profit before tax.

The Board of Directors of the Company intends to distribute sufficient cash dividend for the year ending 30 June2018 to comply with the above stated requirements. Accordingly, no provision for tax on undistributed reserveshas been recognized in these condensed interim financial statements for the period ended 31 March 2018.


20. Transactions and balances with related partiesThe related parties comprise of the Holding Company, associated companies, key management personnel includingdirectors of the Company and staff retirement funds. Significant transactions and balances with related parties, otherthan those disclosed elsewhere in this condensed interim financial information are as follows:

19. Reconciliation of movements of liabilities to cash flows arisig from financing activities.

Balance as at 30 June 2017 (Audited) 710,526,312 200,000,000 37,109,899 947,636,211

Changes from financing activities

Repayment of long term finances - secured (213,157,896) - - (213,157,896)Repayment of short term borrowings - (200,000,000) - (200,000,000)Dividend paid - - (306,604,344) (306,604,344)

Total changes from financing cash flows (213,157,896) (200,000,000) (306,604,344) (719,762,240)

Other changes

Dividend declared - - 309,017,380 309,017,380

Total liability related other changes - - 309,017,380 309,017,380

Closing as at 31 March 2018 (Un-audited) 497,368,416 - 39,522,935 536,891,351

Rupees

Long Term Short Term Dividend Finances borrowings Payable Total

Liabilities2018


Transaction with holding companyANS Capital (Private) Limited Dividend paid 169,972,800 424,932,000

Dividend payable - 679,891,200Transactions with associated undertakings /

companies due to common directorshipUltra Pack (Private) Limited Sale of Cement - 3,302,348Ultra Pack (Private) Limited Purchase of packing material 427,538,350 138,432,250Ultra Pack (Private) Limited Purchase of light vehicle 2,061,966 -Palace Enterprises (Private) Limited Accommodation services 390,506 313,907Art Vision (Private) Limited Sale of light vehicle 1,957,000 -Employee FundProvident Fund Trust Contribution 9,871,193 7,821,120OthersKey management personnel(Chief Executive) Remuneration and other benefits 32,905,625 28,032,082

Dividend paid 113,212 283,030Dividend payable - 452,848

Key management personnel Remuneration and other benefits 32,905,625 27,360,800(Executive Director) Dividend paid 1,958 4,895

Dividend payable - 7,832Key management personnel Remuneration and other benefits 20.1 60,403,968 40,019,518 (Other Executives of the Company) Dividend paid - 148,885

Dividend payable - 126,216Non-Executive Directors Dividend paid 653,774 1,714,435

Dividend payable - 2,615,096Kohat Cement Educational Trust Dividend paid 233,916 584,780

Dividend payable - 935,664Contribution 1,016,720 605,300


2018 2017Parties Nature of transactions Note Rupees Rupees

21. Date of authorization for issueThese condensed interim financial statements have been approved by the Board of Directors of the Company andauthorized for issue on April 21, 2018.


20.1 This amount includes Rs. 37.3 million (2017: 16.9 million) paid to certain relatives of directors.

Head Office:37-P, Gulberg II, Lahore - Pakistan.Tel. : +92 - 42 - 11 - 111 - KCCL (5225)Fax : +92 - 42 - 35754084, 35874990

Documents

Fulfilling Dreams - kohatcement.com · Pak Rupee Value, has increased cost ... and provincial infrastructure projects associated with China Pak Economic Corridor ... Final cash dividend